2. Ryan Smith on the logistics of the circular economy

Audio Transcript:

Garr Punnett (00:16)

Hey, everybody, welcome back to the Multi-usiverse podcast. My name is Garr Punnett. I’m the chief of staff and lead circular economist at Rheaply. Today we were joined by Ryan Smith, the CEO and founder of Recyclops. And we got to have a great conversation about all of the impacts that he is doing in both his rural and urban markets. In recycling, we got to cover a lot of ground, so I hope you get to enjoy all the 45 minutes of what we recorded about how we did a deep dive into some of the logistics, the geographies, the pain points, the opportunities when it comes to everything that involves facilitating circular economic movement of materials, whether that’s plastics, aluminums, diapers or even glass. Yes, I said diapers. So I look forward to you joining and we’re going to head right in now on this podcast.

Garr Punnett (01:11)

Ryan, thank you for joining me. I’m so excited to have you. We are joined by Ryan Smith, the CEO of Recyclops, a good friend. At this point, we can talk about how we met probably a little bit, but we’ve been able to keep in touch, but just someone I love talking to because you’re so passionate about the industry. I’d love to hear what is Recyclops do? What are you leading? What are you growing? Give the audience the little bit of spiel here of what you all are pursuing.

Ryan Smith (01:40)

Well, first off, I’m glad we’re able to talk, and it’s always a pleasure. I feel like I’ve done a number of podcasts, but it’s never with a friend. So it’s fun to sit here and be able to talk to you guys. Yeah. So Recyclops, we are a circular economy logistics company. If I really had to kind of dive in and describe what we do. In two words, it would be sustainability, accessibility. We’re all about access. And as you look at access, one of the things that we really are kind of starting point is recycling. I kind of look at recycling as the gateway drug to sustainability. It’s easy. Everyone can do it and get you thinking about sustainability and circular economies. And it’s really a starting point. And so that’s where we start. Although we’re already expanding beyond that. And I hope we can continue to expand much more beyond recycling. But really looking at kind of the accessibility issue when it comes to sustainability and particularly recycling, I would kind of split the market into two underserved categories. You have what I would say is geographically underserved, and that’s going to be places that don’t have access to recycling because of where they are and this is going to be apartments. I would lump into that. That it’s kind of I don’t know if geographic is necessarily the right word. It’s kind of type.

Garr Punnett (03:11)

Well, you can talk about the markets, too, of what you serve, which I’m sure is next. So geographic does play a significant part in this.

Ryan Smith (03:19)

Yeah, significant part. And so you have apartments. You have about 16 million apartments in the US that don’t have recycling pickups available to them. Maybe they can go drop it off at a park or something like that. But their apartment complex where they live doesn’t have an option for them. And that means that very few people in that apartment complex are going to actually recycle.

Garr Punnett (03:41)

What I love about that is and again, we haven’t quite talk about geography. But even in Chicago, which is an urban market, there’s a significant in the tens of percentages of apartments in which the landlords haven’t opted into recycling, even when it’s a law, it’s an ordinance. And so this is even mandated.

Ryan Smith (04:05)

Yeah, exactly. Chicago is one of my favorite case studies.

Garr Punnett (04:10)

It is. Yes.

Ryan Smith (04:12)

There’s a website that we’ve probably spoken about in the past car, that’s mybuildingdosenrecycle.com. And it’s where people are self reporting that their building doesn’t recycle. In Chicago, where it’s a law. And if you look at it, it’s like a whole map. The whole map is just pins and

Garr Punnett (04:28)

Yay, my favorite city. Yes.

Ryan Smith (04:32)

Dang it. But it’s a difficult problem. And just mandating passing a law saying, oh, you have to do this now. It doesn’t suddenly make it happen because there are real challenges there. The other side of that is you have so that’s, like, high density urban, you have this big problem. And then kind of the polar opposite of that is where the other side of the problem is on this geographic side. And that is the outskirts of urban centers and getting into more rural environments. And that’s an even bigger problem where we set up apartments. I said it’s about 16 million households, which is a big number. It’s more than about 60% of apartments in the US. So kind of wild. And then we have on the other side, we have these outskirts of urban centers getting into more rural. That’s about 34 million households. And on the outskirts of every urban center, it happens. And sometimes it takes a little bit. You have to get a little bit further out to see it. Sometimes it’s right there close, but it’s big. I mean, you have the 34 million single family homes, the 16 million apartment homes. Suddenly we’re talking 50 million households, 38% of homes in the US. I still have to double check that data every six months. That’s too big. That’s too many. It’s like, no, that’s real life.

Garr Punnett (05:54)

And I think that’s what’s amazing about what you all are doing. The industry in general is we’ve all, to some extent, varying levels, grown up with recycling. So we just assumed that, oh, this was happening everywhere. Everyone has access. This is natural duh. And it’s not the case. And I think that’s what’s exciting about our industry circular economy in general is now we’re really understanding. Okay, well, what are the barriers now? So when we talk about this addressable market in front of you what have been the barriers to recycling access in some of these markets? And then also, I’d love for you to speak a little bit about, and I hope this isn’t too controversial, but maybe the prejudice almost or the bias that somehow rural markets aren’t accepting of recycling or aren’t somehow politically. It’s not connected when that really isn’t the case.

Ryan Smith (06:58)

Yes. Super fascinating. I love talking about this concept because it’s surprising to so many people that you look at where first kind of understanding, why do rural markets not have recycling people’s go to is because they don’t care and they think like, oh, it’s just a bunch of Hicks or whatever, and it’s just not real life. That’s not how this works. You look at why places. One of my favorite examples is Beaumont, Texas, deep South, South Eastern Texas, right up close to the Louisiana border. And Beaumont is 2 hours from Houston. And that is significant because Beaumont has a couple of hundred thousand people, the county overall, it’s actually a pretty well populated area. Several hundred thousand people, not that far from a major Metro, but recycling as a whole. It’s a business that is economies. You need economies of scale. You need truckloads full of compacted material, which means you need £40,000 of water bottles. That means you need a water bottle doesn’t weigh a pound. You need hundreds of thousands of water bottles and that’s to get a full truck loads, you can economically transport it to the right recycle.

Garr Punnett (08:27)

Can you quickly break down for those that maybe aren’t familiar with that process of aggregation or even consolidation, what it takes for you all to make that happen and how the logistics works.

Ryan Smith (08:38)

Yeah. So there’s what are called material recovery facilities. They call it MRF. Or Murph is what it’s usually called. You have Murphs. And these are basically big sorting facilities, and they’re crazy. They’re just like tons of robotics. They’re super advanced. They’re mind blowing. And like, I know I’m based in Salt Lake. Waste Management just built a $26 million facility in Salt Lake. And that is how your recycling goes. There gets on all these conveyor belts. And there’s human sorting and robotic sorting that is pulling out and separating materials and recycling needs. In order to turn paper into paper, you need to separate it from the plastic. Being said, there’s different types of plastics. You need to separate those out from each other. And that’s what these facilities are. You sort this out, you bail them up in these big bundles. If you drive behind a Walmart, you’ll see what a bail of cardboard looks like. Every Walmart has a bail sitting there.

Garr Punnett (09:33)

People probably have seen it all the time and not even realized that it’s like a commodity, like it’s literally a commodity sitting there on the corner that yes.

Ryan Smith (09:41)

Yes, that you don’t see there, but I see them everywhere. Now that my eyes have been down.

Garr Punnett (09:44)

You can’t unsee it. Now you’ll see it, everyone.

Ryan Smith (09:47)

That’s exactly right. And so you need economies of scale to make this work, because like I said, you have that $26 million facility, and you really need a lot of in order to make sorting economical, you need to do a lot of sorting. You need a lot of material. And guess where there’s a lot of material urban centers. Guess where there is less material, not urban centers. Right. And the further you get from an urban center, the harder it gets because the recycling infrastructure, the facilities to handle the processing, the Mercks that’s all going to be in the urban centers. It’s in Houston, 2 hours away from Beaumont. So in order for Beaumont to succeed in recycling, they need to get their recycling from Beaumont to Houston. And that’s hard when you have a $300,000 garbage truck where you’re paying someone 20 something dollars an hour to drive it. It’s extremely mechanical. Lots of chances for things to break on that machine. But even if it doesn’t break, even if everything goes smoothly, you’re sending someone to drive 2 hours. They go and drive 4 hours on or out. Get some recycling in the truck. They then drive 2 hours to Houston. They have to wait at the facility to dump, do all that takes about half an hour and then 2 hours back. They spent four and a half hours of an eight hour day not picking up recycling, and it doesn’t work. The economics don’t work. It makes so that recycling in Beaumont is impossible now has recycling.

Garr Punnett (11:16)

Is that an abandonment of a previous recycling program, or is it the result of a recycling program never actually being in Beaumont.

Ryan Smith (11:25)

So Beaumont is an interesting one because Beaumont actually had its own mirth. Of course, Beaumont had its own waste management owned it, and they couldn’t support it. There wasn’t enough recycling in the market to support the Murph, and so waste management shut it down. We operate in a lot of markets that used to have recycling. Beaumont is a unique one because it actually had its own Murph. Most markets we operate in, that’s not the case, but they had some level of recycling, and they had the Murph. They had everything. But then it went away because they couldn’t make it economically work. And so that’s a big challenge. And Beaumont is not unique. There are cities just like Beaumont everywhere, and they don’t have. Now there’s hundreds of thousands of residents there, many of which want to recycle. And one of the things that going back to kind of what you were asking earlier, one of the things that’s most interesting for me is that people are passionate about this and that they care. And we’ve had people say things like, I never have been able to recycle before, but I’ve always wanted to. And that concept blows my mind. It’s like, man, I understand someone who lives somewhere that had recycling and they’re like, oh, I miss it. But they’ve never even had access if they want to.

Garr Punnett (12:46)

Yes. I think I love hearing that because so often the narrative can kind of become burdensome that recycling is somehow a problem, but that in so many of the markets that you’re addressing, it’s become aspirational and it’s become doing their part for their community and doing it in a way where it’s so locally impactful that it’s of value.

Ryan Smith (13:08)

Yeah. And it is locally impactful. These are some of the most beautiful parts of the country. Do you think they don’t care? Of course they care. Of course they care. And they want. And recycling is there are things out there that have been politicized. Recycling has not been, for the most part, recycling is like, doesn’t matter if you’re red or blue, you probably care about recycling. You probably think it’s the right thing to do. And that’s what we’ve seen that people across the board we’re picking up from people who have Trump flags and people are buying flags.

Garr Punnett (13:42)

Yeah. And I think that’s important to really understand, and frankly, the undergirding of sustainability in general, which is that the economics of it play just as an important role as the social and environmental aspects. And that when we’re viewing this industry in terms of dollar signs, that’s the future, the future is actually understanding that the revenue can be driven, we can actually benefit the community. We can drive jobs, we can drive growth in some of these communities by understanding what our future looks like in this market. And to that point, what would a recycling infrastructure of the 21st century look like, in your opinion?

Ryan Smith (14:28)

Yeah. I’m obviously biased.

Garr Punnett (14:32)

Yes, of course.

Ryan Smith (14:34)

But one of the big pieces about recycling that’s a challenge is there are so many different materials and it makes recycling so difficult. And so as I look at recycling, one of the things that I see as the future is actually may sound crazy to say, but less recycling. And what I see is more reuse. So going back to the milkman and saying, hey, why are we buying a plastic bottle and then throwing that in landfill and buying a new plastic bottle and throwing that in landfill and buying a new plastic bottle when we could have someone pick that up, we already have the garbage man is coming to your house and picking this up. Like, Why is he not taking this to a facility to clean it and refill it and do that instead of taking it to a place where we literally bury it in the ground? Like, what? That doesn’t make any sense. What a waste, because that’s what it is. It’s a waste.

Garr Punnett (15:38)

And in that I think you’re exactly right. And I think what we’ve been driving on Rheaply’s end is always really pushing the boundary of what is cost spent on an item or resource that is of a diminishing return. So something that depreciates versus then how do you rethink the service revenue? How do you rethink someone investing in an object, investing in a resource, but having that be serviced in some way to keep it at its highest life cycle. And I think in that respect, something as simple as a glass bottle can actually serve a household and can actually drive again revenue growth because you’re building relationships then with households.

Ryan Smith (16:25)

Yeah, definitely. And the amazing thing is that it pencils, like when you look at the economics of it, the dollar bills like there’s a business model here. And that’s what’s fascinating as I look at that, the other thing that I look at with kind of the future is having a kind of broadening of the way things are serviced. Looking at just this big mechanical garbage truck coming and doing everything, it’s hard to fit that into the circular economy. We’ve tried to do it by having more advanced sorting and more of this. And that’s great. That’s really cool. But I don’t think that that’s our only answer. I think that shifting how we think about things and how we service things is a piece of that puzzle, and that’s what we’re doing.

Garr Punnett (17:22)

I think I want to hear more about that, too, and we can drill down into the model, but really quickly in that answer of what the 21st century model looks like, then we’ve got things on Rheaply’s end that seem like they’re sort of out of our scope, like we can’t control them. I think you mentioned one of them in terms of material choices. Actually, one of the questions I had for you was around. Are we ever going to see a future in which we are reducing the amount of materials that we use in consumer products and that may or may not happen. Can you or do you know of or have you thought about other things other sort of externalities? Is it policies? Is it some sort of community actions that are out of your control? But that would really make the case for you all that would make your life easier to make recycling happen for these communities. Is there anything that jumps out to you?

Ryan Smith (18:15)

Yeah. I mean, extended producer responsibility jumps right to the top where you suddenly. And as I think about extended producer responsibility, it’s the concept for those who aren’t familiar. It’s the concept of Coca Cola, for example, having responsibility for the bottle after you purchase it, they created a piece of plastic that can’t be reused, and that is going to end up more often than not in the landfill, unfortunately. And they have responsibility for that. And they have responsibility to make sure that that has the best life possible. I think extended producer responsibility EPR is going to have a big play, a big role in expanding recycling access, because it’s like Coca Cola or whoever it is, can do all they want. But when 38% of homes in the US don’t even have access. It’s not that they’re choosing not to it they don’t have access. You can’t get recycling rates up to where they need to be and or reuse your rates or whatever it is. I think that EPR is a big piece. And as I think about EPR, sometimes people think like, oh, it’s government stepping in and doing this. But I think back about the early extended producer responsibility that we saw in the United States, and that is I think about our waterways. Big chemical companies dumping pollutants into waterways.

Garr Punnett (19:51)

Are you speaking about sort of the building an identity building? I’m trying to sort of remember what terminology is used, but having the river system or the waterways be protected in that way by building an identity around them.

Ryan Smith (20:06)

Yeah. Well, I’m really talking about the fact that businesses were treating public land and like it was theirs. They were benefiting from public land at a cost to society. And that’s what’s happening now. It’s that same thing with landfills. They’re benefiting from public landfills. These big CPG companies are benefiting from public landfills that are paid for by my tax dollars. And they’re benefiting from that by creating products that have to go there. And it’s like that that’s what they were doing when they were dumping water in our Rivers or dumping chemicals in our Rivers. And none of us maybe back then there were people like, no, at least businesses alone. But that seems insane.

Garr Punnett (21:00)

Yes, exactly.

Ryan Smith (21:01)

Like, no, the businesses should not do that. That’s public. And that’s what’s happening now. It’s just happening, not with chemicals in a liquid form. It’s happening with chemicals that have been turned into plastic.

Garr Punnett (21:11)

And I think to your point here, it’s also happening just as much as we might be fighting a battle in water and land. It’s also happening in our air. And to that point, from an emission standpoint, it’s air emissions. You can’t avoid it anymore. And this is where we need to actually get real. So with that, actually, you segue somehow miraculously into the next question I had, which was really focused on how are we going to bridge the consumer recycling gap from CPG’s, consumer packaged goods companies like PG or a Unilever that output significant amounts of plastic? What are your crazy but realistic goals here on connecting those dots and making them realize or making the economics work in their favor, where they would join someone like you and actually make a more efficient system in which an extended producer responsibility could be driven on a private perspective, not necessarily a public. Have you thought or put any sort of attention to that?

Ryan Smith (22:20)

Yeah, I thought and had conversations around that, which is exciting because it shows to me that brands are willing to have these conversations, and they’re interested in having these conversations. And I can’t talk about all of it because of NDAs and whatnot. But it’s real. But let’s just think of an example here. That kind of illustrates how this makes sense for a brand. We’ve mentioned Coca Cola a few times. I think Cocapacola has a lot of opportunity to do good in the world. And I think Coca Cola has real aspirations to do good in the world. One of the things I realized is that these companies are made of people who care

Garr Punnett (23:05)

100%.

Ryan Smith (23:06)

And that’s an impact.

Garr Punnett (23:08)

We can villainize a company, but it’s like, no, these are people and they’re trying their best. They’re working the way they can in the system.

Ryan Smith (23:15)

Yes, that’s exactly right. And the system that they kind of walked into wasn’t necessarily in their favor, but they’re trying to make changes there. But let’s think about my wife loves Diet Coke. I don’t understand aspartame though she loves Diet Coke.

Garr Punnett (23:33)

You like that good natural sugar.

Ryan Smith (23:36)

That’s exactly right. Or at least I took my score through.

Garr Punnett (23:39)

Okay. Yes.

Ryan Smith (23:43)

But imagine a world where instead of my wife going to the store and choosing, should I get Coke or should I get Pepsi, which is a real thing. I think I have both Diet Coke and Diet Pepsi in my home right now.

Garr Punnett (23:57)

That is a crazy concept. But yeah, go ahead.

Ryan Smith (24:00)

But I know, but imagine that my wife instead had a subscription to Diet Coke. And every week or every whatever. Yeah, probably week, we get a crate of Diet Coke glass bottles delivered to our doorstep. And in exchange, I’m putting out the glass bottles that we’ve used, or she’s putting out the glass bottles that we’ve used. And they are taking those away and washing them and refilling them. Coke suddenly has a subscription. Recurring subscription revenue is the best.

Garr Punnett (24:39)

That’s gold. That’s gold it is.

Ryan Smith (24:42)

And so guess who wins here. Coca Cola wins here. Guess who wins here. The consumer wins here the Earth wins here. Everybody wins there. And that’s a situation where suddenly it’s like, oh, we don’t have this world where it’s like CocaCola has to make sacrifices to do the right thing. It’s like, no, CocaCola has an opportunity to do the right thing. And that opportunity is not just like, feel goods. That opportunity is dollar bills. And that’s how I look at this. Sometimes we think about, oh, we have to make sacrifices. We have to do these different things. Yeah, there are situations where that’s true. But pretty often there are ways to turn our sustainability challenges into opportunities. And that’s one simple example where very simple concept, but makes a lot of sense.

Garr Punnett (25:39)

We’ve got the same thing on our end. We’re dealing with. I’m saying this in air quotes for anybody’s listening, but higher quality type of resources are good. So things that might be found around your office or your built environment for perspective. But the same thing can be applied in building in that relationship that an original manufacturer has with the product that they’re putting into the world. That by connecting them to some sort of subscription revenue, connecting them to some sort of recurring revenue in that way will not only drive further building of that relationship that you have to the consumer, but then provides every opportunity for the upsell you get to grow each of your consumers as an account in ways that previously have been battled on the shelves of supermarkets and in ways that result in having Diet Pepsi and Diet Coke in the same refrigerator. I think that’s the real fun part. I love hearing that you’re having some of these conversations. So in all of this, then we’re talking about this sort of subscription revenue. It could involve glass. It could involve aluminum. Who knows what material it might? Why is glass so hard and yet so easy to recycle? What’s up with that?

Ryan Smith (27:06)

It’s a tricky one. And the real trick with glass is that glass breaks. And when glass breaks, a couple of things happen. One is dangerous, right? Broken glass. My child, my daughter broke a glass bottle the other day, and it’s like you grabbed them. And it’s like, get out of here. Now you need to stay away because glass is dangerous, but it’s dangerous to workers. It’s dangerous in that sense. At the same time, imagine a cardboard box. You have a garbage truck that comes. There’s a glass bottle in this garbage truck, and there’s a cardboard box. This garbage truck, the garbage truck, then compacts. I say garbage truck. But recycling truck, the recycling truck, then compacts. Guess what? The glass bottle breaks, and it gets shattered and all these little glass shards get embedded in the cardboard box. Well, I’ve got news for you that cardboard box is now trash. And so is the glass. And that’s a huge challenge. And then on top of that, if the glass does make it to a Murph and where it can be recycled, it is very abrasive. And one of the things that glass is actually often recycled into is like sandpaper and abrasion materials. And it’s because it’s really good at that. And it is going to wear down equipment significantly faster than if you have a facility that doesn’t accept glass. So there are facilities all over the country that used to accept glass that are now saying uh-uh.

Garr Punnett (28:40)

Just from a depreciation standpoint. They’re like, we’re good.

Ryan Smith (28:45)

That’s exactly. This is higher liability for people picking this on a short line, and it’s just wearing down our equipment. And so you have that combined with the contamination factor and the fact that it breaks into these little small pieces that are hard to handle and all of that, it just makes glass tough. Now, if you can actually get it to a facility, class is an easy one to recycle. It’s highly recyclable. We found that recyclers. We have a subscription for standard recycling, and we always keep got glass separate glasses, its own subscription. Someone has to pay a little extra for it. But we do it. So we keep glass separate. And not every household has a lot of glass. And so for those that have a lot, they pay a couple of extra Bucks and they put their glass. We have all of our recyclings and bags. They put it in a thicker bag so it’s more protected. And then we skip any of the cross contamination step. We keep it separate, and we drop it off at a facility that accepts glass, often a completely different facility from where we drop everything else. And that enables us to make glass recycling happen in places where otherwise isn’t happening. I mentioned at the beginning that we kind of had two underserved markets. We go after the Geographic, which we’ve talked a lot about. And then we have the materials. And these are materials that are understood materials that markets don’t recycle. So that’s going to be soft plastics or multilayered plastics. And basically any market in many markets, it’s going to be things like glass, like Recyclops operates a glass only recycling program in Nashville, Tennessee. Or it could be weird things. Like we do a diaper composting program in partnership with a company called Diaper D-Y-P-E-R. They make these bamboo based diapers that use significantly less plastic. I guess the average normal diaper has as much plastic as two plastic water bottles. It’s crazy. It’s so crazy. They set out to make a more sustainable diaper, saying, hey, cloth diaper brings the best, but guess what? A lot of people give up on it. So let’s create a good alternative. And in conjunction with that, they said, hey, we don’t want these to just go rotten a landfill, even if it’s better than plastic. Let’s create a composting program. They reached out to us and said, hey, could you do pickup of these? And we said, yeah, let’s do it. And so it’s like, okay, I wouldn’t think like materials like materials that people don’t have access to recycled diapers. Well, that’s a big thing. We’re launching that in DC and Raleigh and Baltimore this week doing diaper pick up?

Garr Punnett (31:20)

Yes. I think that speaks to again, establishing the relationship with the consumer and parents probably being a very dedicated consumer base. And new parents who are especially thinking more environmentally conscious of thinking, okay, I can do this small thing that will make me throwing away two diapers a day? Like, how many diapers are we like a lot, right?

Ryan Smith (31:45)

I think it’s cute that you said two diapers a day.

Garr Punnett (31:48)

That shows that I’m not a parent!

Ryan Smith (31:51)

Especially newborns. They’re going to deal 10-15 diapers a day.

Garr Punnett (31:54)

Oh.

Ryan Smith (31:55)

It can be crazy.

Garr Punnett (31:57)

Okay. Okay.

Ryan Smith (31:58)

Some parents are more diaper gets wet, I’m changing it. Some parents are like exploding.

Garr Punnett (32:06)

I love that. I had no idea how many diapers. So I think on that again. I swear I did not share any of these questions with Ryan today, but he’s segueing right into the next question, which is establishing successful partnerships. How do you do that? What sort of tips do you have on establishing either private private partnerships? So you are talking to a brand like Diaper, a larger CPG company, or a public private partnership, which you also all specialize in as well, in maintaining all of the considerations that some public entity, like a small city, might be looking for a town while also balancing all of your economic and sort of environmental priorities.

Ryan Smith (32:55)

Yeah. So I think it all comes down, whether it’s public, private or private private. Really, the big thing that it comes down to is just aligning incentives and making sure that we’re aligned. So I look about like when we work with the city just to take a step back. I haven’t even mentioned how we actually work, and I think I’m going to give it.

Garr Punnett (33:18)

Let’s use that time now.

Ryan Smith (33:19)

Yes. Brief explanation. Just because I think it gives context in how we work with municipalities. We use a gig economy, peer to peer approach to bring recycling to communities. So in the same way that you can call an Uber to your house and have them come where you have DoorDash deliver or you get shipped to deliver your groceries. And they’re all using random local people drivers in your community. We use that same type of model. We hire local independent contractors who go and pick up the recycling. All the recycling is bagged, and that enables us so that anyone in any vehicle can pick it up. We do keep large cardboard flattened and kind of put to the side, but it enables us to anyone in any vehicle can pick up the recycling. And that has enabled us to go to places the garbage trucks can’t reach and pick up different streams of materials at the same time, we can pick up glass and mixed up at the same time. They’re in two different bags and separate that the bags act as a barrier for cross contamination. It keeps loads cleaner our average contamination rate. So the amount of material that we get that ends up in a landfill is 5% to 8%. Municipalities will see anywhere from 18% to 40%. So we see significantly cleaner recycling by doing it the way we do it. Yeah.

Garr Punnett (34:36)

I don’t think people really probably understand the impressive percentage that is.

Ryan Smith (34:40)

Yeah. I’m super proud of it.

Garr Punnett (34:47)

Yeah. Can you give context and maybe real quickly on how you all communicate that to the consumer? Because I think there’s a little bit of effort there on saying, hey, this is why we collect in the way we do. And this is the benefit. I mean, what have you all put into that?

Ryan Smith (35:02)

Yeah. So we really try and drive that home because one of the things that has been kind of a thorn in our side, and I hate that it is that we use plastic bags to do pickups and plastic bags are the enemy. And I avoid plastic bags like the plague, all of that. We did some pretty significant analysis and saying, hey, what’s the impact of using reusable bags? What if we use paper bags? What if we looked at all the things and as it came down to it, the lowest carbon footprint, the lowest environmental impact that we could have was using single use plastic bags, the thinnest that we could possibly use and have them still be strong and good bags. And that was the lowest impact we could go and use. We’ve talked like, what if we use reusable bags? It looks better in the consumer’s eyes. I just can’t do it. It’s greenwashing. Yeah, it’s doing something because it looks better to someone, not because it’s a better thing. And it may feel like single use plastic bags. I don’t love it, but I’ve done the analysis. It’s the best option for this, at least the best option we found to date. And so consumers, we can really communicate about why we’re doing it the way we do it. Why are we using independent contractor drivers we talked about, hey, it lowers our emissions per household CO2 emissions per household by five to seven times. We’re meant to five to seven X less CO2 per household than a garbage. That’s pretty impressive. We’re doing about 40 X less road damage, and roads are very carbon intensive to go down. And we’re keeping the recycling significantly cleaner. By having these barriers, we’re able to educate consumers better because we’re picking things up manually. We’re able to see problems, take a picture and immediately report that to a consumer and say, hey, we noticed you put this in your recycling and we ask that you don’t and all of those things really make a big impact.

Garr Punnett (37:07)

And I think that’s again, highlighting building the relationship with the consumer and educating them. And as the industry, frankly, has not been doing or the industry that we inherited probably was all about dumbing it down for the consumer. And that is not what I think we actually need to do. And what many consumers these days are asking for, which is to be educated, to be knowledgeable, to be conscious of their action. You mentioned the bags again. You mentioned, sort of again, the local communities. Are you comfortable talking about the bags and the partnership that you have? I think, because that plays right into the private, private relationship as well as the public relationship.

Ryan Smith (37:49)

For sure. I’m actually so funny. Gm really like the CEO, essentially of GLAAD bags, which is owned by Clorox, filled out a form on our website and was like, hey, I want to talk. And I was like, okay, cool. We use plastic bags. We’re using another manufacturer to make bags. And they reached out to me, we want to talk. And I wasn’t really sure what to think about that. But as we talked, we built this relationship with Clorox. And as I thought about this relationship, I had to really think about, hey, is this the big bad Wolf? And as I thought a lot about that, the way that we thought about is that, hey, Clorox is trying to do better. And one of the ways they’re trying to do better is by being connected, being involved with their Recyclops and helping enable what we do and helping enhance what we do. And that’s cool and good on them. And if I want to make big changes in the world, the best way for me to do that is to not shun these big companies because, oh, no shame on you to work together, like, big players help make big changes, and we want to enable them to make big changes. We want them to enable us to make big changes in the industry. And so Clorox actually invested in Recyclops. We raised a seed round of funding last year in March of this year, and they participated to help lead that seed round in funding. And we have a close partnership with them and their brands. And we’re working on all sorts of cool projects with them. And they have Clorox owns all these random brands that you wouldn’t think they own, like Hidden Valley Ranch Down, a Kitty litter brand, like all sorts of stuff. And started with Glad bags. First thing we did is we shifted. We developed special bags with Glad that use less plastic, almost half the plastic we were previously using, but are just as strong or stronger than our previous bags by using their technology. And that was a pretty exciting change for us. And it’s fun like to have this partnership make immediate impact. And that’s just scratching the surface. There’s so much opportunity for us to work together with them and them, leveraging their relationships with retailers and different stuff to enable us to expand and to enhance our impact. And you look at that going back to what we’re talking about. Aligning incentives, their incentives are aligned with ours. They want to do good in the world. And they kind of look at like, hey, we’re a little bit behind. We need to make some big moves, some pretty aggressive moves to catch up and get ahead and let’s make a bet on a startup. And that’s what they’ve done.

Garr Punnett (40:56)

I think that’s incredible, because again, and I’m just reiterating it one more time. It’s all about deepening the relationship, deepening the commitment and deepening the impact that any brand can have on the community that they serve through their product. And they’re doing that through you all, which I think is fantastic.

Ryan Smith (41:22)

No one is paying me, but they…

Garr Punnett (41:25)

Technically, they are.

Ryan Smith (41:26)

I guess so. That’s funny. No. But they have been an incredible partner. Yeah. I think there’s a lot of more that we can do together, and I hope that we do do together. But it’s been cool to see that impact and to see they’re carrying, like, even this is so random that the reusable diaper is not reusable, the compostable diapers. They are not the cheapest diapers on the market. There’s probably more expensive diapers out there, and it takes commitment to do that. So I’m working with one of our main, well, not one of our main contact at Glaadbags. Talk to him. I mentioned what we were doing with diaper, and he says, oh, I’m a customer of theirs, and the people who are subscribing to the customer of theirs, they’re the people who are hardcore. Exactly. And that’s the type of people that we’re working with at this organization or people who are like, they’re hardcore. They really do care about this. And it’s fun to have that those be our partners.

Garr Punnett (42:30)

On Rheaply’s end we’ve got our reuse heroes. Those are the people that will go as far as they can to help really drive impact in the organizations that they serve and the communities that they serve. So, again, to the hardcore reuse heroes, that’s what this episode is dedicated to. Well, we’re at time. And I’ve so enjoyed our conversation. We end usually with a random act of reuse in which you get to share one thing that you’ve done, maybe this week or something that comes to mind in which you’ve reused something to the benefit of its life cycle or your community or your family. Is there anything that comes to mind?

Ryan Smith (43:14)

I have two things that come to mind, and I’m going to share them both. I know that. I’m sure. But one, my daughter really wanted to paint something. She painted a rock the other day, and the rock was all painted, and she wanted to paint something else. So I went and I grabbed the glass bottle that I had in my recycling. I pulled it out of my recycling, and she painted the glass bottle.

Garr Punnett (43:36)

And now it’s the best family glass that you have. That’s the prize possession.

Ryan Smith (43:43)

It’s art sitting in my living room.

Garr Punnett (43:44)

Yes.

Ryan Smith (43:46)

And the other one that comes to mind is we’ve partnered with Imperfect Foods. If you don’t know, imperfect foods, look them up. They’re awesome. It’s all about keeping landfill fruit out of the landfill and whether it be ugly fruit, surplus, broken ends of pretzels from the petrol manufacturer, whatever it is, that’s their focus. Well, they use ice packs to keep food that needs to be cold, cold. And we’ve with them built a national program, and we’re a small piece in the puzzle here. They’re really the leader here. But we built this national program where ice packs are picked up from a consumer’s doorstep at the time of delivery and taken back and sanitized and washed, reprozen and reused. And it’s cool that it’s truly the circular. And I love it. It’s one of my favorite examples of reuse, and I love that we get to be involved in it in a small way.

Garr Punnett (44:48)

Well, and I think that small way, again, is a part of our circular economic mission. Which is we all have more parts to play in. As you put it so well. In the beginning, you are a sustainability logistics, circular economy logistics company and your small part actually allows the movement of many other parts. And so in that way, I think that is so commendable and I’m so glad that we can share that in common and share that in the industry. Thank you so much for taking the time today.

Garr Punnett (45:20)

Please look up Recyclops. I saw that you all have job postings as well, so please check them out. We will link it in our posts, but please, you can find Recyclops at Recyclops.com. Ryan, thank you so much for taking the time.

Ryan Smith (45:42)

Of course.

Garr Punnett (45:43)

It’s good to see you. You’re alright. We’ll talk soon.