Why Revolution is Investing in TemperPack
Over the years, many of Revolution’s investments such as Zipcar, Sweetgreen, and Optoro have experienced explosive growth brought about by their ability to develop sustainable alternatives to problems consumers and businesses were facing in sectors like transportation, food, and e-commerce. Since we made those investments, consumers have become even more aware of their environmental impact and are embracing more sustainable lifestyles. And corporations are responding to these escalating consumer demands by making their businesses more environmentally friendly and sustainable.
I have watched these trends unfold across multiple sectors and when we first met the founders at TemperPack, and learned how they were addressing the massive issue of sustainable packaging we knew we needed to learn more. TemperPack engineers, manufactures, and distributes sustainable packaging products that replace single-use plastics, such as Styrofoam®, with proprietary bio-based materials. The company’s products are designed to help their customers eliminate the use of polystyrene and polyurethane in packaging, which accounts for the largest percentage of plastic use worldwide (44.8%).
We’ve all seen the alarming images of plastics littering our oceans and landfills, but we’re encouraged by what companies like TemperPack are doing to address the problem. Here are five reasons we think TemperPack will be a global change maker:
1) Styrofoam is used everywhere, but it’s outdated and terrible for the environment.
Styrofoam® is a 70-year old technology used for cooling and insulating that can be found practically everywhere. It is cheap and effective, but it is predominately one-time use and cannot be recycled (except in large sorted truckloads at special manufacturing facilities, definitely not at your curbside). Ninety-one percent of all plastic is never recycled, and most of that ends up in the ocean — that figure is probably worse for Styrofoam®.
2) TemperPack is a best in class alternative to harmful plastics.
TemperPack is using advanced material science to develop patented products that are powerful insulators, produced at scale, and at affordable premiums to plastics like Styrofoam®. Consumer trends show a growing awareness of sustainable packaging as a priority; in fact a recent survey showed that 77% of consumers said the packaging a company uses for its online shipments should reflect its environmental values. This demand has been reflected in TemperPack’s strong growth over the last few years as brands are rapidly trying to quell the environmental discomfort their customers experience when receiving Styrofoam® packed meal kits, e-Commerce food, or pharmacy shipments.
3) Emerging proof points of a land and expand strategy.
The company started out with strong growth in its initial markets, which were also startups and able to nimbly innovate alongside TemperPack to develop initial prototypes. Since expanding rapidly and becoming a dominant player in this e-commerce driven category, the company has proven its ability to expand into other larger, and perhaps more lucrative, markets like pharmaceutical cold chain.
4) The shopping/brand experience used to happen in store, but now it lives in our phones and on our doorsteps.
As e-commerce continues to grow, packaging is the new brand vehicle … and because the values that plastic represents are bad for brands, decision makers leading consumer-facing cold chain companies are desperate for alternatives. Mainstream consumer brands are adopting sustainability as a core operating principle too, including leaders such as Unilever, Patagonia, Nestle, Walmart, Ikea, and Coca-Cola. Our belief is that scrutiny on packaging and environmental principles is set only to grow from here, which will provide a nice tailwind to TemperPack’s continued growth.
5) The company’s growth is supported by consumers & governments rising up against plastic.
Government regulation against the use of one-time plastics is increasing at a state and a national level (i.e., bags, straws, etc.). Within the next year, more than 60 countries will have issued actions to discourage the use of plastics, which experts believe will have at least some measurable effect on consumer behavior.
We couldn’t be more excited to add TemperPack to the Revolution family of portfolio companies, and are eager to watch them change the world from their HQ in Richmond, Virginia!
