Plastic Recycling: Things are Worse Than You Think

Will:
Hey everybody, we are back. This is Safety Stock. That’s Dan Magida. I’m Will Davis. And guys, we’re gonna jump right into it today. I’ve got something that’s on my mind, been talking about it with Dan. And you know, from a country perspective when it comes to recycling, we are failing Dan. We are failing. There has been some recent numbers that have been shared. And specifically just for plastics. Just plastics, we are only domestically recycling 3% of

Dan:
Plastics. So low. So low. It’s awful.

Will:
It, it’s, it’s mind bending to me, Dan, that we go wherever we are. You take your pick, we are in, you know, I’m currently in New Hampshire, Dan’s in New York. Dan’s got the best chance of this actually from happening. But you go and you put your materials into the recycling bin and you actually think that once it goes into the bin that you actually are going to have it recycled. You have you, you’re doing your civic duty, you’re doing your job. But if you take a random person and drop them in the US, wherever it may be, there is an 85% chance that that is going straight into the landfill. 10% of the chance are 11 is getting burned. So outside of that, that leaves it for either domestic recycling or international recycling. But it’s bad, Dan. It’s bad.

Dan:
Yeah, so I mean it’s, it’s one of those things where you’re, because to your point, you’re condition to, you got the bins, you know, your, that you put your trash in or your recycling or your paper in and you think it’s gonna go somewhere or it’s gonna go to the landfill. But then what happens there, and I all know I don’t have a magic bone on how to fix this, but there’s definitely a lot of areas where it is a concern. People have been raising this issue about recycling for a while, but where do you go from here? Cuz the, the consumption rates are increasing annually where we have 40 million tons of waste in the US just for plastic alone in 2021. Well, so it’s not like it’s a small number of plastic waste.

Will:
No. And, and so I think we we’re gonna get to, you know, some ideas here in a second, but just, I wanna continue to paint this picture, you know, cuz I, I think, you know, people today think that things may be rosy. You know, back around like in 2018, China stopped taking plastic or taking trash effectively from the US and they banned from coming in. They had their own problem. So any numbers that were put on a boat and sent to going to China was considered recycled no matter what happened to it. So that was bad enough, right? So then those numbers came down as that ban went into effect. Additionally, you have a lot of these plastic packs that corporations are a part of or governments are a part of where they’ll say, you know, by 2023 we need 15% post-consumer recycled content going into plastic bottles. Or by 2025 we want plastic bottles that 50% of them either have PCR in them or that they are compostable at the current track that we are on today, there is no chance of that happening whatsoever. Like how do we

Dan:
Get that’s, that’s across all industries. That’s,

Will:
That’s across all industries. Like, not, not just like a, not just personal care, not just beauty, not just like any industry. There is no check

Dan:
Average everything. PT HTP doesn’t matter, right? It’s not, it’s not happening.

Will:
Right. It takes, you know, for you to bring on a certain facility that can go and, you know, put on, you know, take, go do five ton, 5 million tons of trash. You know, if you’re going through and process like plastic from that side, 5 million pounds of plastic to go through processing, you know, it takes around nine months to a year just to get that facility up and running with approvals as it is today. So that’s, that’s just 5 million. And then if you do add lines, not only that, but you, you need to have plastic available for them to turn it into recycled content. Like it’s, it’s one thing to bring it up, but you need to be able to feed it in order to make it into recycle plastic that you can actually use and put into these bottles. People are having to purchase plastic and bring it in across many states, like many states, the reasons why things work well in California and the reasons why you get them from like places in New York is because those are the places that are actually the most fervent about actually doing something with their recycling. It is a lot more cost effective for people to put effectively pa plastic bottles into the ground than it is to run them through any type of supply chain. Much less through the process of getting them to a facility that can actually do something with it. Like there’s no, there’s no point for them to do anything otherwise because they are not incentivized to do it. So then it’s

Dan:
Not even like the consumer or the brand’s incentivized either. Cause it’s actually more expensive to their,

Will:
It’s more expensive for ’em. So if it’s more expensive for our brand to go use a pcr, if it’s, if it’s harder and more expensive for someone to put the plastic through a process to actually recycle it, I’m like, what are we thinking that it’s actually going to get to the point to where by next year or by 2025 we’re going to have any type of significant gain? Well

Dan:
I think people, yeah, I I the counter on the call side is we don’t, the change in everything when it had the impact it could have on, on the environment and like runoffs and waste in the ocean and everything. I don’t know the full details there, but to your point earlier, it’s if we’re only recycling, say three to 5%, just a plastics in general, off of the 40 million tons in 2021 and we have what, close to 400 million tons of plastic waste and that’s growing at an annual rate of 9%. It’s not like we’re making that growth rate in comparison to our recycling rate. It’s not like it’s keeping up with it. So you’re just gonna have more, so your recycling rate’s going to actually decrease percentage wise because we don’t have the, I don’t know if it’s capacity or or the land, the landfill space to actually recycle those.
So we’re in a problem, but how are we gonna solve this problem for brands and who have to have these mandates, who want to go to this recycling stage? What can they do short term? I mean there’s definitely alternatives that they can do today that can support them. I mean aluminum is recycled more recyclable friendly glass. But if you wanna keep in the plastic cuz you have, you still have to think about stability, which is one whole other aspect that we can get into as well with the pcr, how that’s touching your formula if you’re in a, in a personal care or beverage, how does that react? So there’s, there’s a lot of testing that still needs to be done and validated before we Yeah, there’s make these switch on the final product side.

Will:
No, there’s, there’s really like short, medium and long term solutions. Like short term is, there is currently there is PCR capacity out there. Like you can, you can buy PCR material and there is some there, it, it’s more expensive depending on where you’re getting it from. But it can be to the point to where it could only be, you know, you know, depending on where five to 15% more expensive in terms of what it is there. So could you stomach it based on your margins? You know, that’s a question that you have to have and you have to take a look at business case wise. There is a medium level type of outlook where you know, at least you can use plastics that can be recycled, meaning they have a better chance of it happening. Whether it be, you know, p e t which is effectively like a water bottle is clear or a milk jug, hd p those are the two ones that have the best chance of being recycled. If you are drinking anything else or you’re using something else that’s not one or two, then most likely it’s going in the landfill.

Dan:
Yeah. Third acrylics don’t use a

Will:
I Yeah, we, we’ve been, yeah, if it hast, if it’s any weird, if it has a seven, if it has a four, a three, a six most likely

Dan:
A code just for

Will:
That’s the recycling code. Polypropylene

Dan:
Of a

Will:
Polypropylene has a little bit of a chance and that gets settled out with the hdps of the world. But you know, that’s for another time. You know, the, the bigger issue here is that unfortunately it’s going to require government intervention most to get this going. You’re going to have to have some type of financial incentives for an overhaul for people to actually go through and put in the work to put in systems and say this is what makes sense to do it. There’s technology out there, Dan that can grind up plastic down to five millimeters. Millimeters are tiny, you know, if you think about it, think of like a piece of sand a little bit bigger than a piece of sand. It’s tiny that can analyze the color of what that plastic is and blow it with air into the right plate, the right place to go. The technology is out there to do it. You have to spend the money, you have to put the time and the infrastructure in. If we don’t do that, we are going to continue on this path to the point to where it’s not going to matter.

Dan:
But I guess taking a step back for those brands who, what’s gonna happen in those next three to five years where if these presidents stay in place, we need 25% pcr, 50% pcr. These smaller brands who already are, could be tighter on margins. They’re gonna definitely feel the impact than these bigger brands because it’s it a supply and it’s gonna be a supply issue. They’re

Will:
Gonna, it priced out

Dan:
And if yeah, cause they’re not buying enough and you have the price, you’re gonna get squeezed and you’re not gonna be able to possibly do the retail. But same thing on the e-com side too. There’s gonna be certain rules in place as well where I I I, there’s certain states that are working against it where if you’re gonna buy online it needs to have X percentage to even be shipped or into the state. So there’s, there’s a lot that’s gonna have a huge impact on the, on the consumer and yeah, a lot of people are are working on those strategies today. But even the substitutes are not fully bill yet. Like Amcor who is working on initiative just on flexibles ha is, has a goal by 2025 to work on that barrier element cuz you know, for pouches or any flexible packaging that, cuz you have to separate those for recycling in a perfect world of plastic and the, and the aluminum barrier, how can we make this more recyclable? Like there’s still work on that technology. So some tech is there, not all tech is there,

Will:
But

Dan:
Yeah, it’s as always it’s, it’s all or nothing for a lot of these things. And I don’t know, it’s the whole you know, chicken the egg.

Will:
Yeah. If we, if if we got to the point to where, you know, say that number jumped from 3% to 9%, like it would overrun our capacity of what we could produce and recycle just because we don’t have the infrastructure to handle all of that volume. So like this can’t just be one of those things like where you do like one part, you know, it’s what we’ve seen in supply chain. If you, if you over index on one side, you then break the other part or you break something downstream. And so what I would say, you know, Dan, like as we always say, like what’s a good advice if you’re a brand now, like especially if you’re a smaller brand, it’s better to get into PCR now versus later because then at least when you’re working with somebody who’s selling you pcr, you’re less likely to get squeezed out when everybody starts joining in. If you’re a brand and you’re just trying to get in with the big guys, you’re gonna get screwed.

Dan:
Yeah, it’s a good time to start building those, those relationships for sure.

Will:
Yeah. So we know this episode was a little bit different but we hope that it was informative. We enjoy talking about these things. If you have any feedback, reach out to us at hello@anvyl.com. That’s A-N-V-Y-L.com. And you know, in the Anvyl software you can always do a good job about seeing what your supplier’s performance is on your deliveries and you can always put in certain notes related to what’s their PCR content is a good thing to do.

Dan:
On top of that, if you guys are interested in finding suppliers that can support you on the PCR side, feel free to reach out as well. Cause we do have a digital RQ on the platform as well where we can connect you with these suppliers to assess and aid you in the commercialization of the PCR content for your

Will:
Products. All right guys, well until then, thanks for listening and we will back, we will be back soon.