RIVERSIDE, CALIF. (March 15, 12:30 p.m. ET) — Nestlé Waters North America Inc. has committed to incorporating 50 percent recycled content in previously virgin-material bottles for its Arrowhead brand of spring water, using food-grade PET from CarbonLite Industries LLC's new recycling plant in Riverside.
Nestlé will buy one-third of the $58 million plant's output. Separately, bottler PepsiCo Inc. has agreed to purchase 40 percent.
CarbonLite held a grand opening ceremony March 2 to showcase the impressive-looking, brightly lit, high-ceiling plant, where operations run behind clear glass half-walls.
The 220,000-square-foot plant, whose first line started running 24/7 about two months ago, is laid out in a U shape.
Even though a second line is only on the drawing boards at this stage, the Riverside plant may be just the beginning.
“We have an agreement on a strategic alliance with Nestlé to put up a facility like this on the East Coast,” said CarbonLite President Neville Browne in an interview at the grand opening. “We'll be there when we have a good positive collection story and we might even stick our necks out and put in a field-of-dreams plant.”
Browne also said he was approached at the grand opening by people who told him they have investors interested in having similar plants built in Turkey and India.
“We hope to build a second PET recycling plant with CarbonLite that will allow us to put 50 percent recycled content” in one of the company's water brands that is bottled on the East Coast, added Nestlé Waters President and CEO Kim Jeffery in a speech videotaped for the grand opening.
“PET plastic can be used indefinitely and the best value is to restore to high-grade bottles. It improves our carbon footprint whenever we can make a more renewable product. We would encourage the food and beverage industry to use [recycled] PET in their bottles.”
The Arrowhead brand was chosen by Nestlé for the 50 percent recycled content because it is bottled primarily at the Nestlé Waters bottling plant in Cabazon, Calif., 40 miles east of Riverside.
PepsiCo did not state any specific amount of recycled content it might include in any of its beverage containers. Instead, Paul Boykas, vice president of global public policy for PepsiCo, simply said: “We look forward to using a lot of those 2 billion bottles” that will be turned back into recycled food-grade PET resin. “We believe in investing in sustainable growth for people and for the planet.”
But the Riverside plant, in CarbonLite's eyes, is more than just another food-grade PET recycling plant for the U.S. market. Its executives see the plant as the beginning of a new era in the U.S.
“This plant heralds the end of the disposables age, and the beginning of the ‘remakeables' age where things are made in a way that they can be rescued from landfills and made back into the same product again,” Browne said.
“What good does it do if you take a recycled PET bottle and make it into a sushi container that just ends up in a landfill three days later? … When a new bottle is made from an old bottle that was in turn made from an even older bottle, there are zero new natural resources used, the carbon footprint is ... eight times less, and it reuses the preserved molecule over and over,” he said. “It addresses resource reduction and carbon reduction.”
Leon Farahnik — who is chairman of both CarbonLite and its parent, Los Angeles-based HPC Industries LLC — agreed.
“We are experiencing a time of realization in America that there are limits to how much we can use of our natural resources, and we must be conscious of how we use those resources,” Farahnik said.
“You can bury plastics, burn it and recycle it. But to CarbonLite the only viable option is to recycle it into bottles because it saves energy and you are reducing C02 emissions.”
In addition, focusing on product-to-product recycling — whether it is bottles to bottles, toys to toys, or containers to containers — forces companies to rethink the designs of their products, Browne said.
“It causes producers to consider in their design what the bottle should look like and how they need to design it so they are happy with it when they get it back, and so they can easily turn it back into another bottle,” he said.
Product-to-product recycling for items like beverage containers gives those companies “the answer they need” to respond to critics who charge them with pollution, he said. “If a company can say that 100 percent of its bottles are made from its own bottles, that would seem to satisfy the largest complaints [of] bottles floating about anywhere.”
The Riverside plant currently is operating at about two-thirds capacity, Browne said. “We have six to 10 weeks to go before we put the pedal to the floor,” he added.
So far, the only bump has been in the bale-breaking process, Browne said.
“We have had some issues with bale breaking because of the density of some of the materials in the bales. There are some design errors in that area that we are correcting. Other than that, it has gone pretty much as we expected. We are very pleased with 90 percent of our vendors.”
When that first line is operating at 100 percent capacity, the Riverside plant will process 100 million pounds of PET bottles and produce 75 million pounds of food-grade PET pellets annually. He said about 85-95 percent of the recycled PET made at the Riverside plant will be clear pellets and the rest will be green, depending on the season.
Browne said that, depending on market conditions, the company anticipates adding a second line of similar capacity in that second phase of expansion, likely to begin in late 2013. A second line would double capacity and boost the number of plastic bottles recycled by the plant to 2 billion annually.
While some recycled PET plants have struggled, expectations for the CarbonLite plant are higher, as it has already procured buyers for 75 percent of its output.
In addition, sources said the contracts with Nestlé and Pepsi cover the projected operating expenses of the plant and give CarbonLite the profit margin it needs.
“We built the plant on the backs of the agreement with Pepsi and then partnered with Nestlé because of their vision for sustainability,” said Browne.
Calif. Gov. Jerry Brown called the Riverside plant, nestled in the foothills of the mountains, a model of “efficiency, elegance and sustainability.”
“We have to transform the way we live [so] that nothing is wasted and products are designed to be recycled and reused,” he said at the ceremony.
He also said that the plant — a cooperative effort between the state, county, city and private business — should be a reminder that people need to work together to get things done and not fight.
“We have to get people to stop thinking about themselves and stop thinking of themselves as Democrats and Republicans and instead start thinking about what's best for the people,” he said.