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The Clorox Company
The Need: Now more than ever, consumers expect brands to reflect their values, solve problems and make progress against issues and causes that matter to them. Consumers are becoming more aware that plastic is a major driver of climate change and ocean plastic but where do you start to make a difference? A recent study shows that the second biggest barrier to living sustainably is knowing where to start, surpassed only by a cost, which is the top barrier.
So, for Clorox Cleaning brands, we set out to determine how we can solve two problems at once; making sustainability easy and affordable. Our key problem to solve is how to start minimizing plastic waste, while still providing flagship Clorox products that are affordable, accessible and convenient.
The Solution: Providing superior, meaningful and affordable cleaning products for the over 94M low-income consumers has always been a priority for Clorox, especially among Hispanic consumers. We married our focus on the low-income consumer with our passion for sustainability to launched several of cleaning products with Algramo/Closed Loop Partners, a Chile based startup eliminating product packaging waste through its refill machines. Algramo’s refill system allows customers to purchase cleaning products at an affordable price — making the sustainable option more affordable, equitable and convenient. Consumers not only do not have to pay for the packaging, but they can choose how much product they need, when they need it, based on what they can afford. Clorox set up three Algramo Refill Vending Machines in a variety of high traffic locations in NY; in an Office Building, Laundromat and popular market. The convenient locations and value priced name brand products drew consumers in to try a new refill behavior, reduce plastic waste, and save money at the same time. Consumers simply purchase a Pine Sol or Clorox Cleaning Bleach product from Algramo machine, return the smart, RFID enabled package back to Algramo dispenser, and finally choose how much to refill and be charged automatically in App account.
What makes it particularly smart or circular? The Clorox Algramo pilot leverages technology to make a circular process seamless without expensive and drastic brick and mortar retail reinvention. The refill station can be placed in a variety of high traffic locations to meet the shoppers where they are. Smart technology enables consumers to refill on demand easily, and for Clorox to track performance and success against objectives
- Product Traceability: Cloud base traceability from refill to end user
- RFID- NFC Chip: Low-cost resistant chips below package label
- Cashless Payments: Payments deduct from App
- Refillable: Packaging enabled with RFID tech to track quantity
- Reusable: Existing plastic packaging reused, and can eventually be recycled
Results, Benefits, and Outcomes to Date: The Clorox Algramo pilot launched mid-pandemic in August 2020- November 2021. However, despite lower traffic, there was encouraging results. Reuse rate and plastic reduction results demonstrated the system can make progress in reducing plastic. In addition, a survey showed that over half of people rating savings as the most attractive part of the system, followed by convenience and sustainability. Overall, the Algramo pilot is an excellent format to test and optimize refill modeling prior to a costly and complicated retail category conversion.
Re-use Rate: 36%:
- Pine Sol: 42% package re-use rate and 19% plastic reduction
- Clorox: 30% plastic re-use rate and 1% plastic reduction
Consumer Value: Survey showed that 63% of people rated savings as the most attractive part of the system followed by convenience and sustainability
The Clorox Algramo pilot yielded several additional key learnings:
- Value offerings of leading brands attract consumers
- Sales and refill rates blunted by COVID foot traffic; higher traffic rates needed for sales productivity
- Refilling current plastic product yields impressive plastic savings, up to 20%
- Consumers refilled on their own pace but saw an average refill rate 25-30 days
- Payment options to include cash and credit card expands appeal
Which of the Pact’s 4 Targets does your work help achieve? Target 2
How are you communicating your success? The Clorox Company is continuing to test and learn in the circular economy space and refill models. As such, we engage with our internal business model innovation teams. The pilot is still active, so our communication is mostly with internal stakeholders, retail partners and a few select public Press Releases.
What’s Next? The Clorox Algramo pilot will continue to gather data and learnings through November 2021. We plan to optimize and expand the pilot to new locations and retailers.
We are also relocating one of the machines to a retailer environment in a Target lab store in November 2021.
Clorox will continue to iterate on the value proposition and refill experience to attract consumers and retail partners.
Roadblocks & Lessons Learned: A key challenge is sales productivity. Foot Traffic and trial/repeat rates are both critical to growth and expansion. Launching during the pandemic greatly limited reach and trial.
Using category management thinking, maximizing productivity per square foot of space optimizing assortment, and testing in brick-and-mortar retail environments are our next challenges to tackle.
Core Team, Partners, & Participants: Clorox has many passionate sustainability champions, but critical to this pilot’s success was the leadership by diverse employees in the Clorox Cleaning Transformational Growth team that are passionate about reaching multicultural audiences with affordable, sustainable options.
Time Frame: From idea to the first machine online it took 9 months
Budget: About USD $1,200 monthly for machine leasing fees
Quote: “Clorox is in 9 out of 10 households and is committed helping people thrive in a more sustainable world. We are always looking for new and innovative ways to offer our products in affordable, convenient ways that are also good for the environment. That’s why we are excited about our test and learn with Algramo, offering cleaning products that are not only more affordable, but are part of an innovated refill system that reduces plastic waste. We are excited to be part of this pilot and accelerate the future of retail.” – Dennys Peña Calderón, R&D Department Manager, The Clorox Company
Company/Organization Information: The Clorox Company (NYSE: CLX) is a leading multinational manufacturer and marketer of consumer and professional products with about 9,000 employees worldwide and scal year 2021 sales of $7.3 billion. Clorox markets some of the most trusted and recognized consumer brand names, including its namesake bleach and cleaning products; Pine-Sol® cleaners; Liquid-Plumr® clog removers; Poett® home care products; Fresh Step® cat litter; Glad® bags and wraps; Kingsford® grilling products; Hidden Valley® dressings and sauces; Brita® water filtration products; Burt’s Bees® natural personal care products; and RenewLife®, Rainbow Light®, Natural Vitality CALM™, and NeoCell® vitamins, minerals and supplements. The company also markets industry-leading products and technologies for professional customers, including those sold under the CloroxPro™ and Clorox Healthcare® brand names. More than 80% of the company’s sales are generated from brands that hold the No. 1 or No. 2 market share positions in their categories.