As we continue to move forward and improve as an industry, keeping tabs on trends and changes will help recyclers of all sizes succeed in the decades to come.
By Perry Moss
Here is a little-known fact about the waste industry. The world’s first landfill on record goes all the way back to 3000 B.C. Jump forward to 2000 B.C. and China developed a method for recycling bronze to extend its useful life. So, it is pretty safe to say that the management of waste and even recycling, have been around nearly as long since the beginnings of civilization.
While my tenure in the industry does not go back quite so far, I have seen quite a bit of change since my first foray into the world of waste in the 1980s. In fact, the 1990s saw a dramatic increase in recycling tonnages, which continue to this day. It is incredible the amount of change that has occurred in just the past two decades when you consider our long history of waste and recycling.
By taking a look back at the major trends that have taken hold over the past 30 years, waste providers can anticipate future industry shifts and plan for the next 30 years.
Trend #1
Then: Recycling was limited and financially driven.
Now: Recycling is booming due largely to environmental concerns.
There is significantly more recycling activity today than 30 years ago. Companies, organizations and residents alike—everyone seems to be recycling. This increase in recycling activity can be attributed not only to an increase in the number of recyclers, but also to the number of recycling types. Thirty years ago, the majority of recycled material was paper and scrap metal. Cardboard and post-industrial waste comprised most recycling activity, along with some small volumes of plastic and glass. Today, we are seeing a dramatic increase in material type, and it expands almost daily. We still recycle all types of paper, but now we are able to recycle many grades of plastic, all sorts of metals, e-waste, organics and food waste, cooking oil, tires … you name it, and we can likely recycle it.
Our motivators for recycling have shifted almost as swiftly as our tonnages and types. In the 1990s, companies recycled primarily for economic reasons. Decision makers were much more concerned with rebates and revenue streams than protecting our land, air and actual streams. Recycling still makes good business sense today, but companies are more motivated by the environmental impact.
In just the past five years or so, these previously isolated motivators have begun to work in lockstep. Younger generations are more motivated to do business with companies they believe have a positive social mission. With this growing consumer base, companies increasingly want to serve that buyer mindset. Environmental and economic drivers are no longer mutually exclusive, but rather work together to help make a business case for recycling.
Industry Impact
The increase in recycling volume has created new opportunities for many waste hauling and recycling companies. After all, more recycling means there is even more material to haul and process. Many waste/recycling businesses have been able to expand their services and grow their companies. Even landfill-owning businesses have bought into the recycling trend by purchasing recycling assets in hopes of having some influence over the decreased volume heading to the landfill.
This trend shows no signs of slowing down any time soon. Even in the face of import restrictions and pricing slumps, consumer demands and burgeoning domestic destinations continue to create opportunities for recyclers. Good quality recyclables continue to have stable end markets. Frankly, I have personally seen conditions much worse than we are experiencing today.
A huge challenge in the industry will continue to be getting ‘clean’ material to recycle—material that is free of contaminants like product residue, food waste and chemicals. Keeping non-recyclable items like polystyrene, food scraps and other contaminants out of single streams will also be critical and can lead to improved recycling solutions. Unfortunately, the large landfill companies have seized upon this market development to enhance revenue through contamination charges to their commercial customers, or to send more material to landfill.
Trend #2
Then: Many more companies provided recycling services.
Now: While recycling volume is up, the number of waste providers is down.
Though recycling volume is up today, there were many more small or independent companies involved in recycling 30 years ago. The industry
has experienced significant consolidation since then. In order to improve profits, larger companies began to buy up recycling assets in order to try and better manage market capacity and improve their bottom line. In such an asset-heavy industry, expenses can make it difficult for independent haulers and facilities to grow on their own.
Some small to medium sized businesses merged together in order to become large regional or national providers who could achieve much greater efficiency at scale. In fact, large publicly traded companies made up only a third of the industry in the 1990s, and today comprise nearly 60 percent.
Another reason for this consolidation trend ties directly back into recycling volume. To compete and succeed in an increasingly recycling-friendly world, many waste providers, especially landfill-owning companies, have acquired material recycling facilities to try and keep influence over the materials that once went to their landfills.
Industry Impact
Though some expect consolidation to continue, new players in the waste industry indicate otherwise and are taking a radically different approach. One company in particular is using technology as the underpinning of how to change the waste and recycling category, allowing for smarter solutions that tie back to a mission of sustainability, and moving customers of all sizes away from landfills and into recycling.
We are seeing new entrepreneurs pop up in the industry as people seek innovative solutions to our world’s waste problem. Unlike traditional second- or third-generation recyclers, there are young “outsider” entrepreneurs with this type of thinking that will dramatically reshape the industry with new ways to solve environmental problems.
With access to negotiated pricing typically reserved for large companies, smaller businesses are able to service their local communities with pricing that rivals their national competitors.
Trend #3
Then: Recycling was an opaque and technology-light process.
Now: Technology has improved recycling efficiency and industry transparency.
The waste and recycling industry is one of the last frontiers of major industry that has not jumped full speed into new technology adoption. In just the last few years, advanced technology has finally arrived and it is changing the game for recyclers.
Thirty years ago, waste and recycling providers would send out drivers for their daily recycling route with no visibility into service performance. Were the trucks following their route? Were they speeding? Was the service completed? There was no access whatsoever. Today, geotracking technology enables us to see exactly where every truck is at any given moment. We know when a service has been completed, and we can even tell how full a container is to optimize pickup schedules. We can adjust routes to reduce miles and emissions. Thanks to emerging technology, the industry has experienced dramatic improvements to business efficiency, customer service and even safety.
Just like waste providers themselves, technology has improved transparency among customers as well. With access to metrics and data, customers can clearly see the cost of their service, which materials are being diverted, as well as the environmental impact of their recycling program.
Industry Impact
Expect the industry’s technology adoption rate to increase exponentially. The benefits are twofold. Not only does data improve business decision-making, but consumers are also demanding access to technology and insights today. To win new business and retain customers, waste providers must embrace transparency.
Those companies who adopt new technologies and measurement tools will be empowered to increase efficiency and grow their businesses. Those who are resistant to change risk falling behind.
The recycling industry has come so far in the past 30 years, and the future is bright. To succeed in the years ahead, an innovation mindset is crucial. As consumer demand for recycling continues to increase, it will become even more important to find creative solutions for waste. Find destinations for a range of materials in your area, from traditional recycling facilities to unique startups. Embrace technology to improve efficiencies, deliver better service to your customers and stay ahead in our rapidly evolving industry.
For an industry that remained stagnant for so long, we have experienced a great deal of change over the past 30 years. As we continue to move forward and improve as an industry, keeping tabs on trends and changes will help recyclers of all sizes succeed in the decades to come.
Perry Moss is a Co-Founder and serves as chief advisor for Rubicon Global (Atlanta, GA), a technology company founded in the waste and recycling industry with a mission to end waste. He has been involved in the recycling industry for more than 30 years. Perry can be reached at [email protected].