Recycling can be traced back to as early as 400 BC, and through generations, systems have evolved to become better, more efficient and, now, revenue producing. The impact of technology on our industry is palpable. Those with commercially ready solutions are poised to reap the benefits as revenue opportunities continue to emerge.

One man’s trash is another man’s treasure—an old saying that has never rang more true in the world of retail than now. Each year, $11.5 billion worth of recyclable products are thrown into landfills, 70 percent of which are recoverable plastic materials that are worth more than $8 billion to those with the technology to recover and repurpose such materials.

One of the most significant sources of recyclable plastic materials are the waste streams of retailers across the country, filled to the brim with returned products that can be recovered, broken down and molded into new items to be sold on the shelves of those same stores that threw them out in the first place.

Now, a growing number of retailers with limited understanding of operations and supply chain management are seeking technologies and processes to capitalize upon this market potential, converting their own plastic waste into dollars while also filling their shelves with products made of recycled materials.

Opportunity for Waste Management

When you consider that there are more than 10,400 retail outlets made up of Walmarts, Home Depots, Lowes and Targets combined in the U.S., the opportunity for companies with commercial solutions available that are committed to tackling this major issue by implementing integrated technology and innovative product formulations to reduce waste becomes even clearer.

These companies dive straight into the waste streams from big box retailers to recover plastics from many sources—Adirondack chairs, shelving, rubber totes, baby swimming pools, coolers, TVs, and more—and collect them by the truckload for reclamation, with most including every type of plastic imaginable. These materials are purchased from the retailer and brought in from consolidation centers across the country for processing.

The plastics are segregated out into different types, and are then ground down in order to identify the raw materials that make up its composition. Those raw materials are then blended into a custom formula and run through a production line to produce resin—high polymer, high density, low flow, etc.—based on customer demand before being shipped off to molding companies.

It is here that the revenue stream begins for the waste vendor, as they are able to sell the resins outright to molders and distribution companies who will produce white labeled products that are then sold to retailers for resale, or they fill orders directly with the retailer for a specified product, like garbage cans or office chairs.

A study from 20151 reported that 84 percent of consumers around the globe would seek out “responsible” products wherever possible, but many also found the lack of availability of those products as a barrier to not purchasing more. Consumers’ understanding of social responsibility continues to grow, which will put pressure on retailers to supply products that are considered to be environmentally friendly. As such, waste vendors can expect rapid growth within the recycled products industry in the immediate future.

Opportunity for Retailers

In terms of logistics, most retailers generally only concern themselves with what is happening on the forward side, moving high volumes of product through the shelves and into the hands of the consumers. This of course is how they generate their revenue. In recent years, however, more and more retailers have begun to focus on reverse logistics, as they attempt to gain as much value as possible from any good that was sold and then returned to them, minimizing both waste and monetary loss.

While many returned products do go back to the original vendor for credit, products branded to the retailer that are deemed unsellable are generally just thrown into the trash, leaving the retailer with a loss. By partnering with a third party vendor with expertise in materials recycling, retailers can recoup some of those losses they otherwise would have to accept, and add revenue back to their bottom line.

Some big box retailers receive enough customer returns to generate hundreds of thousands of pounds of recyclable plastics a month. By using a network of consolidation centers and aligning with a third party vendor specializing in plastics reclamation, a significant revenue opportunity exists for the retailer. While also possible for smaller retailers to use these practices, they likely will face the challenge of not having a central consolidation center, making the effort logistically inefficient.

Another benefit to retailers is the “green” factor. As mentioned previously, growing consumer demand for sustainable and socially responsible products has skyrocketed, as more than 50 percent of global consumers are now willing to pay more for products from socially and environmentally responsible companies. This allows the retailer to prosper in two ways—first, by marketing itself as an environmentally friendly company, and, second, by then offering items made from recycled products for sale on their shelves. Retailers have to follow the trends of its consumers to survive, so we can expect to see more offerings of environmentally friendly products in the future.

Industry Innovation Continues

Like any industry, there is a need for evolution and change. In today’s world, we rely in the innovation of new technologies to bring that change, and to improve upon the systems that already exist. Recycling can be traced back as early as 400 BC, and through generations, systems have evolved to become better, more efficient and, now, revenue producing. The impact of technology on our industry is palpable—we have grown from simply reusing one item in a completely different way to actually turning one thing into another usable thing—and those with commercially ready solutions are poised to reap the benefits as revenue opportunities continue to emerge.

Randy May is the Chairman and CEO of Ecoark Holdings, Inc., a provider of a growing suite of proprietary technologies and services that drive sustainability and facilitate sustainable growth for a wide range of companies. Under Randy’s leadership, Ecoark has completed three strategic acquisitions since 2012, including the recent acquisition of Sable Polymer Solutions, which strengthened the company’s recycled products business. Randy is a 25-year retail and supply-chain veteran with extensive experience in marketing, operational and executive roles. He can be reached at [email protected].

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