Tom Szaky was a freshman at Princeton when he and some friends stumbled upon a killer fertilizer: worm poop. “We were trying to grow better pot and it turned out worm poop did the trick” Tom told me matter-of-factly at the start of our conversation. At the time they were just trying to improve their homegrown plants, but Tom knew this find had broader implications. And furthermore, he was inspired that their fertilizer was made from garbage. Rather than stick it out in college a full four years, Tom waved goodbye to campus life and said hello to the life of an eco-entrepreneur. His goal is to run the world’s most environmentally friendly company, TerraCycle. “I was not a huge environmentalist, I just wanted to use waste as an economic driver,” Tom said. In bringing this first product to market, they didn’t have the capital to invest in new packaging. Nor did he want to waste raw materials. So they reused 1 liter soda bottles to package the stuff, collecting them locally.

TerraCycle soon branched out into a myriad of waste based products: bags made from old Capri Sun pouches and old plastic bags, cleaners, lawn and garden products – packaged in reused bottles of course, office products such as juice pouch pencil cases and homework folders, eco-binders and so on. Each product is unique and requires a distinctive plan in order to collect the targeted typically unrecyclable trash. Tom uses an innovative brigade model to collect materials typically. One of Tom’s favorite projects involved a front cover ad in Newsweek in which TerraCycle requested people’s plastic bags. Quite niftily, the ad itself turned into an envelope into which people could place their plastic bags and mail them in. Tom received over 40,000 plastic bags from that one ad, which were used to make reusable bags. “It’s a win-win and a really fun product too.”

Every piece of news coverage for TerraCycle will not fail to mention the abundance of high profile partnerships Tom has created. TerraCycle goods can be found at major retailers such as Office Max, Whole Foods, Target, Home Depot, and Wal-Mart. It’s not surprisingly then that Tom’s favorite part of his job is creating just such big partnerships. “ I was grocery shopping this weekend and picked up a box of Capri Suns and saw that my logo was on the side of the package. That just gets me.”

The biggest surprise for Tom has been the realization of what you can do with waste. “Fundamentally there is almost no waste that cannot be upcycled and no product that cannot be made from upcycling. We can create a solution.” For those new to the term upcycle, Wikipedia defines it as “a component of sustainability in which the use of waste materials to provide new products. It is generally a reinvestment in the environment. This process allows for the reduction of waste and use of virgin materials.” Upcycling differs from recycling. Recycling often uses more energy than making something from virgin materials, Tom points out. This is never the case when upcycling.

While I love the idea of a product made from waste, I can’t help but wonder about hygiene and other related issues. I asked Tom if consumers or retailers had had any negative reactions and apparently not – “People are really into green products right now so they are much more receptive.”

Throughout our conversation and my pre-interview research, one issue was on my mind: greenwashing. I see Kraft partnering with TerraCycle (see press release) to invest in upcycling the loads of plastic packaging created when you make individual 6.75 ounce drink pouches as a way to allay Kraft’s guilt. I would hope that the partnership was a step in the direction of creating better packaging that can be more easily reused. Tom replied that they will collect 50 million juice pouches this year and while that is not enough, they can take it all. “We don’t see the issue of not being able to use the waste.” While he agreed that they should use more reusable stuff, Tom pointed out insightfully that “People aren’t great at recycling…It’s better to have lighter packaging get tossed away that is not recyclable. At the end of the day the argument is there environmentally to package juice in a pouch as it is lighter.” To Tom, greenwashing is when a company claims they have a 96% natural product when it’s just 96% water. Or when a company brags about using recyclable packaging, when it all is. Or when BP runs an ad which features “kids swimming near oil rigs with dolphins.” “But this Kraft thing is a serious step. If that is perceived as greenwashing then everything is. What these companies are doing should be encouraged.”

Before closing the conversation, I am always one to ask about profitability. TerraCycle is backed by a venture fund with most money invested in growth. Tom unfortunately could not speak to profits (other than “It is definitely profitable”), but he could share with me his sales, which have been growing exponentially. In 2004, TerraCycle had revenues of $70,000, up to $0.5M in 2005, $1.5M in 2006, $3.3M in 2007 and projected sales of $7.5M in 2008. That’s some garbage! As for the future, Tom imagines TerraCycle will double in size every year, something he thinks will be manageable. What’s next product wise? Look out for TerraCycle’s upcoming launch of a line of gift wrap and trimmings made entirely of waste.

[This piece also posted to the Just Means All Things Reconsidered blog today]