Terra Cycle upcycling and what garbage really costs to recycle.

There is an interesting article on TerraCycle approach presenting their partnership with MARS to upcycle candy wrappers into everyday eco-green-recycled products sold through mainstream retailing. It is always a good way for consumers to “vote with their dollars” by buying recycled products. However the journalist makes an argument about TerraCycles’s strategy to sell products like bags at low prices because their raw material costs are low. This argument is flawed and contributes to myths and misconceptions about recycled products.

Upcycled and recycled products are costlier to manufacture than products using “new material” for the following reasons:

1. Collection infrastructure is often non existent. TerraCycle collects discarded and unused food-item wrapping material through partners(Kraft) or with incentive programs at schools. There is a cost associated with collecting, transporting, sorting and cleaning such material(soiled candy wrappers!). This cost should be factored into manufacturing.

2. Recyclable Material processing: candy wrappers and other small packaging pieces need to be assembled together to make sheets for cutting and sewing bags, pencil cases etc. any recyclable material require processing(sorting, cleaning, cutting) for preparation to manufacture products. This is not required when you use new material in rolls for example. Furthermore, a seamstress in China is paid $0.20 PER HOUR while the going rate in North America can be as high as $0.20 PER MINUTE with benefits. The labor cost component in making recycled products is usually higher since bags and accessories made from recycled materials should “logically” be made in North America.(Would you ship candy wrappers to China to make cheap YET Recycled bags to sell to US consumers?).

We have been designing and marketing bags and accessories made from recycled textiles for six years using Cirque du Soleil tent materials, advertising billboards or old sails from the Americas Cup. We chose to manufacture in Canada because we felt it would have been environmentally counter-productive to ship our recyclable material to China, Pakistan or India to save on labour while incurring environmental costs(carbon from shipping, handling, toxic products used to “clean” our material).

There is no such thing as a Zero raw material cost because “it’s garbage”. The labor costs are often a greater component of the total product costs. We must remember that recycled products have an environmental benefit that should be “sold” to consumers (reduction in material sent to landfills generating green-house gases, better use of resources).

The “Recycled Product Premium” in price often times reflects higher costs and is not a way for green product marketers to increase their margins! There is a cost to saving the environment and telling consumers that buying green costs the same for some product categories is misleading.