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The Milkman Cometh, With a Closed Loop Solution

“Consumers prioritize convenience and have turned to online ordering for everything, especially in cities, which generates tons of excess packaging and waste,” explains Alex Torrey. In fact, an average household throws out almost 4 pounds of packaging waste annually, and it is expected that the ocean will have more plastic than fish by 2050. Alex decided to launch a refill and delivery service to challenge the status quo. 

Photo Courtesy The Rounds 

He came armed with the hope of creating a more significant impact with a zero-waste business model for The Rounds, which he launched in Philadelphia in 2019. However, many pieces of his plan had earlier origins. The importance of having a mission was reinforced during his time as an analyst at the CIA, for example: “it left me with a big impression that a group of talented humans who are aligned around a common goal can be unstoppable.” The rest of the inspiration came from his lifelong experiences as a consumer. “One time I ran out of soap, so I ordered it, but it arrived in this massive box. It got me wondering why I had this huge box and a bunch of packaging in my apartment, all for a small bottle of hand soap that I’d eventually throw away.” 

He began working on the concept in early 2019 and continued while attending the Wharton School at the University of Pennsylvania. He eventually brought on his classmate and co-founder Byungwoo Ko, who had experience in operations and strategy for Uber. After the Philadelphia location was up and running, Washington, D.C. was next due to its “vibrant market, popping with modern, sustainability-minded consumers, pro-innovation, and a booming community for startups.” The company has continued to expand since, growing more than ten times to 10,000 members and raking in $4 million in a seed round led by Construct Capital and First Round Capital and $38 million in its Series A financing round led by Redpoint Ventures and Andreessen Horowitz. 

Photo Courtesy The Rounds

For each of the four locations in which it operates – Philadelphia, D.C., Miami, and Atlanta – The Rounds carries staples, many of which are sustainable or refillable. All are limited to one option per type of product, eliminating endless scrolling.

It has household items like recycled toilet paper and plant-based sponges, personal care products like compostable Q-tips and chewable toothpaste tabs, and pantry items that include KIND Bars and LaCroix. 

Plus, each of these products is sourced directly from local businesses and manufacturers to ensure high quality at lower prices: approximately 30 to 40 percent less than city retail prices and comparable to what a Costco Wholesale member might pay. Local partners include Philadelphia’s Bean2Bean Coffee, Atlanta’s Chrome Yellow, D.C.’s Bethesda Bagels, and Miami’s La Provence. 

Photo Courtesy The Rounds

Ninety-four percent of these items are delivered with zero waste: they are packaged in reusable containers, such as glass jars, and then placed in tote bags. Those that cannot be delivered in reusable containers for health and safety reasons are still at least recyclable or compostable. Cardboard boxes and single-use plastic are never involved

Photo Courtesy The Rounds

The entire process is efficient. Each neighborhood is assigned a weekly Refill Day for all deliveries needed. As Torrey explains, “instead of making one or two deliveries and having to go back to the warehouse and make another single delivery, we batch all of these deliveries, like the post office.” Those deliveries are bundled at local Neighborhood Refillment Centers, from which employees go out on electric bikes that travel along efficient routes, meaning fewer miles traveled and lower emissions. The messenger also picks up any empty packaging left out for them so that it can be sanitized and reused on the next Refill Day. 

Photo Courtesy The Rounds

The company calls this reverse or two-way logistics, “reversing the direction of conventional one-way shipping channels” and creating a closed-loop system. It is, at its core, a return to the milkman delivery system, which is why the company was originally called Mlkmn. However, in the words of Torrey,

“The Rounds made better sense because we operate on a circular economy — a kind of enclosed loop that just continues. We literally make ‘the rounds’ every week with all the stuff you need, delivering and refilling.” 

To get started, customers go through an onboarding process to select the goods they want, and for $10 each month, The Rounds Psychic Home Manager predicts when you will run out of each and includes them in the appropriate Refill Day. Even though customers can add or remove items in the bundle, change their frequency preferences, or skip or pause a refill, this system provides The Rounds with “visibility into future demand, which allows us to plan out our supply chain much further in advance,” thus benefiting local partners with earlier commitments. 

It is working toward a goal to build the world’s first fully closed loop, two-way last-mile logistics network, complete with a range of sustainable product options for customers to choose from, enhanced reporting on their sustainability efforts, and a pilot collaboration with General Motors’ e-van startup BrightDrop to nudge them ever closer to net zero carbon. As Torrey wrote in a letter recapping the business securing $42 million in funding, “the future of last-mile logistics is not about getting Flamin’ Hot Cheetos delivered in 15 minutes at 1 AM; the future is a sustainable two-way last mile.”


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