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Shrink-sleeve labels create a huge expense for PET recyclers

By: Jim Johnson

March 19, 2014

ORLANDO, FLA. — Dealing with shrink-sleeve labels, new research shows, is an expensive proposition for plastic bottle recyclers.

Members of the Association of Postconsumer Plastic Recyclers are on the front line of this issue as they are increasingly being challenged to process an ever-growing number of plastic bottles utilizing the full-sleeve labels known to provide additional visual pizzazz on the shelf.

But while shrink-sleeve labels are an effective marketing tool, they are denting the wallets of plastics recyclers.

“There is a significant cost associated with the use of shrink-sleeve labels today that’s damaging to the recycle industry” said John Standish, APR technical director, at an association meeting in Orlando. “And it limits the availability of post-consumer material.”

APR, through its research, has come up with an estimate of just how much extra recyclers are spending to remove and deal with the labels as they process bottles and create recycled PET flake.

Use of shrink-sleeve labels has been growing in recent years, with one estimate indicating they now represent 7-9 percent of the total recycling stream. That’s up from 5-6 percent in 2012 and about 3 percent in 2011. The figure was about 1 percent in 2007.

Shrink-sleeve labels are most commonly found in recycled bottle bales made from curbside collection, the trade group said.

Recyclers are spending anywhere from 2-4 cents per pound of reprocessed plastic to remove the shrink-sleeve labels, which are typically incompatible with PET recycling.

That’s not 2-4 cents per pound of bottles that have shrink sleeve labels. That’s 2-4 cents for every pound of bottle plastic they reprocess.

While that added amount might not seem like much on a per-pound level, the numbers become more significant when expressed on a per-ton cost basis, which was estimated to be $40 to $70 at the association’s meeting.

For a company that reprocesses 70 million pounds per year, and using a mid-range estimate of 3 cents per pound of added cost, the financial hit could be $2 million per year, said APR member Curt Cozart, owner of plastics recycling consulting firm Common Sense Solutions Inc.

Weilong Chiang is a senior principal engineer for PepsiCo and helped lead APR’s investigation into the impacts of shrink-sleeve labels.

“The shrink label problem is hurting the profitability and the financial health of the PET recycling industry and also diverting investment from the areas which would add more value to increase the supply and the quality,” Chiang said.

APR, as part of raising the red flag regarding shrink-sleeve labels, has sliced and diced the issue from several different views in the recent months. Members split into a handful of teams to examine the problem from various fronts, including: industry impact; bottle sorting; label removal; use of floatable labels; the impact of ink bleeding on recycled plastic; and testing methods.

APR Executive Director Steve Alexander pointed to all the work association members have done in recent months examining the issue and said the work should not stop there.

“This is not the end. This is the beginning. So we go forward,” he said about the need to communicate the association’s views on the impact of shrink-sleeve labels. “This does us no good if we don’t tell anybody about it.”

Chiang indicated that de-labeling machines, currently being used by some recyclers, are a high-cost, but expedient partial stopgap to address shrink sleeves until floatable labels or other solutions are widely adopted.

“Shrink labels continue to cause problems in yield loss and quality deterioration and capability for the recyclers to supply recycled PET,” he said.