Algramo Makes Zero Waste Shopping Affordable and Convenient

If you've ever been to South America, you may have noticed that many people shop for food and cleaning products at little corner stores and sidewalk kiosks. Not only is it convenient, but for many people with limited incomes, small quantities are more affordable in the moment. 

There are some downsides to this model. One is waste. Enormous quantities of trash are generated when people buy multiple mini bags or sachets of a product instead of a single larger container. The other is cost. People pay up to 40% more for small quantities that would be much cheaper if they had the cash flow to purchase in bulk. This is known as the "poverty tax" and it's a fee that goes to companies to cover the costs of additional packaging.

One Chilean company called Algramo has an interesting solution to both of these problems. Founded eight years ago by José Manuel Moller, it makes zero waste shopping accessible to people in middle- and lower-income neighborhoods by using contactless vending machines to refill containers with cleaning products. Because the containers are reused, the product costs substantially less than if a new one were purchased. People also choose the quantities of product they wish to buy, hence the name, which means "by the gram" in English.

The first locations in Santiago's local bodegas were a huge success, with an 80% bottle reuse rate. Unilever noticed, and partnered with Algramo to develop a mobile refill system that could be carried around the city by electric tricycle and sell liquid laundry detergent in addition to powdered. These tricycles set up shop at predetermined locations around the city and did home deliveries of refills. 

Algramo also caught the attention of Closed Loop Ventures, a circular economy investor fund that wanted to bring the concept to the United States. That's how Algramo launched in New York City in August 2020, with an initial test pilot of three zero-waste dispensers, two in Brooklyn and one at Essex Market in Manhattan. Robert Gaafar was recruited to head up the North American expansion and he spoke to Treehugger about why Algramo has been so successful.

"The service is easy to use. Each package has a smart tag, a built-in RFID that's linked to the user. It takes a run-of-the-mill bottle and turns it into a smart bottle. It knows the number of times the bottle's been reused, it lets you pay by the ounce, and you can see the balance on your account."

So far the New York machines dispense only popular cleaning products – Clorox, Pine-Sol, and Softsoap. When asked how COVID-19 had affected Algramo's launch, Gaafar said that cleaning and disinfecting matters more than ever now, so the company "played into that." There was a lot about the model that appealed to people under the circumstances – namely, being able to use a contactless machine and the same bottle without venturing into a store. 

When asked if Algramo intended to include food in its dispensers, Gaafar said it's a possibility and that the company is in talks with several food companies. Food poses more challenges than cleaning products, however, with rules around expiry dates. Most recently, it partnered with Nestlé to sell Purina dog food in Santiago, but that is not yet available in the U.S. locations.

Trying to get people to reuse bottles is a significant behavioral change, Gaafar said, which is why starting with these cleaning products makes sense. "We feel that if we could start initially with home care and cleaning products, [selling] brands that people know and trust, we could start to get them used to bringing their bottles back."

The cost savings make it even more attractive as soon as people realize how much they're saving. Gaafar gives the example of a bottle of bleach that can be refilled for $2, while a new bottle goes for $5 at a laundromat across the street. Going with the refill option is a no-brainer. Hundreds of New York customers have been surveyed and Gaafar said that "feedback has been phenomenal. People like the savings component and are excited about the opportunity to have this within their building. They obviously want a broader array of products."

If the New York trial continues to go well, then Algramo has big plans for expansion. Its model could work well within urban environments, especially in residential buildings, in partnerships with retailers, on college campuses, and at transportation hubs.

It's smart to give people control over the quantities they want, at a price point that rewards them for reusing containers. This is the kind of model that will encourage zero-waste behaviors that, when scaled up across a population, can make a real dent in the amount of plastic trash being generated. Zero-waste solutions have to be convenient and affordable if people are going to use them, and Algramo proves that both criteria can be met without compromising the shopping experience.

To find precise locations of vending machines, you can download the Algramo app on your phone (necessary for loading credit onto your account and purchasing refills).