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Chemistry, Materials & Packaging
How to Invest in Municipalities to Increase Recycling in the U.S.:
The Case of the Closed Loop Fund

How do we make recycling work and be cost-effective? Bridget Croke, Director of Partnerships and Communications at the Closed Loop Fund (CLF), posed this question to a panel of three of CLF’s leading investors: Tim Carey, Senior Director of Sustainability & Recycling at PepsiCo; Monique Oxender, Chief Sustainability Officer at Keurig Green Mountain; and Ashley C. Hall, Senior Manager of Product Sustainability at Walmart.

Croke began by framing the conversation with municipal recycling facts. Cities spend about $5 billion a year just sending waste to the landfill, while there’s a projected $11 billion to be made in end-markets. Though recycling has increasingly incorporated more materials, materials such as glass, films/flexible and rigid plastic are still difficult to transport and sort, respectively, and when things such as tires and clothing end up at the recycling center, the city spends again to move it to the landfill.

According to Croke, what’s lacking — or rather the greatest opportunity — is infrastructure.

“We don’t have consistent modern infrastructure to make the system work all the time, everywhere,” she said. She followed with a clip from Jon Oliver’s “Last Week Tonight,” which concluded, “Infrastructure is important, but not sexy.”

The panel then discussed how solving infrastructure gaps would help solve their waste goals. Oxender jumped in quickly to discuss the K-cup.

“If we’re going to talk about recycling, we need to talk about the K-cup and how we’re making it sustainable,” Oxender said.

She described Keurig’s three-part strategy to transition to a recyclable, polypropylene K-cup, which focuses on design, infrastructure and end-markets. She described the company’s challenge to find a new, recyclable material that still guarantees customers the simplicity, convenience, choice and quality that they look for in Keurig products.

“We executed on a design that works and now we have to replicate that on the new cup,” she said. “We’ve been told for the last 10 years is that it’s too small and it’s going to end up in the landfill no matter what. It’s not just a K-cup or Keurig issue — it’s a small item recovery issue.”

The company spent months testing in giant Murphs, which consisted of mixing, baling and sorting through 70 tons of garbage, studying all of the K-cups found when the bales were taken apart. The tests were designed to inform the design and consumer instructions and engagement on how to get people to keep the cups out of the garbage. Oxender pointed out that representatives from the sustainability team, R&D, product development and marketing all were present for the tests, demonstrating multi-department collaboration.

Carey countered Jon Oliver and said, “I think infrastructure is sexy — it’s just finding it that’s the challenge.” There are garbage cans on most corners, but recycling bins are harder to come by and many Americans don’t have access to curbside containers. From PepsiCo’s perspective, recycling convenience for on-the-go consumers is the biggest gap.

Carey expressed Pepsi’s disappointment that recycling rates for cans and bottles remains at only 40 percent after over two decades of efforts. Their choice to partner with the CLF was part of their growth plan.

“We don’t have to rely on municipalities, we can grow together,” he said. “Our goal is to get recycling rates to at least 50 percent for cans and bottles by 2018.”

Hall agreed with Oliver’s statement: “Infrastructure isn’t sexy, but we all use it and we all need it.” Walmart sees the CLF as a way to take a business perspective on recycling, there are business cases for it out there, but executing it required assistance.

“Walmart has big, audacious goals, we need the CLF to help us get there,” Hall said.

“The days of individually funding projects is waning when there’s such a high-degree of overlap and benefits for co-creation and collaboration,” Oxender said.

Croke then explained how the CLF is investing in municipalities. To build municipal recycling infrastructure is much too costly for any one company or city to take on, but when companies pool their resources they’re able to make larger investments in municipalities. She emphasized that it was an investment, not a grant or a loan to cities, and once cities have made the repayments, “it’s all gravy for them.” However, there are still some barriers to cities applying for the investment.

“It’s hard to give money to cities, there’s a lot of red tape. Cities have to go through city council and there are legal hold-ups that keep them from taking us up on this. We’re realizing where the big bottlenecks are and where we think we’re going to make the most scaled impact and what’s most replicable and how to unlock key bottlenecks,” Croke said.

An audience member asked why the CLF wasn’t pooling its influence to affect policy rather than just focusing on capital investments. Croke answered that CLF isn’t only solution out there: “there are other organizations that are doing amazing work elsewhere that we hope to have partnerships with. EPR isn’t the only policy solution — there are great local policy solutions as well.”

Hall and Carey also highlighted other recycling initiatives they’re involved in. Walmart is part of the Sustainable Packaging Coalition, working on a more clear recycling label; and PepsiCo makes donations to The Nature Conservancy and an organization that works with veterans with disabilities when people recycle.

Croke closed the discussion by inquiring about end-market creation and how each company plans to close the loop naturally. Hall said Walmart is hoping to use three billion pounds of recycled materials in their products by 2020. Walmart is also using an index from Sustainable Consortium to find hotspot environmental issues and asking suppliers how they’re measuring, how are you keeping track of their materials.

“We’re one of the largest buyers of post-consumer bottles,” Carey said. “If you look at Naked [Juice], they’re made of 100 percent post-recycled content; if we can reclaim our other products we’ll use them more. There’s a market for it. I’m telling designers they have to do it.”

Oxender closed by emphasizing the economic health of their products as well as their sustainability. In selecting a new material for the K-cup, they thought about commodity fluctuation, just as they did for coffee.

“How can we, by design, increase the value of material as it’s reclaimed?”