Season 4, Episode 152 : Zach Lawless

Will Richardson 0:05
Welcome to the Green Element podcast where we meet business leaders and innovators transforming their operations to be more environmentally and socially sustainable, and in the process help you on your sustainability journey. I'm your host, Will Richardson. The concepts of reuse and reduction sit at the very top of the waste hierarchy. With me today is Zack lawless, the co-founder of The Good Goods, who has implemented these concepts in an industry, you'd least expect it - the wine industry! Reducing waste isn't just about waste, but also about reducing the carbon emissions from the raw materials, the manufacturing, the transport, and the disposal of the products. The Good Goods is a pioneering company offering a solution to the biggest cause of emissions in the wine industry. Single-use glass bottles. Welcome, Zach.

Zach Lawless 0:56
Thanks. Well, appreciate the introduction. I'm excited to be here with you today.

Will Richardson 1:01
Now, I've given our listeners a brief introduction, but can you tell us in your own words, what The Good Goods are all about?

Zach Lawless 1:08
Yeah, so Good Goods, we focus on building consumer-centric reuse programs for brands and retailers. And the reason I use consumer-centric is because we focus on really the consumer aspect of that, how do we get consumers to engage and return these products. And so what we believe is that that is the first part of building significant reuse models. And because no matter how efficient your logistics, or your or or cater sensitization is, you need to be able to get the products back if you want to have a successful reuse program. So we're really focused on that first leg of creating a great consumer experience figuring out how to get other producers and retailers to join the program. And we have dived into the wine industry to create this platform for the different producers and retailers in the industry.

Will Richardson 2:04
Are you finding there's good take-up in it?

Zach Lawless 2:06
Yeah, I think that we chose the wine industry for a number of reasons. One is that it could be easily adopted by the players who are in it currently. So wine obviously is already in durable, reusable packaging. And then secondly, there's a high level of standardization within the industry. So from that perspective, producers to move on to the platform pretty easily, without major changes compared to some industries that are trying to move over to reuse. For instance, I know that Haagen-Dazs, for instance, that I don't know if you've seen that famous stainless steel container, that's double-wall that they introduced into it into the Reuse Program. But I know that that took something like two years to be able to manufacture the packaging and get through a new production line and things like that, whereas wine can move really quickly. The other part about it. And the reason I think that we have had so much success in wine is that it's uniquely affected by climate change, right? The producers really feel the impact. And it's been one of those things, it's been really kind of almost definitely moving to go to a lot of conferences, talk about what we're doing and listen to these producers talk about climate change. A lot of them are sitting there saying people are telling me that climate change isn't affecting me as much as it is my grapes are different. And my grapes aren't lying to me, right? And so and in agriculture, the rural industry is greatly affected by this. Producers are really interested in making changes. And so we know that the glass bottle itself is it by reasoning basketball itself as the biggest impact you can make into the production of wine from the finished products. Carbon Footprint standpoint.

Will Richardson 3:47
That's interesting, slightly on a tangent, but what was it that compelled you to set up the Good Goods? Because your background is really interesting. I'm curious to know how you transition from being a university degree in mechanical engineering, and business finance to set up your own business and why?

Zach Lawless 4:04
Yeah, it's kind of a long story I can take I can take you down that journey. But yeah, I have a degree in mechanical engineering, also a degree in, in business finance out of college. I moved to New York to get into the finance industry and ended up working in private equity, venture capital, investing and social impact investments and really learned the power of social impact businesses and became committed to really how can we create business solutions that affect some of our largest problems within the world. And so, in 2017, actually launched my own business, my first business which was doing Grab and Go meals out of reusable containers, all those reusable containers can be returned to any of our locations for credit towards consumers that's purchase. And the reason that we did the reusable containers. That point was really because China had stopped accepting plastics and really created a lot of attention towards this recycling crisis that we're kind of that we're still in today. And so we wanted to be a part of the problem and not a part of the solution. We came up with this idea of a zero-waste lunch option. And we gained a lot of traction pitching this to not just venture capital investors, but some of the largest foodservice operators in the country as well. We signed deals with Aramark, Compass at XO, and in launched in New York with around 30 locations. And we didn't put a ton of time into really, how do we create this consumer experience around reuse, we went with kind of the general model, "hey, it's an $8 salad, when you check out, put a $2 deposit down for that, that salad. When you come back, you'll get that two, those $2 back in three months". And we looked back to see how things were going. And we had a 20, I think, was 21% return rate. And the number one complaint we had on the customer surveys was that the customers had to return the packaging. So we realized that we were failing in our mission to actually create a sustainable lunch option or one that did make economic sense. And so what we realized is that we were competing with disposability as a product feature for all of our meals. And we had to figure out a way to leverage reusability, or reuse as a product feature, to compete with disposability. And so we went back at our locations and started doing A/B testing of different types of consumer experience. And little things that we did just instead of hey, having that be an $8 salad with a two-dollar deposit tying it up to be a $10 salad. Now you're the $2 reward when you bring it back. And then using the different touchpoints in the consumer experience now that they're coming back to your machine, now that they're interacting with you through a unique identifier, which in this case was their cell phone number, we were sending them messages of positive reinforcement, but also messages of normalizations. Let him know that other people were doing it, hey, 10 to 10,000 other people returned that this month. And so between those different changes in the A/B testing that we did, we actually by the end of it, we hit an 80% return rate of our packaging, that's across subway centers, office building lobbies, college libraries. And so across kind of all the spectrum of people eating on the go, leaving the different locations and then coming back to him to return it, we were getting this extremely high return rate, and more importantly, on our surveys, and going from being the number one complaint about actually returning the bowls, the number two feature of our products that they enjoyed was the fact that they could return the bowls and be a part of the part of kind of the movement. So we really flipped the script. And we did it to test and what we thought we'd actually hit on was this idea of creating a better consumer experience for reuse. So as COVID hit, we have a lot of our locations that were based on foot traffic in New York City stops, stops getting that that same mobile foot traffic, and we have a chance to step back and say we've learned a lot in this. But what we can only have so much effect being Grab and Go salads, out of our own retail locations. How do we create this into a platform to have the type of impact that everybody on the team was really striving for? So we did a lot of research on what industries make the most sense. And what we've really landed on, is it if reuse are reasonable commerce is going to have a meaningful and significant impact in the near term, I fully heartedly believe that wine needs to be the product in the industry to bring it to the forefront. And that's because there's true business cases for it. And there's there's the ability to easily adopt. I think we chat chatted about this just a second ago. But the formats are already durable and reusable. There is a high degree of standardization. With just six formats, you could move 75% of the volume in the United States by SKU without changing anything about the supply chain, or the bottling line itself. So there's there's the opportunity to move quickly. And then the second part is that wine is sold at 1 million locations within the United States. And if you were to activate that we would have the largest return network in the world. So if you could figure out a way to leverage interest in sustainability from these producers, which we're showing these producers are interested in willing to willing to move along to actually get retailers to participate. You have the ability to create a network that has not just meaningful density is mostly out locations like grocery stores and things like that where you can expand it into other categories. So wine really is an opportunity to create a network on a private level that could expand and open the doors for any others who have a product that wants to get into the reused space. And so that's how we launch it. We started off at 10 pilots just to see if we could recreate the same data that we did in Grab And Go, the results were incredible. We did 10 pilots over a three-month period at different wine shops throughout New York, we had an 88% return rate of our packaging. And we had 4000 users within those three months, collected 20,000 bottles, and most importantly, which was a really interesting part is we forecasted the projected sales with those retailers for those products. And we outperformed the projected sales by 71%. So we showed that it was actually a product feature that could drive sales and differentiate the product in store. And yeah, and that is how I could told you it was a long journey. But but that's how we ended up where we are now. And we're really pushing pushing forward and excited to see interest in this industry specifically.

Will Richardson 10:51
And you alluded to the carbon footprint of the bottle being one of the highest parts of the wine, could you go into more detail with that?

Zach Lawless 11:01
Yeah, so anywhere between 30 and 50% of a finished wine bottle on the shelf. The carbon footprint comes from the wine bottle itself.

Will Richardson 11:11
Wow, that's one hell of a statistic.

Zach Lawless 11:13
Right? Yeah, it's pretty crazy. I mean, people always forget that you have to keep a glass up to over 2000 degrees Celsius ordered melted, right. So whether you're recycling that bottle, or whether you're building a virgin bottle, the majority of that part of the carbon footprint is from actually heating it up. So recycling really doesn't make much of an impact and glass, which is a very interesting thing that people tend to forget. And also, you're talking about an agricultural product, that a lot of times has a very low footprint. So really, truly, the bottle itself is the main contributor to the footprint of wine, transportation itself is 13%. So the bottle is about twice that. And reuse offers an opportunity to really reduce the footprint of the bottle by about 65 to 75%. So if a producer is really truly interested in reducing their footprint, the number one thing they can do is actually reuse bottles. To to that number.

Will Richardson 12:21
And since we're looking at the carbon footprint of it, then, are you taking into consideration bringing the bottle back to the store or location point, and then that's upward transportation back to the producer. And then I'm assuming the cleaning of it. And then the downward transportation as well. What what does that carbon footprint look like compared to the original one?

Zach Lawless 12:54
Yeah, so I apologize, it probably should have at the beginning, when I introduce the business just talked about kind of how the program works so people can understand. I give you the high level that we do activations for retailers and producers. But how it really works is that the front end of is supply chain stays pretty much the same, and that producer will fill in a reusable bottle, they will then sell to the distributor, there's through distributor will sell to a retailer, the retailer will sell to a customer, everything at this point is the same. Now that customers will bring back that bottle, they will scan it in through a QR code that's on the bottle to get credit that is attached to their number, the thing that's important is that credit can be used towards anything in the store. So it entices the retail owners to work with us. And then that the retailer will set up a threshold of the amount of bottles that they are willing to hold before it gets picked up. We know exactly how many bottles are there because they get scanned in. So once they hit that threshold, a pickup, it's set up, those balls get picked up and taken back to a facility to hold inventory until they reach the right thresholds. And then they hit then they go get sanitized, washed and resold to producers. And so how does that affect the carbon footprint? Like I said, the majority of that carbon footprint is from the production of the bottle itself washing compared to creating a virgin bottle is a 95% less carbon-intensive process. Then then you talk about how do I move those bottles around, right? And so for the majority of that, you're either picking up bottles and moving to the landfill, you're picking up bottles and moving them over to a warehouse. And then it basically comes on how dense a network of producers and users of those balls can you get before going across the country. But we do know from our carbon analysis is that I could actually pick up that bottle, get shipped from California over to New York. We could ship it to a washing facility back in California and ship back over to a producer in New York. I'd still use less carbon than we cost to make that model.

Will Richardson 15:05
That's brilliant. Wow. It just yeah, it just highlights the, I mean, forget about the business model the, the, you know, the environmental model of it, and what you're doing.

Zach Lawless 15:16
Yeah, you alluded to the beginning, but reuse is really the holy grail for sustainability. And, and we tend, we're least in the US we're bogged down by decades of legislation trying to promote incentives, trying to promote recycling, and recycling after 50 years, it's still really failing us a lot of different aspects, and it hasn't really been thought about in the material aspect of what makes sense for what type of products. And so yeah, the, our goal is to help push reuse and make it a more common and engaging product feature.

Will Richardson 15:56
And you're quite heavily reliant on tech within this process, aren't you?

Zach Lawless 16:03
Yeah, we really do. I mean, it's kind of cliche at this point. It's like everybody is a tech company. But we, we really are taking technical approach. We're trying to try to modernize the milkman, right? These systems, everything had been in place before, we're not recreating the wheel and trying to recreate reuse, but we are trying to bring it into the 21st century, there's a lot of things that we can do using tech to make that a better experience. For instance, you are returning that that bottle that you just purchased, and you're you scan into your phone, you get their credit stored on you, we're going to text you and let you know that you have those credits, we're also gonna allow you to opt in to learn more about the products that you have. And one of the interesting things is about 65% of consumers engaged to opt-in to learn more about the products that they're purchasing, right. And then most of the time, we're letting them know about what kind of sustainable practices the vineyard using, why this whole program should be meaningful to them. We can take through a consumer journey that has been really reserved to direct to consumer customers, but we can bring that into the retail experience through what we're doing. And I think that makes it enticing to producers, but it also makes it enticing to kind of the modern consumer who's really interested in learning about the products, then they realize they're not just buying what's inside that packaging, they're actually buying kind of the ethos of that brand as well, too. And so we're able to do that, we're able to get feedback from the customers so that we can help provide brands with feedback on the products and even potentially help provide customers with purchasing decisions. So the like everything in the modern economy, data is a big play of what we're doing. And same with just the tech in general in order to make sure that those things run smoothly and the consumer experiences is great as can be.

Will Richardson 17:55
What I absolutely love about your business is how simple it is, and how successful it is. Probably partly driven by the simplicity of it, you haven't come in and completely changed an industry, you've actually come in and then pretty much enhanced that industry and just made it more sustainable. Very simply. And that simplicity is probably what is driving that change.

Zach Lawless 18:24
Yeah, it's funny. I mean, one of the simplicity, I think is based around our ethos of consumer experience, right, the more complex anything gets, the more difficult is for people to participate. So we really do, it is a complex problem of sustainability, right. And it is a complex business that we're trying to get into. But in the consumer world, and to everybody else who's participating, it needs to feel as simple as possible. And I think that in general, that's kind of one of the biggest problems that the environmental movement faces is that it is such a big and overwhelming problem. But one of the things I think people love about what we're doing is that you don't really need to know the intricacies of carbon or climate change, you don't really need to know how to live a zero waste lifestyle to participate with us. We kind of give you that that entryway to be a part of the movement to do something that is small and easy at first get rewarded for doing it. And maybe what we hope is that that that serves to lead to other major changes. We saw that with, especially our machines that we put into office spaces sometimes are we heard one of our clients come back to us and say it's the water cooler for sustainability because some of the people in office really know or care about sustainability that much. But when they were talking to people about the lunch they just had they wouldn't say like "I had this great salad". They were like, "oh, I had this like really cool salad in this jar that I got to return". And all of a sudden this person who didn't have a chance to or would never have been in that sustainability conversation before. Now they had a voice. They've done something small, but it's giving it's like giving them a part to play,

Will Richardson 20:00
And you've talked about going into other industries. Have you started looking at other industries? Or is that still in the kind of planning stage?

Zach Lawless 20:11
You know, we actually have reached out to a lot by people in other industries. I mean, we've had a lot of fun conversations, but, at the moment, we're solely focused on wine. Like I said, it's the first part that we there's the first ball that we think we need to get rolling. And, and yeah, so it's just wine at the moment. We have big visions, but we're making sure that we stay focused in the moment.

Will Richardson 20:38
And, um, you talked about the fact that it's, it's actually a different bottle is that because the label is etched into the glass, so it's, it's already made for that particular bottle, because I guess I was originally thinking that it was a glass bottle with the paper label, and then it would just be washed, everything would come off, and then you put the paper label back on again. But I'm thinking that that's not the case.

Zach Lawless 21:04
But that is the case. So the major change of being able to make a bottle actually reusable, is making an adhesive so that the label will come off, right? That's the hardest part of the standardization process.

Will Richardson 21:17
Oh, wow. Okay, yeah.

Zach Lawless 21:18
And so really what the first step we do for producers to join our platform isn't even to get them into a standardized bottle, it is really to work with them, say like, Hey, let's create a program that works for you. The first thing that you need to promise us to do is to start using the right adhesives and including our QR code. So that's step one for getting the process, then they have to agree to either let their bottles be resold to other producers or to agree to repurchase their bottles. So we'll actually work with the standard of their existing bottles, making sure that they're using the right adhesives and the right QR codes. And then we have our own standardized bottles that we move people to based on a kind of what they're using ahead of time. So it's we allow them to come into the program pretty easily. Just like I said, the main issue is making sure that people use the right pieces.

Will Richardson 22:07
This is gonna sound like a really dumb question. Does it matter what color glass you use?

Zach Lawless 22:12
No, it doesn't matter what color bass you use it so we can we can clean things.

Will Richardson 22:20
Okay, I didn't know if that was on, you know how black plastic is actually really hard to recycle because machines don't, they can't see the plastic. And I wondered if there was, I don't know, something in that within the cleaning.

Zach Lawless 22:35
So you can push the problem into different areas, right. So like glass, black, black, plastic is hard to recycle, because you're trying to make other colors out of it. And the same thing with if I was to get a bright yellow bottle that somebody wanted to put into the program, we need to find a secondary source for it. And if it's something that is so different from the market or so unique to that producer, then then it might be possible for us to find a secondary market. Yeah.

Will Richardson 23:09
Because you're moving things around. It's been fascinating talking to you. What are your future plans for the Good Goods?

Zach Lawless 23:16
So we are really just now starting to expand, we've got about 13 wines on the platform right now we're hoping to be closer to 20 by the end of the year. We're at about 30 retailers in the New York metro area right now we're going to be at 100 by the end of the year and 600. By the end of next year. We have some big producers in the pipeline that are they're jumping on board. And we're expanding outside of New York by the end of the year into California. So we're going to take a coast to coast inward approach to expansion. And, and yeah, so our goal is to help get as many people on board in reusable bottles as possible. So if anyone is interested in enjoying the program, make sure you go to our website. The Contact Us forms will ask you to fill out a form based on if you're a producer, retailer, distributor. Any one of those can get involved in any way. So yeah, if anybody's interested, just reach out on that form, and we'll get them set up with the program.

Will Richardson 24:21
Brilliant, Zach, it's been an absolute pleasure having you on the show, and I just love your business. It's brilliant. Absolutely brilliant.

Zach Lawless 24:30
Thank you. I appreciate it. It's been fun to be on the show. I appreciate you having me on and letting me chat about it.

Will Richardson 24:39
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