Sorting the Future: A Conversation with TOMRA CEO Tove Andersen

Tove Andersen has led TOMRA since 2021, joining the Norwegian resource optimization company after more than two decades at Yara International. TOMRA, founded on the idea of the deposit return system, has grown over the last fifty years into a three-division business across Collection, Recycling, and Food. In our conversation, Andersen reflects on that journey, the culture behind it, and what it takes to lead all three. She speaks candidly about leadership, innovation, and TOMRA’s road ahead.

Background and leadership

Before joining TOMRA in 2021, you spent 24 years at Yara International. How did those years shape you?

I had a very valuable experience at Yara, where I had the opportunity to work in every function of the company, from finance, M&A, and strategy to running a region, supply chain, IT, procurement, and production. It gave me a good understanding of all the different functions of a company.

I also had the opportunity to work internationally for almost the entire time I was there, so I learned how to operate in that environment. It gave me experience managing a cyclical industry, with a strong focus on driving improvements, driving change, capital allocation, and resource allocation.

It showed me that a purpose-driven organization can drive culture and employee passion. Yara also had a very good mission. It was about feeding the world in a sustainable way. So Yara gave me a broad background, both in functional expertise and international experience, which has been great to bring to TOMRA.

How would you describe yourself as a leader?

I think my leadership strength is a combination of being strategic, having a good operational understanding, and being people-focused. I believe in setting clear direction and clear targets. That's extremely important. You need to empower a strong team to deliver. So I lead by setting what we should achieve, and then empowering people on how to achieve it, combined with strong performance management and accountability.

That's the culture we want to drive at TOMRA. We want a decentralized organization because that makes us faster and more agile. We push decisions out into the organization. The person closest to the problem is typically best at solving it. In all three of our divisions, we now have regional structures with clear P&L responsibility. That fits the way I think you should run a company in a fast-moving environment like TOMRA's.

When you first encountered the possibility of joining TOMRA, what intrigued you the most?

I was very happy at Yara and had no plans to leave. But when you sit in a corporate management position, you get calls from headhunters quite frequently, and I was always saying “no, I'm happy where I am”. Then this headhunter called and said, "I think I have something for you now. It's the CEO of TOMRA." And I thought, yes, that is something I would really like.

Why? First, it's a purpose-driven company, which is important to me. I want to spend my time and energy on something I find meaningful. Second, it's global. I've always worked in international environments, and a Norway-only role wouldn't have attracted me. Third, it's technology. I'm an engineer originally, and I've always been interested in technology, and this is a high-tech role with strong growth opportunities. That combination matched exactly what I was interested in. When they sent over the description of the kind of CEO they were looking for, I felt: yes, this is exactly me. This is my profile.

I'm not the best fit if you want someone to maintain the status quo – that's probably not my strength. But if you want someone who is genuinely passionate about being better today than yesterday, that's me.

Almost five years into your tenure, much has happened, both within TOMRA and in the world around it. What have these years taught you, and have they changed your perception of TOMRA now that you're inside the company?

Coming into TOMRA confirmed the positive impression I had from the outside. When you join from outside, you always wonder, is the culture going to live up to my expectations? Are the business opportunities really as good as they look? Do we really have as strong a position as we think? In general, what I found just confirmed what I had expected.

TOMRA's strength is that in every segment we operate in, we are the clear leader. You could question that on Food, but in general, we are the clear leader and the clear technology leader. We have fantastic people and significant opportunities. While, of course, running a business is never linear, so we've had challenges during my time here. But what has really impressed me is the company culture. I'm a strong believer in company culture and its value. At the end of the day, that and the right people are what matter. If you also have a clear direction, they will deliver over time. I've been very impressed by how this organization has responded to the challenges that we have faced.

Could you expand on what a good culture looks like to you? What's the TOMRA secret sauce when it comes to culture and people?

Different businesses should have different cultures, because the right culture is the one that delivers on your strategy in your industry. First, you need to define the culture you think you need. Then you need to manage that culture, because every business has a culture; either you shape it, or it shapes you.

Since we're a growth company, we need a culture that fuels growth. Innovation is key to delivering the growth and margins we want, so we need a culture that drives innovation. That means curiosity is extremely important. We talk about embracing change and want to inspire our customers.

Then it's important that we don't just innovate but actually deliver results. So responsibility is an important part of our culture: we empower ownership, we take responsibility, and we walk the talk. And we want to maintain an entrepreneurial spirit. We still feel we're a startup. We just started up a bit more than 50 years ago, and we want to keep that entrepreneurial spirit, meaning we should be agile and fight bureaucracy.

The last aspect of our culture is care. Care is a very strong part of the TOMRA culture. That means we care for each other, we care for our customers, and we care for what we are doing: the environment, the planet. So we have a very purpose-driven culture, combined with these innovation and responsibility elements.

You're here in Asker, and the local culture or country culture often shapes how a company operates. Is there something unique about being here that helps you shape the culture or your worldview?

I think we're influenced by Norwegian culture: very down-to-earth and non-hierarchical. People have exactly the same benefits: there's no separate parking spot for me, anyone can call me, and all managers will pitch in when needed. That's the backbone.

But at the same time, I think TOMRA is much more international. From day one, Tore and Petter Planke were thinking internationally. So we're a good mix: a bit down-to-earth, non-hierarchical Norwegians, but with a truly global vision.

The Collection division

TOMRA has been present at the creation of deposit return systems in market after market for over 50 years. What do you think about that institutional legacy as an asset, and does it change how new markets receive the company when you launch in a new country or region?

It's a great asset to have. We have more than 50 years of experience in deposit markets, and we operate in more than 40 deposit markets around the world. We have so much experience with what works well and what doesn't. When you initiate a new deposit market, you know what the key things to reflect on are and what will make it a success. We've collected all of this knowledge from all of these markets and based on that, developed key principles for launching a new deposit market, which we share with all interested stakeholders, from governments to the beverage industry, legislators, and others.

Those principles are very much linked to what it takes to launch a successful deposit market. First of all, it needs to be convenient for the consumers to be able to return the bottles. Second, the deposit value needs to be high enough to provide the right incentive. Third, since significant amounts of money flow through a deposit scheme, the integrity of the system is very important, including fraud protection. Finally, you need an extended producer responsibility framework behind it. So the key principles really come down to convenience, a high enough incentive rate, and integrity of the system.

Are you mainly involved after legislation has been approved, or do you engage with governments in advance?

We see it as part of our role to share our expertise. We have a lot of experience with deposit systems and extended producer responsibility systems, and we drive circularity for other materials too. On our website, you'll find white papers where we've collected our experience and recommendations.

We have a public affairs team that does advocacy work, working with governments and other key stakeholders, including industry organizations. We share our knowledge and competence on what the key things are to consider to drive the desired result: increased circularity, reduced carbon emissions, and reduced litter.

That typically requires clear targets for Collection and clear targets for reuse or recycled content, because these create demand and drive investment. We engage in these dialogues in Europe, the Americas, and Asia.

Have there been markets where legislation wasn't a major driver, where things developed on their own?

For deposit systems, we believe legislation is necessary. Our experience is that voluntary schemes don't work because you don't reach the necessary scale, and the system becomes very inefficient.

When a new deposit market opens, how does the commercial process typically unfold? Do retailers approach TOMRA, or does TOMRA initiate those conversations?

I think it's quite an interesting business, and quite different from many others. First, there's a legislative process: a country decides to introduce a deposit system. Then, when it goes live, the whole market is up and running within two to three years. You seldom get those kinds of jumps in a business. Typically, you grow gradually in each market or segment, but here you really get these jumps.

The typical process is that once the legislative process has started, dialogue between the retailers and us begins one to two years before they go live. Some retailers want to test equipment, so it's a close dialogue where we also educate them. Some of these retailers may not have experience with deposit systems, so we explain how it works, what's important when selecting a provider, and which machines they should evaluate from our broad portfolio. Some will also start testing machines from different providers.

After that, retailers typically run a tender process. They send out tenders to different providers, negotiations follow, and typically a frame agreement is put in place for a certain period, with call-offs from the frame agreement. Our main business model is selling the machines and providing service. In some cases, we also offer throughput agreements or leasing agreements, where we keep the machines and lease them out, with the customer paying either a fixed fee or, typically, based on the number of beverage containers going through the machine.

In what situations do you use a throughput model? Is it because customers request it?

At the end of the day, the customer decides. We often see them ask for both so they can compare and decide whether leasing or throughput makes more sense than a sales and service model. The key for us is that we're willing to offer both, so they have the option.

We do something similar on the service side. We have different types of service agreements: a fixed fee or throughput. We think a throughput service agreement is a very good model, because the actual cost of service depends on the number of containers going through the machine. It aligns the cost with what's really needed instead of charging a fixed fee, since wear and tear depend on the number of times beverage containers have gone through the machine.

You've had the throughput model for about a decade. From a profitability standpoint, does that model give you a stronger incentive when more bottles flow through the system, or do you see the other options as equally attractive?

Historically, we've had higher returns on throughput than on sales and service. So the model has been more profitable for us in the past, but we don't want all of our business to be throughput, because we couldn't carry that much capital on our balance sheet. So we think a balance is good.

The advantage of throughput is recurring, stable revenue. With sales and service, you have the sale, then a guarantee or warranty period, and then the service revenue. Our view is that a balance is best. We believe the current split is a good one. If Collection is 100% of revenue, roughly 60% is sales and service, 20% is throughput, and 10 to 20% is the material recovery business we have in the U.S.

Do you have your own service technicians?

We mainly have our own service technicians, and we think that's important. After we've sold a machine, they are the ones who meet the customer and become the face of TOMRA. So it's essential they are well-trained and have the right competence. In most markets, unless it's a very small market initially, we will always have our own service people.

How difficult is it to set up a service organization when you enter a new market like Poland?

It's very interesting, because as I said, you build an organization from scratch into a fully fledged one within two to three years. Poland went live last year, and we now have around 100 people there. Two years ago, we had perhaps one or two.

We've done this many times now, and we are actually very successful at it. We focus on culture from the start. When recruiting, it's important to find people who fit our culture and have the right attitude. We start early by recruiting the country manager, who is typically the first hire. We believe in having local country managers who understand the local culture. Then we bring in commercial people, because the initial phase is about commercial dialogue with customers. Then we add at least one service technician for testing.

As we begin installing machines, we build out the service organization, since they're also involved in installation. In that phase, we draw on people from other TOMRA markets too, bringing in service technicians from elsewhere to help with installation and to train local hires. By the end of the first year after go-live, we typically have the whole organization up and running.

How important is scale in deploying your service technicians efficiently?

Scale is important for the service organization. That's why we have an ambition that we should always be the significantly largest player in a country, because that gives us a much better scale than competitors. That is so important for customer satisfaction and for building loyalty.

There's the initial rollout, where you install a certain number of machines that typically last 7 to 10 years before replacement cycles begin. But retailers are also constantly closing and opening stores, so there are always sales opportunities. Strong operational delivery is what creates that loyalty.

Deposit systems are very different across regions, and TOMRA has adapted its model over the years. How do you think about that adaptability?

I think it's extremely important. We want to maintain global expertise in certain areas and utilize global scale in production and supply chain, but we also need to adapt to local needs. That's the balance we play.

For example, here in Norway, we have the global supply chain organization handling procurement. We have R&D, and we have production both here and in a few other places. But we always adapt to local requirements. In Poland, many of the retailers have very small stores and don't want a reverse vending machine inside the store because they have no space. They wanted an outdoor solution. Typically, you could build a shed and put the machine in there. But we have developed a new outdoor solution that doesn't need a shed. It can stand outside and handle very cold and very warm weather.

We had an outdoor solution from the U.S., but the weather conditions in Poland are colder than those on the East Coast, so we adapted the machine to local conditions. That's what I mean by leveraging global expertise but adapting to local need, which I think we have been very good at.

We also adapt our business models. In most European markets, it's a return-to-retail system, meaning retailers must take back beverage containers. In Australia, retailers don't have that obligation. Instead, returns happen at parking lots or depots, and the producer organization tenders the whole market. So, your customer there is not the retailer but the producer organization. When they tender, they want a partner who provides not only the reverse vending machines but also full service and logistics.

In Australia, we partnered with a waste management company called Cleanaway and created a JV. Together, we bid on these tenders and then handle everything, from installing and servicing the machines, which we own, so it's a leasing model, to picking up the beverage containers and taking them to be sorted and recycled.

Do retailers care about machines being inside their stores, perhaps for the extra sales opportunity?

Yes, it's very interesting. In Scandinavian markets, retailers want machines inside the store. We have the option to pay out to a credit card or loyalty card, but they still want the printed receipt because they know it brings the customer to the till, which means they'll buy something. In Poland, as I said, they wanted machines outside because they didn't have space inside. In the U.S., retailers typically don't want machines inside the store either, because many homeless people collect beverage containers, and retailers don't want them in their stores.

Again, you see how much it varies by market. As retailers gain experience, they realize the machine drives traffic, and over time, when they build new stores, they tend to make space for a reverse vending machine inside. If volume is high, retailers may opt for a back room with more bins so people don't need to empty them as often.

Are there any markets that have opened up for deposit systems where you have decided not to pursue because they required a solution that didn't fit?

Our objective is to take a position in all new deposit markets. If we couldn't have the right solution for a particular market, I’m not sure who would. We have the broadest portfolio of all the players.

We've strengthened our simple machines portfolio. A few years back, we didn't have a strong portfolio for really small, simple machines. It's almost like this innovator's dilemma. We've been really good at developing advanced, high-tech, reliable machines, and there was no one with better solutions in that space. But we didn't really have something competitive enough for a small retail shop or kiosk. It's very difficult for our environment here to develop something they feel is good, but not as good as it could be. We gave our Chinese R&D team that challenge. That's where we've strengthened what we call our basic line, which uses different recognition technology than our other machines. So now we have a very broad portfolio.

How do you see the future of multi-feed machines compared to the simpler ones?

I think most medium and large retail stores will want the multi-feed because it's much more convenient to throw a whole bag instead of inserting one container at a time. For smaller stores, it will be too expensive, so they will continue to use smaller machines.

In a new market like Poland, where retailers aren't used to deposits, it's difficult to sell expensive machines from day one because they haven't yet seen the customer value. In mature markets, where retailers really understand the value of a good reverse vending experience, you get more traction. That dynamic creates good opportunities for us, because in new deposit markets we initially sell simpler, smaller machines, and as customers gain experience and see the value, we can upsell.

Image credit: Sverre Chr. Jarild.

The Recycling division

The Recycling division grew remarkably between 2020 and 2023. Looking back, how did TOMRA think about that period internally? Was there a sense that the market's momentum was unsustainable, and were you able to position the business proactively ahead of the slowdown? Or did the shift come faster than expected?

We had a fantastic boom, driven by both legislation in Europe and the push from many brands to increase circularity. The market grew significantly, and we knew it would flatten out. I think we started talking about that quite early in our quarterly presentations. The growth continued longer than we expected, but we always assumed it would flatten out, because in Recycling, we sell into projects. A boom adds capacity to the market, but of course doesn't continue forever. There were 2025 targets in Europe on recycled content, which required certain capacity, with the next milestone in 2030.

We expected the growth to flatten, not decline. Then, early this year, the tariff situation came, and suddenly, the entire U.S. market stopped. We had planned for significant growth, then a few flat years, then growth resuming, and we had adjusted our organization thereafter. With the tariffs, the Trump administration, and increased global uncertainty, we actually saw a decline. Last year, Recycling declined 20%, which meant we had overcapacity in the organization.

Based on that, we took action earlier this year to right-size the organization, removing roughly 175 positions to match current activity levels. But we still believe the fundamental drivers are strong. European legislation requires at least a doubling of capacity before 2030. I also think that with the whole focus on supply security and import independence, circularity continues to have strong drivers. We don't expect the market to pick up this year, and possibly not next year either.

When you meet Recycling customers, primarily in Europe, given that mandates are coming and tightening, is there a commercial balancing act in those dialogues? Customers know they'll need to build out capacity, but is it a waiting game, with capital spending cycles and commodity markets needing to align before they commit?

We sell into different segments with different dynamics. Our main segments are metals and what we call plastics and waste. Starting with metals, that market is actually quite good. We haven't seen a decline there; we've actually seen good momentum. It hasn't grown enough to compensate for the plastic decline, but on the whole, the metals market is healthy.

We see particularly good traction in aluminum. Commodity prices for metals have risen significantly, which makes the business case for investing in metal recycling positive. Still, global macro uncertainty makes everyone a bit cautious, so you don't see a significant increase in investments. But over time, I think those will come.

The challenges are really in the plastic and waste management segments. Here we sell sorters either to waste management companies that extract different materials from household waste, or to plastic recyclers who receive mixed plastic that needs sorting before recycling. Especially in Europe, plastic prices have been very low, and there's been a significant import of recycled plastic from Asia. That's depressed the market, and several recyclers have had to close because they weren't making money.

With the war in the Middle East, plastic prices are now rising, which will mitigate the situation a bit in the short term. To bring investments back, recyclers will need higher plastic prices for a longer period, or we'll need to get closer to the 2030 targets. Even so, investments are still happening. In countries with funding for waste management infrastructure improvements, we see investments. There are projects in Spain, and some in Eastern Europe. Instead of large new recycling or waste management facilities, we're seeing smaller upgrades to existing ones.

The pipeline is good. We see that projects aren't being canceled, just pushed out in time. You see this across all industries, selling into CapEx investments right now. Companies are looking at their CapEx plans and delaying what they can, given current macroeconomic uncertainty around inflation and interest rates.

Looking back at your time at Yara, which is also a cyclical business, what did that experience teach you about managing downturns? And when competitors are struggling, do you see that as an opportunity?

Execution and operational discipline are crucial in down cycles. You need to be highly efficient in everything you do. Downturns are also an excellent opportunity to work on process improvements. When you're growing approximately 20% per year organically for three years, just executing on that growth takes all your focus. Working on process efficiencies and procurement during those times is very challenging.

In these kinds of downturns, you have an excellent opportunity to really look at how to improve procurement, production, and cost flexibility. So all downturns create opportunities, and it's about capturing them and making sure we do better than our competitors, regardless of whether the cycle is up or down.

The Food division

The Collection business has benefited from first-mover advantage, technical leadership, and legislative tailwinds. Food operates on somewhat different terms. How have you built TOMRA’s position there, and how does selling to a food processor differ from selling to a retailer or recycling operator?

In Food, we have quite different customer segments. We sell to everyone from small packhouses, sometimes owned by individual farmers, to large food companies like McCain.

It's very different customers that you are selling to, but some fundamentals are similar across all industries. For us, it's about understanding the customer needs and driving through innovation. In every segment we operate in, we focus on: do we really understand the customer? What is the need of the customer? And how do we make sure we have an innovation agenda that meets that need? We also say we should inspire the customer. We should be the ones who come up with things our competitors don't.

We believe in a decentralized organization, and we've regionalized so we can stay close to customers. That's also part of what we did in Recycling this year. We've used the opportunity to change the organizational structure. You want to have local salespeople. Previously, we had global category managers, but it's very difficult when they have to travel the world. Now we want local salespeople and local service people who stay close to customers.

In all three divisions, a sale might take years. In Collection, as I mentioned, we may be testing with a customer two years before the deal closes. In Recycling and Food, we typically begin a dialogue when a customer is just considering a new packhouse, food processing unit, or recycling facility. We support them through engineering, providing input as a technical sales partner. The commercial terms come at the end.

Negotiating with a large global food company is very different from negotiating with a local farmer, but the fundamentals are the same: understand the customer, stay close, and ensure we have the best technology to meet their needs.

With your largest global customers, is the relationship coordinated across multiple facilities at once, or is it site-by-site?

It varies by company. We see this with retailers as well. Many large retail customers operate across multiple countries; some have very centralized procurement, while others leave a lot to local units.

For us, the key with these accounts is managing them at both the global and local levels. You need to manage the key procurement people globally, but if a new food processing plant is being built locally, you also need to stay close to the people developing and operating that plant. You need to operate at both levels.

TOMRA's three core divisions differ from one another, driven by different customers, commercial dynamics, and regulatory environments. How do you run a group like that? Where does central leadership add value, and where do you step back and let the divisions operate independently?

First, what is the common denominator across TOMRA? Everything is about resource optimization. Everything is about sensor-based solutions for doing that. And every segment we operate in is global, where we can take a leading role.

Our operating model, I call it that we are a strategic family builder. That's what we call ourselves. We are a family. We have an overarching strategy for TOMRA. We have the same vision and mission for everything, but also overall targets and strategic focus areas, and more. We also have empowered children in this organization: the three divisions, with end-to-end responsibility. Each has production, supply chain, and everything needed to deliver on its part of the strategy.

We then want a lean center. Across TOMRA, we drive only what truly needs to be driven across (such as reporting) and what adds significant value. The strategies and customer segments differ across divisions, so they can deliver on their strategies independently. If we centralize too much on operations, we become slower and less responsive.

What we do drive across the group is culture, brand positioning, and selected areas where there is significant value. AI is a topic we're working on across the group to accelerate implementation in the different entities. We don't want to become bureaucratic. We want to be fast and agile, and keep the center lean. At the end of the day, the money is generated out in the business; that's where most resources should sit. The group center should support these decentralized units.

Has this always been the case since you acquired the various businesses and expanded into Recycling and Food? Or is it something you've driven more in recent years?

We've grown a lot, and as you grow, the right structure changes. When you're smaller, a functional organization is fast. But as you grow, Recycling is a good example: as it grew to 900 people, having a functional organization with just a P&L on top was no longer efficient. So we changed it. We changed Food two or three years ago in the same way.

In Collection, we've had this structure for some time. Collection has global functions like production and supply chain, where you really benefit from scale, and local market units. Now we have similar structures in all three divisions: Food has local market P&Ls with global production and supply chain; Recycling went live with the same model earlier this year.

This is something we want to drive and push. As you grow, it's so easy to become bureaucratic and slow. You need to fight bureaucracy every day and constantly question. At the same time, you need compliance, reporting, and efficient processes, but those should genuinely create value. For everything else, you need to empower the organization.

How do you think about capital allocation across the different divisions? With Collection generating the most cash, how do you decide how to allocate that?

That's a very important part of the group and its strategy. We allocate capital between the divisions and other initiatives, partly through an annual process, and partly based on individual project proposals. We give priority to existing divisions with a proven track record, so Collection generally has priority. Food went through a turnaround two or three years ago. During that period, Food needed to prove it could grow profitably before receiving significant new investments. It's now back on track, so it will also have priority. With Recycling, we now need to get it back on track.

And then we have a firm dividend policy: we pay out 40 to 60% of EPS to our shareholders. That's important to some of our long-term owners, so the dividend also has priority. So the priorities are the core divisions plus the dividend. With the remaining cash, we always need to evaluate whether we have the right internal opportunities to deploy it or whether we should pay an extraordinary dividend, which we have done in the past.

During your tenure, you've seen very different periods. With 50 years of experience, TOMRA has weathered a range of political and market conditions. How does that history equip TOMRA to handle these challenges?

Resilience is extremely important in this period, and being able to adjust quickly. Agile is such a buzzword, but actually being agile is critical. TOMRA has always had a can-do attitude. If a challenge is thrown at the organization, they'll solve it.

I joined TOMRA at the end of the ESG bubble, and then came the post-COVID challenges with high inflation and supply chain issues, particularly with electronic components. We had to redesign our circuit boards because we couldn't get the components we needed. And then Russia invaded Ukraine, so we had to pull out of Russia. Then we had a cyber attack, and then Food declined, and now we have the downturn in Recycling.

Many things have been thrown at the organization. I think the cyber attack is a very good example of how this organization responds. It happened in the middle of summer when most people were on holiday, but they came back to work to safeguard the company and our customers.

All our reverse vending machines are connected. As part of the cyber attack response, we proactively shut down all our systems to stop the attack so we wouldn't be locked out, and no sensitive data would leak. That meant our customers couldn't access our systems either, and we knew the reverse vending machines would stop working after a period because they need to offload their memory to our backbone solution.

The team sitting one floor down from here built that backbone system from scratch in five days, working day and night. We had to call people back, and others came in without us even asking and offered their help. That's the kind of culture we have. It's very much linked to our purpose-driven culture: people feel a strong purpose and are willing to go the extra mile. They care about the company and our customers, and when challenges arise, people really pull together. We had to send people home to sleep because they would have stayed 24/7.

I think that is really the legacy from Tore and Petter Planke. From day one, they focused on building a strong culture where people had fun at work and where no problem was impossible. That helps when things are thrown at you.

You mentioned coming in at peak ESG, and that market sentiment has shifted since then. How do you see that shift?

We believe the fundamental drivers for our business remain strong. Looking at Collection, the European legislation means the entire EU will need to adopt deposit systems over the coming years.

In Recycling, the drivers for circularity are still strong. Circularity is about more than reducing carbon emissions; it's also about supply security. Now, with the current geopolitical situation, all regions are looking at how to create more independence. Keeping plastic in the cycle instead of burning it requires less oil. Recycling metals and rare earths makes you more secure and less dependent on imports. So the focus on circularity remains strong.

Parts of the Recycling business are profitable in their own right. The metals business doesn't need legislative drivers; high metal prices drive investment. Food has very different drivers, unrelated to ESG.

In the short term, brands are putting less focus on increasing circularity, but the focus is still there in the medium to long term. On deposits, littering remains a significant issue, and plastic in the oceans is still something people care about. These problems need to be solved, and we feel companies are willing to invest in those solutions. And then we know things don't move linearly.

After significant investment cycles, there's a slowdown, then it comes back. For us, it's about focusing on the segments that are working now and making sure we're positioned for when others come back.

How have TOMRA's margins evolved through the years? Are they primarily driven by commodity prices or by increasing competition?

Unless you innovate, you'll always face margin pressure; that's just how business works. When you launch something in a market, competitors will develop something similar within a certain period, and you'll face price competition and inflation. So you need to constantly work on your COGS to mitigate inflation. To maintain margins over time, you need to innovate. That's the key for us in all three divisions: continuously refreshing the portfolio.

Do you see more innovation opportunities in some segments than others?

That's another fantastic part of this business: we have so many ideas for things we could improve. I know many industries struggle to find new improvements. We have a long list in all three divisions, so for us it's really about prioritizing. We can't afford to do everything.

In Food and Recycling, ideas can be about new segments to sort or sorting for new things. In Collection, it can be about convenience for consumers or for stores. That's an important part when we talk about capital allocation: how much should we spend on R&D, how much can we afford to spend, and then we have to prioritize within that list.

Is there a part of the business you feel is misunderstood, or something people should know more about?

I don't think people understand how cool our technologies are. That's what I feel. We need to increase our coolness factor. People know the reverse vending machines, but they don't really know what's inside one, and there's some very cool technology there.

They don't know much about our Recycling or Food sorting businesses, or the technologies behind them. It's all very advanced: many different sensor types, very advanced algorithms, AI and machine learning, and optimized mechanics going really fast.

Horizon and the road ahead

With your Horizon segment, you explore opportunities beyond your core divisions. How do you identify where to plant those seeds and what gives you the signal that something is worth investing in?

With Horizon, we looked at large unsolved problems within resource optimization and circularity, where we have the right to win based on our experience, competence, or technology. The key criterion is that the problem must be big enough to, over time, become a new leg for TOMRA. This isn't about small initiatives; it's about making bets that could become large.

Horizon should not be an R&D investment; it's a business-building portfolio. The technology should be more or less ready for scaling. Some technology development is always needed, but it should be at a stage where you can start building a business around it.

Based on that, we have originally selected three areas: TOMRA Feedstock, our reuse venture, and textiles. With a portfolio like this, you base it on certain assumptions, then test whether those assumptions hold. With textiles, we realized within two years that the timing was too early. The market wasn't there. Our recycling technology can sort textiles, but the recycling technology itself isn't quite ready, and brands aren't yet willing to pay the premium because there's no legislation. So we stopped textiles and instead invested in smart waste management, which is now sort of the third leg of the Horizon portfolio.

We manage Horizon a bit differently compared to other divisions. We use a stage-gate process tied to investments, continuously evaluating the portfolio and the original hypotheses. Should we continue, change direction, or pause? Right now, our Horizon focus is on extracting value from what we've already invested in. In our feedstock venture, the OMRÅ plant, the focus is to get value out of that. We need to evaluate over time how to develop it further. The recycling market is in a challenging situation now, before we look at how to develop it further.

If you look ten years out, what does TOMRA look like as a business?

That’s going to be very interesting to see. In ten years, I think we'll be significantly larger than we are today, and even more global. I expect we'll have grown our business in both Asia and South America much more than today.

I think the core of TOMRA will be quite similar to today. We'll have a very strong Collection business with a very strong installed base that we can really leverage. We'll have the two other legs, Recycling and Food. Potentially, we'll have a fourth leg that's emerged from our Horizon portfolio.

I expect AI to be integrated into everything we do. I think it will be very interesting to see how the workforce of the future evolves, with a mix of digital and physical workers. We'll be more data-led and more solution-oriented, with a higher share of recurring revenue.

I expect us to continue as the clear leader in the segments we operate in, and I hope we'll still have this entrepreneurial culture. We've tried to remain a startup for 50 years, and I hope the next 10 years will see us as a large startup company with a very capable, motivated, and purpose-driven employee base.

Thank you very much for your time, Tove.

Thank you.

Article image credit: Finansavisen