You walk into a cafe, buy a coffee and sandwich. When departing, you drop all the leftovers on the tray, including the cup, lid, food wrap and tableware, into the smart precycle bin placed in the corner of the cafe.
A few seconds later, you receive a message on your phone informing that you have won reward points (that can be redeemed as tokens or used to buy further purchases).
A startup is making this a reality. Based in Taiwan and founded by three entrepreneurs from New Zealand, Brazil and the UK, Blue Ocean has introduced an innovative platform with a mission to make waste recoverable on a global scale.
“Blue Ocean is a platform business with a mission to make waste recoverable on a global scale. To achieve this, we are deploying a radical business model that provides an incentive mechanism that unites and aligns everyone in the packaging value chain — raw material producers, manufacturers, innovators, investors, retailers, consumers, logistic services and recovery groups — towards a common goal of eliminating waste,” Co-founder Brian Direen tells me.
The startup was established in October 2017 by Direen (CEO), Alex Dodkin (CTO) and Fernando Fernandes (CMO) — who have worked together on a number of international projects over the last few years and bring wide-ranging complimentary skills to the table: design, branding, marketing, digital infrastructure, app development, database management, partnership development, etc.
Blue Ocean leverages identity verification systems, algorithms, IoT, smart sensors, and blockchain to develop this innovative system. Its connected precycle smart bins utilise a range of auto ID tech, geo-location sensors, weight and fill sensors. These bins can identify who, when, what and how participants within the ecosystem are using the bins, which in turn allows the business for near-instant cash-pack payments/rewards and efficient collection of the precycled materials. The technology also allows for packaging recovery, supplychain visibility and impact reporting.
“If you are already a Blue Ocean user, the bins can identify you and you will be immediately rewarded with points points that can be redeemed as tokens or used to buy further purchases. If you are not a customer, then a URL will open on your mobile giving you a unique ID. The beauty of our token ecosystem is that it is not restricted to a brand, country or even specific behaviour. It is adaptable to any desired circular behaviour, in any market, at any cash-back rate, to any consumer,” Direen explains.
Blue Ocean’s tokenised ecosystem touches all participants in the value chain: businesses, consumers and communities. Its early focus is towards food service — coffee chains and restaurants have a big problem with plastic lined cups (around 600 billion disposable cups are consumed yearly with just one per cent recycled) and food wraps that are difficult to recycle.
Blue Ocean’s baseline recovery system is made up of four parts to provide end-of-life reuse for customer packaging and food waste
I- Single precycle bins: smart bins that take compostable plant packaging, paper and food/coffee waste that automatically connect to collection services when full,
II- Collection services: contracted logistic companies that use custom algorithms to deliver the material to compost facilitates,
III- Compost facilities: these can be efficient in-vessel compost machines situated close to material supplies, i.e., in the cities, or more traditional rural based facilities. The in-vessel machines work continuously with zero odour and run off with material coming out as organic compost in 10 to 12 days,
IV- Farmers: who purchase the compost to nourish new crops of food for the retail chains. Closing the circular loop.
“As we move into home waste, we can add all sorts of things: nappies, toilet paper, cardboard,” he adds. “This is just our highly practicable baseline that just requires one bin with no sorting or washing of packaging. But of course, we can incentivise other behaviours like bringing your own reusable coffee cup to store or placing plastic bottles or cans in a second bin.”
While the startup is currently based in Tainan city in Taiwan, it operates as a virtual team with people based in Hong Kong, New Zealand and India. Its first pilot project will kick off in Taiwan later this year, while other projects are planned for India and New Zealand early next year.
Over the next two years, the business plans to operate in 20 countries — China, South Korea, Japan, Indonesia, Vietnam, the Philippines, Malaysia, India, Singapore, Thailand, Australia, New Zealand, Canada, the US, Brazil, the UK, Germany, France, Italy, and Saudi Arabia.
The company banks on multiple business models. Explains Direen: “We allocate tokens to key participants to motivate and incentivise them to join the ecosystem. They are country partners (responsible for developing retail partner alliances), packaging/food recovery operators, and industry innovators (from companies who develop smart sensors to new technology for producing compostable materials).”
Participants build token value as the network grows and also receive a share of cash-back payments from retailers. For example, a coffee chain agrees to pay five cents per cup as a cash-back for each cup that is placed in a precycle bin. Of this five cents, four might go to the coffee drinker (user), half cent each to the recovery operation (this could easily double the average return to a compost facility) and the country partner.
“We will also work with retail partners to predetermine cash-back rates (paid in the form of tokens). This rate could be a dollar amount or percentage of each customer purchase ie US$0.5 cent per cup or maybe one per cent of each coffee meal purchased. We then use blockchain to make the automatic cash-backs to users to drive circular behaviour and network growth.The more valuable everyone makes the network the more valuable their tokens,” he maintains.
Opportunities are massive, Direen says, however the business is facing several major challenges. “Finding strong financial backers is always a challenge. Other than that, it is people — smart, motivated, likeable people who are passionate about the change we can bring. The easiest way to overcome these challenges is to show we have product/market fit. To this end, our team is putting together the last pieces of our first pilot project.”
Bootstrapped so far, Blue Ocean is now on a fundraising mode — it has launched a campaign on NZ Investment Network to raise money to accelerate growth ambitions.
Direen reveals that there is a similar cup-recovery system operating in Australia. Called SimplyCups, this firm charges retailers one cent per cup to cover pickup and composting costs. However, it provides no incentives for people to use the system.
“In India, too, there are a number of startups picking up food waste from food service. For example, Citizengage. However, they have no incentive mechanism and the capacity to arrange supply of compostable cups, straws, food wraps, milk bottles, carry bags, etc,” he adds.