Don’t Get Trashed — Is Recycling Discarded Mail Profitable? — Part II

In our previous post of “Marketing Sustainably,” we introduced an expert discussion on whether or not recycling collection of discarded mail, catalogs, printed communications and paper packaging is profitable, and why this matters is an important business consideration for the direct marketing field. In this post, we continue and conclude the discussion with our two experts, Monica Garvey, director of sustainability, Verso Paper, and Meta Brophy, director of procurement operations, Consumer Reports.

In our previous post of “Marketing Sustainably,we introduced an expert discussion on whether or not recycling collection of discarded mail, catalogs, printed communications and paper packaging is profitable, and why this matters is an important business consideration for the direct marketing field.

In this post, we continue and conclude the discussion with our two experts, Monica Garvey, director of sustainability, Verso Paper, and Meta Brophy, director of procurement operations, Consumer Reports. The conversation is based on a Town Square presentation that took place at the Direct Marketing Association’s recent DMA2012 annual conference.

Chet Dalzell: If much of the recovered fiber goes overseas, what’s the benefit to my company or organization in supporting recycling in North America?

Monica Garvey: The benefit—companies can promote that they support the use of recycled paper because they believe that recovered fiber is a valuable resource that can supplement virgin fiber. Recycling extends the life of a valuable natural resource, and contributes to a company’s socially responsible positioning. While it’s true that the less fiber supply there is locally, the higher the cost for the products made from that recovered fiber domestically, it’s still important to encourage recycling collection. Because recovered fiber is a global commodity, it is subject to demand-and-supply price fluctuations. If demand should drop overseas, and prices moderate, there may be greater supply at more moderate prices here at home, helping North American manufacturers; however, this is very unlikely. RISI, the leading information provider for the global forest products industry, projects that over the next five years, world recovered paper demand will continue to grow aggressively from fiber-poor regions such as China and India. Demand will run up against limited supply of recovered paper in the U.S. and other parts of the developed world and create a growing shortage of recovered paper worldwide.

CD: Is there a way to guarantee that recovered fiber stays at home (in the United States, for example)?

Meta Brophy: Yes! Special partnerships and programs exist that collect paper at local facilities and use the fiber domestically, allocating the recovered paper for specific use. ReMag, for example, is a private firm that places kiosks at local collection points—retailers, supermarket chains—where consumers can drop their catalogs, magazines and other papers and receive discounts, coupons and retailer promotions in exchange. These collections ensure a quality supply of recovered fiber for specific manufacturing uses. It’s a win-win for all stakeholders involved.

I recommend mailers use the DMA “Recycle Please” logo and participate in programs such as ReMag to encourage more consumers to recycle, and to increase the convenience and ease of recycling.

CD: What’s the harm of landfilling discarded paper—there’s plenty of landfill space out there, right?

MG: Landfill costs vary significantly around the country—depending on hauling distances, and the costs involved in operating landfills. In addition, there are also environmental costs. By diverting usable fiber from landfills, we not only extend the useful life of a valuable raw material, but also reduce greenhouse gas emissions (methane) that result when landfilled paper products degrade over time. There are also greenhouse gases that are released from hauling post-consumer waste. While carbon emissions may not yet be assessed, taxed or regulated in the United States, many national and global brands already participate in strategies to calculate and reduce their carbon emissions, and their corporate owners may participate in carbon trading regimes.

CD: You’ve brought up regulation, Monica. I’ve heard of “Extended Producer Responsibility” (EPR) legislation. Does EPR extend to direct marketers in any way?

MG: EPR refers to policy intended to shift responsibility for the end-of-life of products and/or packaging from the municipality to the manufacturer/brand owner. It can be expressed at a state level via specific product legislation, framework legislation, governor’s directive, or a solid waste management plan. EPR has begun to appear in proposals at the state level in the United States. EPR, for better or worse, recognizes that there are costs associated with waste management on all levels—not just landfilling, but waste-to-energy, recycling collection and even reuse.

These waste management costs currently are paid for in our taxes, but governments are looking to divert such costs so that they are paid for by those who actually make and use scrutinized products. Thus EPR can result in increased costs, were states to enact such regulation on particular products such as paper, packaging and electronic and computer equipment. Greatest pressure to enact EPR most likely focuses on products where end-of-life disposition involves hazardous materials where recycling and return programs may make only a negligible difference. Many will state that the natural fibers in paper along with the extremely high recovery rate of 67 percent makes paper a poor choice for inclusion in any state EPR legislation. That is also why the more we support the efficiency and effectiveness of existing recycling collection programs, the less pressure there may be to enact EPR regulations directly. It will likely vary state to state where specific concerns and challenges may exist.

CD: Does the public really care if this material gets recycled? Do they participate in recycling programs?

MB: Yes, they do. Even a public that’s skeptical of “greenwashing”—environmental claims that are suspect, unsubstantiated or less than credible—participates in recycling collection in greater numbers. Both EPA and American Forest & Paper Association data tell us the amount of paper collected is now well more than half of total paper produced, and still growing—despite the recent recession and continued economic uncertainty. Recycling collection programs at the hometown level are politically popular, too—people like to take actions that they believe can make a difference. And as long as the costs of landfilling exceed the costs or possible revenue gain of recycling, it’s good for the taxpayer, too.

CD: At the end of the day, what’s in recycling for my brand, and the direct marketing business overall?

MB: I see at least three direct benefits—and nearly no downside. First, a brand’s image benefits when it embraces social responsibility as an objective. Second, being a responsible steward of natural resources, and promoting environmental performance in a way that avoids running afoul of the Federal Trade Commission’s new Green Guides environmental claims—positions a brand well in practice and public perception. And, third, and I see this firsthand in my own organization, both the employee base and the supply chain are more deeply engaged and motivated as a result, too. Certainly, in the direct marketing business overall, there are similar gains—and I’m excited that the DMA has embraced this goal for our marketing discipline.

Inside the Recycling Tub: Catalogs & Direct Mail, Post-Consumer

The year was 1990. Earth Day turned 20 years old. The darling book that year was 50 Simple Things You Can Do to Save the Earth. Its author’s top recommendation was “Stop Junk Mail.” The book was a “cultural phenomena,” as one reviewer recalled, selling more than 5 million copies in all.

The year was 1990. Earth Day turned 20 years old. The darling book that year was 50 Simple Things You Can Do to Save the Earth. Its author’s top recommendation was “Stop Junk Mail.” The book was a “cultural phenomena,” as one reviewer recalled, selling more than 5 million copies in all.

During the early 1990s, millions of consumers wrote their request to the then-Mail Preference Service (MPS, now DMAchoice) to remove themselves from national mailing lists, partially as a result of the media hype around that publication and its recommendation to consumers to sign up for MPS. Even some cities and towns urged their citizens (with taxpayer money) to get off mailing lists. I don’t think the Direct Marketing Association released publicly its MPS consumer registration figures, but it swelled to the point where some saturation mailers nearly considered not using the file for fear it would disqualify them for the lowest postage within certain ZIP Codes where new MPS registrants were concentrated. (DMA developed a saturation mailer format at the time to preserve MPS utility.)

Removing names from a mailing list is what solid waste management professionals call “source reduction”—an act that prevents the production of mail (and later waste) in the first place.

One of the reasons “junk mail” met with some consumer hostility then was simply because once you were done with a catalog or mail piece, wanted or not, there was no place to put it except in the trash. It seemed to many, “All this waste!” (that actually amounted to about 2.3 percent of the municipal solid waste stream back then).

Thankfully, there were other marketplace and public policy dynamics tied to support of the green movement, circa 1990. In a word, “recycling” (like source reduction) was seen as a part of responsible solid waste management. At the time, North American paper mills were scrambling to get recovered fiber to manufacture paper products and packaging with recycled content. Some states (and the federal government) set minimum recycled-content and “post-consumer” recycled-content percentage requirements for the paper they procured, while California mandated diversion goals for solid waste from its landfills. Increasingly, foreign trading partners were clamoring for America’s discarded paper to meet their ravenous demands for fiber. The cumulative results were an aggressive increase in the amount of paper collected for recycling and the number of collection points across the United States.

All this boded well for catalogs and direct mail, as far as their collection rates. Catalogs and magazines are considered equivalent when it comes to their fiber makeup. They do tend to have more hardwood (short, thinner fibers) versus softwood (long, strong fibers) since the hardwood gives a nice, smooth printing surface. When they are collected for recycling, recovered catalogs and magazines are suitable for lower quality paper/packaging grades, as well as for tissue. Some of the fiber does wind up getting used as post-consumer waste in new magazines and catalogs, but producers of such papers much prefer having recovered office paper (ideally not mixed with other lower-quality post-consumer papers) as their source of post-consumer content, as the quality is better for making higher quality magazine/catalog papers. (See link below from Verso Paper.)

Most direct mail when recovered is classified as mixed papers, and is suitable for tissue, packaging and other recovered-fiber products. (Today, a lot of paper recovery mixes it all together, and with positive reuse.) By 2007, DMA had received permission from the Federal Trade Commission to begin allowing mailers to place “recyclable” messages and seals on catalogs and mail pieces (roughly 60 percent of U.S. households must have access to local recycling options before “recyclable” labels can be used). Upon this FTC opinion, DMA promptly launched its “Recycle Please” logo program. By 2010, in addition, thousands of U.S. post offices were placing “Read-Respond-Recycle” collection bins for mixed paper in their lobbies.

When the U.S. Environmental Protection Agency began tracking “Standard Mail” in its biennial Municipal Solid Waste Characterization Report in 1990, the recovery rate (through recycling collection) was near 5 percent. By 2009 (the most current year reported), the recovery rate had increased more than 10-fold to 63 percent—but I cite this figure with a big asterisk. There will be a discussion in a future post on why the EPA MSW recycling data may not be as accurate (and as optimistic) as these findings seem to present. In fact, the EPA itself has asked for public comment on how its current MSW study methodology can be improved—again, more on that in another post.

While I’m not an expert on solid waste reporting, I certainly can see the positive direction underway here, no matter what the actual recovery rate may be. The more catalogs and direct mail that are recovered for their fiber, chances are that there will be more efficient use of that fiber in the supply chain, rather than ending up in a landfill. That helps relieve pressure on paper and packaging pricing, which is good for our bottom lines.

It might also, just a little bit, make a consumer think to herself “I love my junk mail”—as she takes the no-longer-needed mail at week’s or season’s end and places it into a recycling tub. Recycling makes us feel good. It is simple to do. Recycling may not truly save the Earth, but it certainly does extend the life of an importantly renewable natural resource, wood fiber.

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