Friday, January 27, 2023
Homebusiness newsBeyond recycling: This Philadelphia company wants retailers to reuse food, drug boxes

Beyond recycling: This Philadelphia company wants retailers to reuse food, drug boxes

Groceries and pharmacies run on acres of folded, corrugated cardboard. Food, drink and drug makers use truckloads of boxes to move their products to store shelves. When they’re done, it’s off to the recycler, the landfill, or the incinerator.

Philadelphia-based American Box & Recycling Co. is pushing an alternative approach. “Instead of baling them for the [recycling] market at $35 a ton, companies like us will pay between $100 and $200 a ton” for once-used, suitable boxes, then sell and deliver box loads to new users, through American Box’s Impact Recycling Services unit, said Brandon Spradlin, a packaging industry veteran who was named chief executive last year.

When this works, it means higher payments to manufacturers, lower costs for the next round of box users, less waste, and bigger profits for the company that puts the deals together.

Buyers include off-price retailers such as Philadelphia-based Rick Forman’s Turn7 stores, which sprang up during the pandemic to sell trailer-loads of unwanted merchandise sold cheap by Amazon, Walmart and other shippers. American Box is also approaching liquidators, wholesalers and “reverse logistics” companies that handle customer returns, Spradlin said.

The company currently has 80 buyers for used boxes, including four of the largest U.S. off-brand retailers. “And we pick up other materials,” Spradlin added, gesturing to skids loaded with plastic straps during a recent tour of the worksite. It takes 300 trailers to handle the volume at sites including Tipp City, Ohio; New Kensington, Pa., near Pittsburgh; and the company’s largest, block-long plant at its headquarters on West Luzerne Street in Philadelphia’s Hunting Park section, where about 60 workers are based, some of whom walk to work from the surrounding rowhouse neighborhood.

Spradlin estimates that American Box clients have collected $27 million in recent years from “landfill diversion” resales of boxes and other materials, such as plastics, straps, metal tabs and pallets. Sales of “once-used” boxes rose during the pandemic and have remained higher than before.

“The once-used box program they created for us has helped us contribute to our sustainability goals, and created a recurring revenue stream,” giving more than 115,000 of his company’s boxes “a second life,” said Deepak Sreedharala, director of operations at Raritan Pharmaceuticals in East Brunswick, N.J.

“We’re showing them how we could give them better revenue by stacking their boxes up and letting us take them for resale,” said Art Sanders, who now manages American Box’s Tipp City site, where he started as a laborer when it opened in 2018.

To zero waste

American Box & Recycling Co. was founded in 1956 to handle cardboard for the original Tastykake bakery and other North Philly industries, where warehouses, scrappers and auto-repair shops are now more common than factories.

Owner Stuart Parmet in 2003 moved the business to the Luzerne Avenue site, a former Philadelphia Transportation Co. trolley barn across the street from Little Flower Catholic High School for Girls, from the partly city-owned Philadelphia Industrial Development Corp., for $50,000, and sold it to Main Line Equity Partners, an Ardmore private-equity investor, for $5 million in 2018, according to city records.

“Zero-waste offerings” including re-used boxes and other materials from the American Box plant are “a natural evolution for the business,” along with industry certification, “full waste-stream management, and sustainability consulting,” said Chris Randazzo, founder and managing partner of Main Line, which buys companies with revenues of less than $20 million.

Price swings

The familiar practice of recycling — collecting boxes at a shredder and forming the fibers into new boxes — faces sharp and rapid prices swings that can make it tough to forecast costs and revenues.

“Corrugated recycled paper” — brown box cardboard, the kind Amazon and UPS leave at your door, with waved layers reinforcing flat sides — hit its highest price in at least 15 years (adjusted for inflation) during the pandemic shutdowns of 2021, as delivery services swelled with increased demand.

But prices then collapsed to nearly the lowest prices on record in late 2022, as stores reopened, according to Bureau of Labor Statistics data.

Low prices can leave municipal recyclers, shippers and factories with mountains of cardboard they can’t easily sell. There are similar overloads of unsellable plastic waste and other scraps, which can end up in landfills or incinerators, defeating waste managers’ goals.

Spradlin says the used-box trade is “insulated” from the worst of those price swings. “When OCC [‘old corrugated containers’] prices are at a low, it gives us tremendous ability to go into an organization and offer a much higher price for the boxes than a recycler could pay, because we have buyers who want them as is,” without the expense of recycling, says Spradlin.

“Reuse is where we all want to go, but I’m not seeing much yet. I think it’s going to take time,” said Tony Sciarrotta, who runs the Reverse Logistics Association, an Atlanta-based group for merchants who buy and sell deep-discount goods.

Certified

Main Line’s acquisition of American Box Co. hasn’t been completely smooth. A group of Main Line investor clients filed a complaint in Philadelphia last year, accusing the buyer of reselling American Box property to Main Line insiders for less than its value. Spradlin says the company is confident it will prevail in that dispute. Lawyers for the plaintiffs had no comment.

A firm acquired in 2020 to offer shredded cardboard bedding for farm animals and pets has been shut down because it didn’t “fit” the company’s main focus, said Spradlin.

One of American Box Co.’s latest hires is Troy Brown, who started last month as a sustainability solution adviser, whose duties include helping clients qualify for landfill- and incinerator-avoiding TRUE (total resource use and efficiency) certification from the U.S. Green Building Council, which also certifies buildings.

“We help them take steps to becoming zero waste” producers, without landfilling or incinerating packaging, said Brown, a Michigan native and “passionate” outdoorsman. Brown earned a 2017 degree in sustainability and economics in the first such four-year class at Xavier University in Cincinnati, then worked for Sonoco Recycling, a branch of the nation’s largest packaging company, and RoadRunner, a Pittsburgh recycler, before joining Impact.

Brown says the supply of and demand for used boxes has grown steadily despite the gyrations in recycled-materials prices. “I’m very excited to be working with people who’ve been doing this for decades,” added Brown. “We’re only going to grow.”

___ ©2023 The Philadelphia Inquirer, LLC. Visit at inquirer.com. Distributed by Tribune Content Agency, LLC.

This story was originally published January 16, 2023 9:27 PM.

Source link

RELATED ARTICLES

LEAVE A REPLY

Please enter your comment!
Please enter your name here

LATEST

CATEGORIES

Most Popular