Retail Observer

RETAILOBSERVER.COM FEBRUARY 2015 50 Brian Dick Guest Columnist Brian Dick, CEO Quest Resource Management Group www.questrmg.com. AT THE END OF THE PRODUCT LIFECYCLE, WHO IS RESPONSIBLE? R etailers today are at a tipping point. There is an increased demand for corporations to be good stewards of the environment, not just from consumers but from regulators as well. In 2013 alone, nine product stewardship laws were passed with more legislation in the works. Aimed at manufacturers, many of these efforts are either inadequate, inefficient or simply cost prohibitive. And it is only a matter of time before legislation is geared toward retailers. In the meantime, retailers have an opportunity to fill the void, develop an effective stewardship program, and potentially even turn it into a profitable venture. MANUFACTURERS' ATTEMPTS Product stewardship programs put the accountability on the manufacturer to ensure products are properly recycled. But many manufacturers don't have the infrastructure to efficiently collect products at the end of their life-cycles. • Manufacturers lack direct access to consumers: Convenience is one of the biggest motivators in persuading consumers to responsibly care for a product at the end of its use. But manufacturers don't have a direct line to consumers. Some may have mail-back programs, but these are expensive and difficult to operate. • Current solution limited to forming associations with non-profits to work with local government: For example, to operate paint stewardship programs on behalf of paint manufacturers, the American Coatings Association, a trade association, created a program in states that passed paint stewardship laws. The program costs in excess of $3.7 million to operate, yet a recovery fee charged to the consumer at the time of purchase only covers 15 percent of the program. Not only is the program expensive to operate, but it's filled with inefficiencies. PLAGUED WITH INEFFICIENCIES Beyond such programs being cost-prohibitive, they often have poor or marginal recovery rates. To cite one example, in the case of one state's paint recovery initiative, the program only recovers 8% of the paint volume sold and has recycling costs more than twice as high as what would be considered an economically feasible rate. MUNICIPALITIES OPTION Local municipalities are the logical platform to collect products at the end of the lifecycle. However, the current infrastructure to collect waste material is simply not up to the task of collecting the volume of waste produced by consumers. On average, only 31 percent of a city's population has access to household hazardous waste recycling. In addition, limited tax revenues and municipalities' budgets are threatening existing waste recycling programs. SOLUTION: RETAILERS With a reach into local communities, retailers are in a unique position to be part of the solution. By leveraging both retailers' direct access to consumers and their established logistics and supply-chains between manufacturers and stores, retailers have the means necessary to collect waste material cost-effectively. RO

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