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Are Brands on Target to Meet Their 2025 Packaging Sustainability Goals?

TerraCycle’s Tom Szaky has the answer to that and more, as we also talk about what’s next and why.

Lisa McTigue Pierce

October 12, 2022

Predictions are dire for brands to meet their stated 2025 packaging sustainability goals — no need to keep you in suspense. Because if you’re in the trenches doing what you can to deliver on these aspirational targets, you probably already knew that.

In this video interview, Tom Szaky, CEO and founder of TerraCycle and Loop, breaks down what is likely to happen over the next three years, and the implications for different stakeholders: Legislators/Lawmakers, Brand Owners, Recyclers, Consumers, Packaging Manufacturers, and Retailers.

Never shy about saying what needs to be said, Szaky opines on:

• The economics of recycling.

• The misperception of Recycle Ready and Designed for Recycling.

• The consequences of California’s Senate Bill SB 343 legislation.

• The reality of compostable packaging.

It’s the quickest 50-minute video you’ll watch that succinctly yet thoroughly analyzes the serious topic of packaging sustainability commitments.

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TRANSCRIPTION IS AUTO GENERATED:

Lisa McTigue Pierce
Hi, Lisa Pierce here, Executive Editor of Packaging Digest. And I’m joined by Tom Szaky, the CEO and founder of TerraCycle and Loop.

And today our topic is going to be packaging sustainability goals. A lot of brands have set packaging sustainability goals and some of them have been set for 2025, some out to 2030. But what we wanted to do was just talk a little bit, chat a little bit, about these goals — where we are and maybe a little bit of what’s next.

Tom, welcome. Thank you for your time.

Tom Szaky (Guest)
Thanks for having me.

Lisa McTigue Pierce
So these goals that packaging … or companies have set for packaging sustainability, a lot of them were to 2025. Why do you think … is that a magic date or what’s going on?

Tom Szaky (Guest)
Absolutely. Well, I mean, historically, companies used to set on their own different packaging goals and usually five years out or 10 years out from when they set them. And there was a bunch of these random goals with random dates.

Then really to major credit to the Ellen MacArthur Foundation, they created a unified strategy — basically asking companies, starting about in 2015, to commit by 2025 to have their packaging recyclable, reusable, or compostable, and separately to start integrating larger amounts of recycled content into their packaging. And really, you know, true credit to the Ellen MacArthur Foundation. They did a great job convincing many organizations to sign on to this external goal, and that’s why the vast majority of organizations have these formal commitments around 2025.

Now, some folks who may not have joined the Ellen MacArthur Foundation packaging goals but wanted to sort of be a part of this movement may have then set their own independent goals for 2025 or 2030. And some, maybe to hedge the bet, would have called them ambitions instead of goals.

Lisa McTigue Pierce
OK, I like that: ambitions. Yes. So, I guess that kind of leads into my next question: When these goals were set, how realistic were those timeframes?

Tom Szaky (Guest)
One of the sort of interesting things here is that these goals were set 10 years ago. I mean, you know, could be 10 years ago, if not more. Ellen MacArthur Foundation has been working on this diligently for quite a while, and I think … and this is sort of the interesting thing is that when the goal is so far away, it’s very easy to commit to ambitious goals. Very likely the person committing to it will not be in the same chair. Goals come to fruition, and maybe there is the assumption of, you know, the whole industry will get together, major third parties will create infrastructure innovations. In other words, it’ll somehow happen. You know, it’ll somehow come to be. And so I think many people jumped in, and I know certainly because I’ve talked to many heads of sustainability or heads of packaging and organizations, many times organizations jumped in with absolutely no concrete plan to achieve the goal, nevertheless the ambition to do so.

Lisa McTigue Pierce
Sure. So now here we are about three years away — coming up on three years away — from those deadlines. Are most of the companies on track? Or why or why not would they be on track?

“The answer is not black and white, but I would say it is more disappointing than exciting, in general. Unfortunately. … but it’s important to first give credit that companies even tried.”

Tom Szaky (Guest)
Yeah. So, look, there’s so many companies who’ve joined. The answer is not black and white, but I would say it is more disappointing than exciting, in general. Unfortunately. And I think … but it’s important to first give credit that companies even tried. I think that’s so important before we start going into, oh, they failed, right? So it’s really important to give credit that they even try, because there’s no today legal obligation or anything like that to try whatsoever.

“If you’re a beverage company … a big part of your packaging is already locally recyclable. So there’s relatively little … left to work on.”

Now why I say it’s a mixed bag is some companies started from a very good starting point. If you’re a beverage company, like say Coca-Cola or PepsiCo, a big part of your packaging is already locally recyclable. So there’s relatively little … and especially if you’re, say, Coca-Cola, where you’re a beverage company. Pepsi being half food, of course. But in Coke’s case, a big part of your packaging is already recyclable or reusable, so there’s a very little bit left to work on. Inversely, if you’re …

Lisa McTigue Pierce
Sure, because two of the most recycled packaging formats out there are aluminum beverage cans and single-serve, mostly beverage, PET bottles. So, yeah.

Tom Szaky (Guest)
You’re exactly right. If you take … if you take something like a Coke, what are the primary packaging forms? Exactly right: PET bottles, most desirable packaging form in recycling centers. And then you can do little shifts, like changing the color of a Sprite bottle from green to white. Sorry, green to clear, excuse me. That’s an upgrade, but you’re staying in the same form. You’re just changing polymer color. Aluminum, which is recycled … material type out there. You may have cartons, which in different countries have different levels of recyclability, but they already have some level of recyclability. Then you have a very small amount of exotics, like pouches, but they represent a tiny little fraction of the whole. And then of course you have glass bottles. Many of those in countries like Germany would already be returnable. I mean reusable, and so on. That’s a good starting point.

“Let’s say you’re a food company. … Mars or Mondelēz. The vast majority of your packaging is flexible, multilayered laminate. So there, it’s a monumental task to be able to shift that to become practically recyclable.”

Now if you go … different organization. Let’s say you’re a food company. You know, let’s say Mars or Mondelez. The vast majority of your packaging is flexible, multilayered laminate. So, there, it’s a monumental task to be able to shift that to become practically recyclable. And I think every company over the past decade has tried.

Now at the beginning of the journey what I notice companies were focused on were more, let’s get the industry together. Let’s hope big infrastructure changes come up. I heard a lot about chemical recycling, you know, saving the day, you know, many people hanging their hopes there. As we are now, you know, two years to go and change, I think where the focus has shifted is what packaging shifts can I do, if possible, to make my packaging more conducive to recycling? People call that Recycle Ready or Designed for Recycling. Neither of those two terms mean recyclable, mind you. They just mean better for recycling or better theoretically for recycling, and that’s where they have shifted trying to stay within the constraints of their manufacturing process — but making the packaging better for recycling. It doesn’t mean it crosses over and becomes recyclable. In some cases, it does, and in some cases it does not.

Lisa McTigue Pierce
OK, I have to ask a clarification question here, because I’m a word person, not necessarily a math person, but I’ve said, you know, three years out, you said two plus some change. So I guess I was assuming that most companies would have through 2025 to finish hitting their goals. But I think you’re thinking maybe at the beginning of the year. You know, just a minor point there, but 2025 could be January it could be December, as long as we’re in that same year.

Tom Szaky (Guest)
I think you’re absolutely right, and I think the important thing here is both points are correct. And so let’s say somewhere between two-and-a-half and three-and-a-half years from now is when this comes due.

Lisa McTigue Pierce
OK, alright. Excellent. So you’ve already given one of what I would call maybe a secret for some of the companies who are going to hit these goals where there’s already recycling infrastructure in place, the material is valuable, the recyclate material has value in the market, so there’s that pull-through. But are there any other secrets of some of the companies that are on track?

Tom Szaky (Guest)
So I think what hasn’t really been … you know, has come to fruition I think, you know, as folks may have held hope if you will, is the secret, you know, silver bullet of suddenly let’s say chemical recycling becomes the main … of recycling, can handle mixed almost MSW, you know, municipal solid waste, and everything comes out, you know, in virgin oil state. That was a dream and is not a …  that’s not going to be in play by 2025 in that way.

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Then I think what some companies have done, have said, let’s take that existing package form and make some modest design changes that maybe like the Sprite bottle moving from green to clear, like some confection packages moving from polymer to fiber, like going from multilayer to mono-material.

“… how do we take the existing way we produce a product, and honestly simplify it, right? Simplify color, simplify number of materials, or shift material types, and those, in some cases, have tipped over and produced a really good outcome.”

So how do we take the existing way we produce a product, and honestly simplify it, right? Simplify color, simplify number of materials, or shift material types, and those, in some cases, have tipped over and produced a really good outcome. Notable examples are in the confection space. We’ve seen a number of confection brands. Kit Kat, a good example, moved from polymer packaging to fiber packaging and that’s made it recyclable in the paper stream. We’ve seen the example of colored PET bottles moving to clear. That’s made it recyclable in the PET supply chain.

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And this idea now of multilayer to monolayer has worked in some cases very well and some cases will not have a major effect. So what I mean by that is in, like, the toothpaste tube, which we’ve seen Colgate begin and then other companies have done as well — P&G, Unilever, and so on. They move from a multilayer aluminized polyethylene into a mono HDPE [high-density polyethylene] tube. And that, in countries that have strong recycling systems, has worked well. It’s not as easy to make that work in countries that have manual sortation for their recycling centers or underfunded recycling. But in wealthy countries, certainly, that’s an incredible step and renders it recyclable curbside.

And I think that’s the same in moving from multilayer films to monolayer films where it’s not as simple as just making that shift. If you have wet content on the inside of that package, then it likely in no country will become recycled. If you have dry content, similar to the toothpaste tube, in countries that have strong recycling backbones, it may be recycled. And in countries where it’s manually sorted or …  recycling backbones it will not be. It’s no matter what; this is very important: It’s an upgrade. It is an upgrade and the right thing for companies to do.

“These terms — Recycle Ready and Designed for Recycling — will be criticized deeply in 10, 20 years when they are seen as manipulating consumer perception. Because what it really means is I’m upgrading the pack, making it better for recyclers. But it does not mean … it is going to be locally recyclable.”

But we should be very cautious especially … and I think I would put a caution out to the industry at all: Terms like design for recycling, recycle ready, it’s almost like the PIC code of 30, 40 years ago. The Plastic Identification Code, you know, which is the number inside something that looks like a recycling logo. I gotta tell you, these terms — Recycle Ready and Designed for Recycling — will be criticized deeply in 10, 20 years when they are seen as, you know, manipulating consumer perception because what it really means is I’m upgrading the pack, making it better for recyclers, but it does not mean what on the face of it, it seems, like, is that it is going to be locally recyclable.

Lisa McTigue Pierce
I know a lot of people have been talking about what brand owners can do to further the acceptability of their packaging for recycling, and when they say that, they’re usually talking about curbside recycling at the municipal level. And there’s so much … there’s so much behind the scenes from that point of view. But I think, you know, not to jump the gun and start talking about the future already.  And you’re very close to this because of how TerraCycle works, taking better control at the end of life for various brands. But before we get there, which we will, tell me, Tom, what’s going to happen if and when companies don’t reach those goals?

Tom Szaky (Guest)
So I have a prediction on this, and I can actually say it to you, over the next 36 months what I think is going to unfold, 23, 24, 25. So in 2023, we are going to be in a very tough economic environment. Europe and UK, in the developed countries, is right now the epicenter of the economic decline. I mean it is really, the British pound is almost equal to a dollar as of today. There’s so much challenges and then what is going to be a very tough winter with energy prices coming.

Europe is the next sort of … in that bullseye and then the rest of the world. And so it’s important to note that in the time of recession and amplified in different degrees in these different markets, sustainability will suffer; no question. People will prioritize short-term economics on retaining their staff, on making cost of living go down, over longer term investments like sustainability …

Lisa McTigue Pierce
Like they did. Like they had to do during COVID.

Tom Szaky (Guest)
Right. Exactly right. And so first, it hasn’t been easy. The past, you know, two years and the next year leading into these goals coming due have been lot of tail … sorry, headwind that was not expected or could have been predicted. So that’s the first thing is 23 is going to be soft. People are going to just be struggling with things that are outside this domain.

What I think is going to then happen in 2024 is people are going to start getting concerned that there’s going to be catastrophic failure in 2025 vis-a-vis these goals and will start making big consumer-facing launches. You know, will start doing whatever they can, whether launching voluntary take-back programs, whether making these, you know, their packaging compostable or moving towards mono-materials and things of this nature.

And then will come 2025 where … Look, it will have gotten, you know, by then over the past 10 years, people … there will have been improvements that people can point to. There’s no question this has been a great journey to make these commitments. But what the lay public will see is a lot of failure. And you know how the media is today. There’s way … better clicks out there on saying recycling is a lie or recycling is a failure or companies have completely, you know … those get better clicks then something a bit more subtle saying this many companies may, you know, this part of the business made the goal, this struggled for this important reason, blah blah blah. And so it’s going to be … there’s going to be a lot of anger. It’s going to be a lot of consumer anger, NGO anger, lawmakers, all these sort of, you know, parties.

And then I think what’s going to happen as a response from companies … and I’ve asked, you know, many of the leadership, you know, C-level folks at these companies where they may struggle meeting the goal, what are you going to do. And what I hear unanimously is they will say we did what we can, but these other industries, you know, didn’t produce the infrastructure or couldn’t do this. And so we failed not because we failed, but, you know, we did what we could, but others didn’t comply.

A good example of this: Back when Starbucks made their commitment in 2008 to make their cups recyclable — I think it was by 2013 or 2015, I can’t quite remember, but, you know, somewhere in there — and it didn’t work, they said, well, it didn’t work, you know. We know you can recycle a cup and, look, everything in the world is technically recyclable. You can collect coffee cups and hydro-pump them and recycle them. And they went on a tour to show recyclers this is how you do it, and the recyclers chose not to implement that partly because it would cost them more money than it’s worth. And that was the logic pattern that was then stated back to say these cups can be recycled. We showed people how to do it, they just chose not to implement. And I think this will be the same thing in 2025.

It’s going to be sort of pointing the finger at some part of the supply chain. It could be recyclers, it could be other aspects. I think a lot of it will be pointed towards recyclers saying we made our packaging recycle ready or designed for recycling, but the recyclers are choosing not to recycle it. Something along those lines is my prediction for what will happen. And I think it’s going to take almost all of 2025 to get that through the digestive system before people calm down and think about OK, how do we take a step forward to continue solving this very important challenge.

Lisa McTigue Pierce
Right, OK. I agree with everything that you’ve said, Tom, and thank you for sharing that because I think it will help companies prepare a little bit better for what’s going to happen and maybe be an incentive now for more partnerships, more collaboration. Because as you rightly identified, these goals that were set, a lot of times there are things outside of the companies’ control, and you have to work with other people and set up an infrastructure and all that. And that does take the entire, you know, the entire … anybody who’s involved in that.

Tom Szaky (Guest)
Well, I just want to add on that. One of the things that I, you know, that I saw in this unfold, the very first commitment made to now, in two or three years from now, when the commitments are due, the white elephant in the room was never discussed. You know, people started focusing mostly on how can I change my packaging slightly to make it more conducive to recycling. Right? Go … the most iconic example, go from multilayer film to monolayer film. That’s the most iconic of the examples. And then they talked about, how do we make investments in, or how do we encourage infrastructure, you know, to appear. Wonderful actors like Closed Loop fund and others, you know, who started, you know, acting in that and so on. But the white elephant in the room …

Lisa McTigue Pierce
Before you identify the white elephant in the room, can I kind of guess what it is?

Tom Szaky (Guest)
Yes. Please, absolutely. Go for it. Yes.

Lisa McTigue Pierce

Because of other conversations that we have had. Is it product consumption?

“There is no law anywhere in the world that says what you put in a recycling bin must be recycled.”

Tom Szaky (Guest)
Well, it’s both actually. So I was going to say … but you’re absolutely right, right? It’s … the white elephant in the room in this issue, it’s not about package design. It’s not about infrastructure. It’s about the underlying economics, right? So what I mean by this is, recyclers have no legal connection to the producers. They are not legally responsible to the producers. In fact, a recycler is not even legally responsible to recycle what’s in the blue bin or what’s in the recycling bin. What a recycler does is tell us here’s what I’d like to see in the blue bin. Then they take what you put in the blue bin and sort out what they actually want, and what they want is what they can make money at. There is no law anywhere in the world that says what you put in a recycling bin must be recycled.

Lisa McTigue Pierce
Which is why I believe that if the municipalities are not recycling enough or properly, or, you know, doing their due diligence, then we should find another way. Take it away from them.

Tom Szaky (Guest)
Yeah. And I think, look, the answer in this is we have to look at the economics, right? And what’s interesting in package design is, what’s the biggest megatrend in packaging is lightweighting, cost reduction is by far the biggest trend and has been since the dawn of packaging, right? Procurement’s number one goal: reduce cost per unit, and it’s fair. I get that, right? Now what happens is a recycler is looking for value. Right? They want to do the least amount of work to get the most amount of value out of the waste. So as packaging gets lighter it intrinsically becomes less desirable to recyclers.

Lisa McTigue Pierce
Yes.

Tom Szaky (Guest)
And so the biggest megatrend in packaging actually is equal to less things will be recycled. It undermines recyclability. So the only thing that … like what can companies do, really? It’s not about some funky R&D. I think it’s about … one option is you put value back into the package. You go from a pouch to a PET bottle. You go from a PET bottle to an aluminum can. You know, something like that. Now that will incur a cost per unit for every product produced because you will increase the price. Right? That’s one. That will certainly work.

Another is doing some form of taxation. The DRS, deposit return schemes, EPR, extended product responsibility, which somehow creates a money flow. Now what that does is it makes everything slightly better economically where what you will see is an aluminum can recycling. The rates will go through the roof, almost to 100% like in Germany, while in things that are not profitable to recycle the boost may not be enough to make it recycled at all. And just like in Germany a lot of … in the yellow bin there will still go to incineration because it still hasn’t tipped over to be profitable. And we’re seeing that come Oregon, Maine. Now other states are passing EPR.

But important to … silver bullet. It’ll … things that are profitable to recycle, and it may tip a few things over like polypropylene, and then everything else will probably have no effect. And then you can do voluntary responsibility. And mind you, in those it’s a tax on every product produced, right? So the first one, increasing value, is an investment into every item produced. EPR is a tax on every product produced.

Lisa McTigue Pierce
Produced or sold, Tom?

Tom Szaky (Guest)
Oh, it depends on the law. Very good question. It does depend on the country. Sometimes produced, sometimes sold. Depends on the country, and how is it administered. But if we assume everything produced is sold, then you can say those are synonyms for all intents and purposes. I know it’s not quite equal but for sake of conversation.

Then the third one, it’s like what TerraCycle does. We call voluntary responsibility, which is like take-back program, some form of collection where it’s a cost on every item that is actually collected.

“… infrastructure magically appears when there are good business equations for it to serve and magically disappears when there are poor business equations for it to serve.”

You have three choices now. They’re not independent. You can do all three, right? But those are net, net, the three choices. And why I say they’re the three choices is infrastructure magically appears when there are good business equations for it to serve and magically disappears when there are poor business equations for it to serve.

So it’s not about, I think, investing into infrastructure. It’s about creating the right flow of materials as the infrastructure appears, right? Like if there is, you know, a field that is … that it has really accessible, let’s say gold on it, you will build a factory to go get the gold. And if the field has very little gold, you’ll choose not to. Or once you’ve mined the gold, you’ll shutter the factory. So I think infrastructure is a reaction to a good business equation. And what we need to do — and this is the white elephant in the room — is it has to be enough value material to make it a good business equation. And that’s the key component to consider.

Lisa McTigue Pierce
OK, so we need to … the brands need to focus a little bit more on the end market for whatever recyclate, whatever packaging material they’re going to be generating as a recyclate.

“… focus on the profitability to the recycler because the recycler has the cost of collecting and sorting the waste. It has the cost of processing the waste.”

Tom Szaky (Guest)
Yes, and I’d say it’s focus on the profitability to the recycler because the recycler has the cost of collecting and sorting the waste. It has the cost of processing the waste. And it has to compare those costs against what the material, once it’s been recycled, can be sold for, the recycle it, and the more profitable that equation, the more recyclers will go chase it. The more they’re going to educate consumers to put it in the bin the more they’re going to focus on sorting it out, the more they’re going to do the work. And the less desirable it is, the more they’re not going to bother.

Lisa McTigue Pierce
So what’s going to be the … who’s going to get the brand owners and the recyclers aligned? How’s that going to happen?

Tom Szaky (Guest)
I think there are … It’s not one answer here. I think it’s … there are many actors that could do it, and I think many are leaning in. So let’s go through sort of the stakeholder groups and what the stakeholder groups can do.

In the world of lawmakers and legislation, there is some really exciting work happening. There is work in passing taxes like EPR, finally, finally coming to the United States. Oregon, Maine get the credit for being the first two, but I think you’re going to see this a lot in the more blue, wealthier states. It will come first. It should be a federal thing, but either way, let’s take it state by state. Sort of like how Canada’s provincial EPR. That’s going to help create some money flows to, again, make those equations easier to attain. So that’s good. Lawmakers are also passing more truth and labeling legislation, the biggest and most ambitious being SB 343 in the state of California. And what this is basically doing is elevating the way the word recyclable or the chasing arrow logo can be used.

Historically, the FTC [Federal Trade Commission] through the Green Guide has regulated that to be used, if there is access in the US, 60% or more access to say recycling material type like polypropylene, you can put the chasing arrow logo and say locally recyclable or just recyclable. With SB 343 in the state of California — and there’s now five to 10 states that are doing copycat legislation and not going to have different labeling in one state versus the other so it will de facto become federal — the state has to also agree that it will be recycled and this will mean that about a third to a half of products that used to have that today, the chasing arrow logo and the word recyclable, will no longer be able to carry that. The goal is this puts pressure on producers to shift from those package forms or polymer forms to the ones that are collected and recycled. So that’s what legislation can do.

Lisa McTigue Pierce
Right, Tom. Earlier you mentioned that the three different ways for collection, though, that chasing arrow law for California I’m assuming is at the municipality level, right? Like if you had a voluntary program, would it still qualify?

Tom Szaky (Guest)
That’s a very good question. And so staying in that one, what SB 343 focuses on is two things: One is defining that the chasing arrow logo and the word recyclable only be used in the context of municipal recycling. It is really making that the domain of municipal recycling.

Lisa McTigue Pierce
OK.

Tom Szaky (Guest)
Because the word recyclable, and I agree with them, I think it’s absolutely right … is a claim that consumers will assume means it’s municipally, you know, you can put in your blue bin and the chasing arrow logo is the same. You’ll no longer be able to use a PIC code, so you won’t be able to put the triangle chasing arrow logo with the number one or number two or number three in it on a package. That PIC code goes away. It will have to be a different shape, and those will be determined only for municipal recycling. And in this new definition of it has to have access of 60% or more.

And according to CalRecycle, must actually be collected and recycled. So material types that we very widely associate with the recyclability, like polypropylene, that will be a key question mark, noting CalRecycle still in the process opining on what it believes is recycled in the state and what it believes is not. Polystyrene is a great example that will certainly move to no longer be able to carry that mark.

Now, for programs that are not municipal recycling, like TerraCycle programs or many other take-back programs, what we would advise a brand owner if they use one of our programs is to say don’t use the word recyclable. Do not use the chasing arrow logo, but say something like “recycle through Terracycle,” or something along those lines, because that’s simply a statement of what you can do. It’s not making a claim that this package is recyclable municipally, and I think that’s the very, very important distinction to make. You can also, if you wish, strengthen that even more by saying underneath for sake of clarity, “do not put this in municipal recycling,” or something along those lines. And we see some brand owners do that where they say “not locally recyclable. Recycle with or recycle through TerraCycle.”

Lisa McTigue Pierce
OK, I wonder how this would affect the How2Recycle and How2Compost labels from the Sustainable Packaging Coalition.

Tom Szaky (Guest)
It 100% will have an effect because those labels use the chasing arrow logo, and they say recycle, and I believe the How2Recycle, you know, labeling will simply have to comply with the SB 343 legislation. There’s no question. And that means that some pack forms that may have had a recycle locally label through How2Recycle may now have … may not be able to carry that in that particular example.

And again, right now CalRecycle, the body that is deciding on what goes on the list and does not, is, you know, in careful consideration, doing meetings around this. And I believe at the end of this year, or sometime near the end of this year, will have their decisions. Or sorry, it could be into next year, my apologies. But it’ll have it rendered over this year or next year, and then it goes into effect in 2024.

Lisa McTigue Pierce
OK, wow, a lot going on. Some a little, I have to say, a little scary to me because of the wide-ranging implications and maybe some unintended consequences because of that.

Tom Szaky (Guest)
Yeah, and … so we went through, right, stakeholders, because they can do that. This is lawmakers.

Lisa McTigue Pierce
Oh, that’s right, the stakeholders …

Tom Szaky (Guest)
No worries. This is lawmakers. I think for the industry, especially for brand owners, it’s those three things we mentioned earlier.

• You can upgrade the value in the package, which will make it more locally recyclable. So a good example is moved from if you’re in a pouch, move to a carton. If you’re in a carton, move to a PET. If you’re a beverage, move to a PET bottle. If you’re a PET bottle, move to an aluminum can or glass. You know, go up. Now, that will increase your cost per every item produced.

• Or it will end, you know, be a part of EPR where it comes. Now you’re going to do that anyway because you have no choice. That’s going to be mandated. No one’s going to voluntarily pay an EPR bill if it doesn’t exist.

• And then the way you voluntarily do that is you set up your own programs. And those are the three, like, your own take-back programs.

“… the general answer on recyclability is simplify and increase value. … Those are the two things that make that item more desirable for recyclers.”

Those are the three things the brand owners can do. And the general answer on recyclability is simplify and increase value. Simplify means go from many materials to ideally one material. It means going from lots of colors and adornments to clear. It means going from labels that, like, attach on to direct printing or something.  It’s simplify in all ways and increase value. Go from cheap materials to more expensive materials, right? Those are the two things that make that item more desirable for recyclers.

Lisa McTigue Pierce
Right. OK. So does that lead us into the next stakeholder, the recycler?

Tom Szaky (Guest)
Well, so for the recycler, right, the ... I think the important thing for recyclers to do is they’re very good at talking to consumers and trying to sort of educate consumers. But I think there’s a real opportunity for recyclers to be very clear with producers about what they want, and the way to do this is to think about how to create, and there’s some nice coalitions of recyclers we’ve gotten together. But the more recyclers could talk with the voice and say this is what we want in our stream and this is what we don’t, because in the end, the recyclers make the decision on what is recycled or not. No one else does. It’s their decision.

Lisa McTigue Pierce
And when you say producers, you’re talking about the package manufacturers, not the brand owners.

Tom Szaky (Guest)
Both, because the … here is sort of the interesting thing as many times package manufacturers will talk about the technical capability of a package, right? They will talk about it will … good example is biodegradable, right? It will degrade, and it’s absolutely true. But what really needs to be asked is not what a package can do, but what the end-of-life manager will do. So good example in compostables is while compostable packaging will absolutely degrade, every claim you see is absolutely true, composters don’t want it.

Lisa McTigue Pierce
Right.

Tom Szaky (Guest)
Right? And that is really important to go to the actual end-of-life manager and they need to communicate what they want, and if … and in lieu of that people need to ask them, what is it that you want to see? Not what you could do because you get a false positive. But instead what will you do if this shows up? So why do composters not like compostable plastics is because within compostable plastics there’s a huge degree, from the worst out there — oxo-degradable, that’s probably the worst — to home compostable, the best.

But there’s a huge plethora of range out there, and then when consumers are putting this in the green waste, they also tend to put in things that are not degradable. And it’s so ridiculously expensive to take mixed food and yard waste that is sloppy and rotting and so on with all these plastics inside and sort out the plastics. And then from there subsort which are which. It’s much easier to sort them all out and dispose them, which is what tends to happen today.

Lisa McTigue Pierce
Yeah. Well, not only that but the compostable facilities, they’re selling a product at the end: compost. And they need it to be as high quality as possible. And compostable packaging really does not have . . . doesn’t contribute nutrients to their product that they sell; the compost.

Tom Szaky (Guest)
Exactly. Exactly right. And I think that’s … so this is the key point, right? It’s the asking the question not what can be done but what will be done. I mean I could take it as a joke. I could ask you today many “could you” questions, some pretty provocative ones where you would technically answer, yes, I could do something crazy. And you would absolutely not do it if I say, now, will you do it, right? And I think there’s this huge difference, and I see this a lot where producers are both packaging producers or brand owners, will bring in an excited recycler or composter and say, could you, you know, recycle this or compost this? And they’ll say, sure, I could. But they’re not asking the question of, OK now … watching and you’ve got to spend your own money, will you?

Lisa McTigue Pierce
Mm-hmm. Yes. OK. So we did the brand owners, the lawmakers, recyclers. Who else is in the chain?

“… there’s so much media out there about how recycling is broken or there’s some problem, right? And that undermines consumer motivation to take part in the system, and we need to make sure we don’t undermine consumers actually taking part, because you need a consumer to actually put something in the recycling bin for anything to be recycled.”

Tom Szaky (Guest)
So I would say the next one there is consumers, right? And consumers have the all-empowered vote, which is vote with your dollar for what you want and what you don’t want to see more of and participate in these programs, right? So consumers … without consumer participation no recycling occurs. So consumers must participate. And I really say this because there’s so much media out there about how recycling is broken or there’s some problem, right? And that undermines consumer motivation to take part in the system, and we need to make sure we don’t undermine consumers actually taking part, because you need a consumer to actually put something in the recycling bin for anything to be recycled. The consumer has that choice in the end, and if every package will go through a consumer’s hand and the consumer will choose, does it go in the trash bin or does it go in the recycling bin. And that’s … we have to be very conscious of that.

Please-recycle-Alamy-F7TWBW-web.jpg

And then the second is … so the message to consumers, please recycle. Please take part. Right? Even if your system isn’t perfect, use it, take … and then the second is feed the recyclers what they want vs. what they don’t want. So it’s almost the same as the producer, but the answer to the consumer is: buy the things that recyclers want and feed the waste stream that, and don’t buy the things that recyclers don’t want, right? Be, you know, feed the system what it needs.

Lisa McTigue Pierce
Right. Oh, that makes total sense. So, Tom, any other stakeholders in there that you want to talk about?

Tom Szaky (Guest)
Well, so you know, people would ask is like, you know, where do we keep, you know, the people who always get let off the hook are the packaging manufacturers or even the chemical companies and the oil companies.

So oil companies take the oil out of the ground, the chemical companies converted it and then … sorry, into a more advanced polymer and then the packaging companies convert the polymer into packaging. Those sort of three groups of folks. And I would say are … I would loop them in very similarly with the brand owners because in the end it’s the oil companies to the chemical companies to the packaging companies to the brand owners that create the package. The brand owner decides which version to use. But that’s all sort of one group with four heads on it, right? So similar answers.

 And then the only other group I think that we haven’t talked about yet are the retailers, and retailers have a really interesting opportunity to do, I think, two meaningful things.

[1.] First, they are the ultimate editor. You know, between the brand owner and the consumer, right? So they can choose out of all the products that are out there in the world which ones the consumers have access to.

Lisa McTigue Pierce
So when you’re talking retailers, you’re talking retailers and e-tailers. The ecommerce. OK, got it.

Tom Szaky (Guest)
Both. E-comm, brick-and-mortar, doesn’t matter. But in the end unless the brand is its own retailer, which is a DTC model, right? So the brand can be its own retailer.

Lisa McTigue Pierce
Direct to consumer [DTC].

Tom Szaky (Guest)
In most cases, the brand. Yeah, that’s right. The brand has to go through a retailer, and the retailer is a editor as a result. It’s a gate. And I think the bravest thing retailers can do, and I give a lot of credit to Tesco here, is edit to, you know, to make it easier for consumers to choose the right things and not choose the wrong things, or the wrong things aren’t even there.

So Tesco, for example, famously banned selling biodegradable packaging on its shelves as of 2009 of any product, period. Full stop. And it just said, we’re just not going to make this choice available. And I think retailers, the stronger they can make these decisions, the better, right? Amplify, give bigger display support to the things that are more circular, more recyclable. Ideally delete or de-amplify the ones that are less so. And it has that choice of what it puts on the shelf, where is it on the shelf, how much of it is on the shelf. All of those choices are in the unilateral control of the retailer. That’s one.

[2.] The second is retailers can also be a part of the infrastructure. They can be collection points for certain waste streams, and I think what’s important is we have a certain sort of feed, you know, like waste that can flow through the municipal setting. But there’s many waste streams that may not be appropriate there, but can absolutely flow through the retailer setting. I mean, plastic shopping bags are collected at a lot of retailers all the way to clothing is collected, not through municipal but through locations, from churches to Walmarts around the world.

Lisa McTigue Pierce
OK, a lot going on there. A lot of great ideas. I do have to ask because the vast majority of the packaging, the biggest markets for packaging, are food and beverage.

Tom Szaky (Guest)
Yes.

Lisa McTigue Pierce
And there’s, you know, a tiny little thing that they need that some other products might not need. And that’s called barrier. And we, you know, the people who are in the industry and learn about sustainability do learn that food waste is much worse of a problem than the packaging waste is. And so how do we solve this barrier problem, Tom, with sustainable materials?

Tom Szaky (Guest)
It’s a really, really good question. And I think there are multiple … it’s not one answer, right?

Lisa McTigue Pierce
Never is.

Tom Szaky (Guest)
Never, right? So I think there’s a lot of amazing innovation in unique barriers that may be edible. You know, like it’s spray-on type barrier or other forms of barriers, not just, say, a plastic wrap. So I think one is innovations in the concept of barriers. I think there edible packaging is a really interesting example that could be a part of the product or the fruit and vegetable.

Then the next area is how to make sure that we actually get good collection and recycling of existing barriers. From there it’s thinking more if we’re going to eliminate the barrier altogether, how to eliminate the wastage that occurs when the product expires over a shorter period of time.

Lisa McTigue Pierce
Yep.

Tom Szaky (Guest)
And I think these are the types of examples that we have to experiment with and think about. Again, it’s not one or the other or the other. All of the above can be leveraged in parallel. It’s all the way to exploring, redefining best buy dates. I mean, I was talking to many retailers where . . . like Carrefour, for example, recently in France was able to eliminate Best Buy dates on some products where, like, makes absolutely no sense to have one, but there is one. And let’s remember there is some irony behind things. The irony in Best Buy dates is that in many cases it’s more profitable to have Best Buy dates sooner than later because it moves the inventory through by this position. And so I think we also have to be aware of where there is an underlying profit motivation for something that is unsustainable.

Lisa McTigue Pierce
There is consumer psychology behind that. There’s also the, you know, retailer ownership, you know, who owns the product at the time that it expires, and, you know, so economics as you have identified.

Tom Szaky (Guest)
Economics and liability, right? In the US the food waste issue is very tied to liability of, you know, many restaurants don’t donate, you know, or supermarkets donate the unwanted food because they’re worried about whoever they donated to getting sick. So there is … economics and liability … liability is a derivative of economics, right? In the end you’re worried about a payout, in the concept of liability.

Lisa McTigue Pierce
Yeah. OK, Tom, thank you so much. This is fascinating, and I have two questions that I’m going to end with, and it’ll still be a strong ending. But, so big picture; packaging sustainability and the companies’ objectives. The reason for sustainability goals in general, not just packaging sustainability but sustainability goals in general, is because of climate change and saving the planet. If you want to look at, you know, let’s go as far out as we can and look at the big picture. So the objectives that companies have, whether they meet these goals by the date or not, how much of a difference are those goals going to have on that big picture?

Tom Szaky (Guest)
It’s a very good question. First, I would say, you know, as we look at this, you know, we are in a crisis from an environmental crisis altogether. All sorts of vectors are significantly challenged, you know, whether it’s animal diversity. I think we’ve lost half of our species diversity over the past 50-plus years. Whether it’s natural habitat through deforestation, encroachment, and so on. Then we have things like air quality, water quality, we have the waste crisis. We have all these different issues, and then at the top of it, climate change is the one that is the biggest of all, because it seems to have the most immediate threat on our existence. And of course we’re most concerned about ourselves, and then if we have the bandwidth we’re going to think about our fellow inhabitants, like plants and animals. But I think the biggest existential threat to us today is climate change. You know, will our home burn down? Will we have food on our table because of agriculture, so on and so forth.

So I think, why I say that is it’s important to acknowledge that we are in a … there’s like multiple major issues that are very different on environment that are all trending very negatively. And we are, right now, most of the oxygen in the room is going towards climate change.

Now all of these are connected, right? But it’s important to not say climate change is the only thing we have to solve for and then we’re good, right? And so a good example of this is in the world of, you know, we have … if you just compare two issues; the waste crisis and climate change. Yes, there is a Venn diagram overlap, and what I mean by that is recycling is significantly better from a greenhouse gas emission or GHG potential than disposal. Reuse is better than recycling from a climate change point of view than … you know, and so on. So that those, as you move up the waste hierarchy, you’re also doing more greenhouse gas reduction, right? You’re still producing greenhouse gas, but at a lesser rate than those other options.

But, for example, climate change will not, you know, when you measure climate change, mostly in GHG, you’re not going to then vector in, well, what about the negative effects of litter, the negative effects of extraction, that’s so on that also contributes to the waste issue. That’s why it’s important to sort of have room to look at both; climate change and then everything else.

But it is incredibly connected all in all and I think in this … and I think this is, you know, if there’s any big monster white elephant in all of this, it is what you said, right? All environmental issues in the world have one unifying starting point. It’s actually incredibly simple. We all do it, which is the act of buying things. And we individually are buying an order of magnitude more goods than we did 100 years ago on every vector. Number of socks in our drawers, the amount of meat we consume. I mean, you name it; it has exploded at a minimum of an order of magnitude. And there’s many things that we buy a lot of today that we never even bought 100 years ago, right? Tons of things. The headphones in our ears, just to name one simple example, right? Never even existed. So it’s multiplied from a zero base.

Lisa McTigue Pierce
Right.

Tom Szaky (Guest)
I don’t think whether the object is, you know, this disposable or recyclable or reusable or you name it, that there’s any object that has no impact. And so what we have to really think about, and it’s so tremendously difficult for business to do this, is we have to reduce consumption.

It’s incredibly difficult to do that individually because our whole culture is built on status equals consumption. You know, volume of consumption equals our status. Happiness comes from shopping, all these things. We have to think with that as individuals and we have to also think about that as, truly, it’s the only answer as you think about sustainability and business. It doesn’t matter how circular or whatever we become. Even reuse has impact. And so … and that’s a really difficult, you know, thing, and it’s what very few people spend any time talking about because it’s very uncomfortable in the context of making money.

Lisa McTigue Pierce
So bottom line, you do think that packaging, recycling, and lowering consumption is going to make a difference with climate change?

Tom Szaky (Guest)
Yeah. Yes, my apologies. Yes.

Lisa McTigue Pierce
No, no, no, that’s fine. Just, you know, I know it’s kind of like a big complex question that, again, sort of has an easy answer that’s not easy. Kind of like can you recycle this? Yes, but will you? Yeah. OK. So last question, Tom, and thank you so much for your time. So after 2025, what’s next for the brands as it relates very specifically to packaging sustainability, and then why? Why those?

“My recommendation to a brand owner is … honor that you tried, right? Focus on the … great effort that was done, even if you didn’t meet 100% of the goals. Honor that internally, especially internally, because you don’t want people to lose motivation and give up. Honor it internally and try to tell that story externally.”

Tom Szaky (Guest)
I think as I said there, you know, 2025 is going to be a tumultuous, turbulent year. And my recommendation, you know, to a brand owner is … honor that you tried, right? Focus on, you know, on the effort. The great effort that was done, even if you didn’t meet 100% of the goals. Right? Honor that internally, especially internally, because you don’t want people to lose motivation and give up. Honor it internally and try to tell that story externally.

Try to avoid pointing fingers and being like, oh, you know, had, you know, the chemical industry produced major chemical recycling infrastructure, had the recycling industry done this, or whatever. Had our industry of pet food producers or cosmetic brand producers or whatever it may be … Had that happened, don’t … finger outward. Instead point it inward and say OK, this is what we accomplished: We accomplished 80% of our goals, which means we didn’t accomplish 20%, but we put in a major effort. We really tried, and celebrate that internally and communicate it externally, first and foremost, to make the turbulence as little as possible. And trust me it will be the most-easy thing to say: Let me point the finger and say it was someone else’s responsibility of why it didn’t happen.

“My big worry is that there’ll be a lot of finger-pointing, and people will say ‘Forget this’ and give up, and that would be catastrophic.”

Then regroup and really think about how to continue that phenomenal effort, right? If you’re a brand owner and moved from multi-materials to mono-materials that is a phenomenal thing you did. That is really good, even if in the country where you deployed it, it didn’t make a difference on whether that material is recycled that is a huge improvement that should be honored, and don’t stop there. Think about how to continue this journey and keep pushing. And I think if the effort continues, and it’s been now 10 years since most people have signed on to this pledge and can continue forward, we have I think a very optimistic future. My big worry is that there’ll be a lot of finger-pointing, and people will say ‘Forget this’ and give up, and that would be catastrophic.

Lisa McTigue Pierce
I agree. Catastrophic and kind of minimize all the developments and all the advancements that we’ve lived through already from there. So, yeah. Tom, thank you. As always, in talking with you, you’ve given me a lot more to think about. And so the good news about that is after I do … after some of these ideas germinate a little bit, you know I’m going to be coming back to you.

Tom Szaky (Guest)
Well, I look forward to that conversation, absolutely.

Lisa McTigue Pierce
OK. Thanks so much, Tom, appreciate your time. Bye.

Tom Szaky (Guest)
Thank you as well. Have a good afternoon. Bye. Thank you.

About the Author(s)

Lisa McTigue Pierce

Executive Editor, Packaging Digest

Lisa McTigue Pierce is Executive Editor of Packaging Digest. She’s been a packaging media journalist since 1982 and tracks emerging trends, new technologies, and best practices across a spectrum of markets for the publication’s global community. Reach her at [email protected] or 630-272-1774.

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