All over New York City, scavengers collect empty bottles and cans to redeem the 5-cent deposits. A lot of the containers end up in Westchester County at a Mount Vernon, N.Y., warehouse run by 28-year-old Conrad Cutler.
Every week Cutler's enterprise collects up to 3 million empty soda, beer and water containers, which are sorted and returned to distributors. They pay the deposit plus a state-mandated 3.5-cent handling fee for each one.
The pennies and nickels add up: Annual revenue for Cutler's Galvanize Group has grown to $14 million.
There's lots of room for it to grow too. Deposits are redeemed on only 65 percent of the 8 billion returnable bottles and cans consumed in New York each year, according to state data. (In California, it's 75 percent.) Since getting into the redemption business six years ago, Cutler has built a network of private haulers, property managers and janitorial companies that give his crews first dibs on recyclables before they're hauled to the curb, where they are prone to plunder by the anonymous army of New Yorkers who engage in that enterprise. I say "plunder" because it's illegal to rummage through recyclables once they're curbside, at which point they become valuable to the Department of Sanitation.
According to Cutler, his operation is not a rival of those other collectors.
"We look for the bottle that wasn't intended to be redeemed," he said. "We're diverting bottles and cans that otherwise would end up in the streets or streams."
But recently his quest for redemption was interrupted by a dispute with Nestlé Waters North America, the water bottling company that is part of the Swiss conglomerate that makes candy bars. According to a lawsuit Cutler filed in state court in New York, Nestlé violated the state's bottle-deposit law by failing to pay for bottles and cans in a timely manner and regularly refusing to pick up returnables. For Galvanize Group, a business based on getting bottles and cans in and out the door quickly, a backlog is a serious hang-up.
"We had 2 million of their bottles bagged, waiting for pickup, reaching to the ceiling," Cutler said.
Nestlé denies the allegations in Cutler's suit. "We look forward to vigorously defending ourselves" in court, a spokesperson said, "as well as possibly filing counterclaims in this matter."
It could be that Cutler is so successful locating unredeemed bottles and cans that Nestlé would rather not bear the cost of sending trucks to pick them up. Under New York's bottle law, companies such as Nestlé get to keep 20 percent of all unredeemed deposits; the other 80 percent goes to the state, which reaps about $100 million per year from the arrangement. When people don't get their nickels back, beverage companies and the state benefit financially.
Cutler says it's time the state changed its bottle-redemption law, created in 1982, to make sure it incentivizes recycling. The deposit on each container should be doubled to 10 cents, he said, in order to discourage consumers from throwing away returnables. More recycling would benefit redemption centers, like his, whose profits are squeezed by the rising minimum wage, which starting next month will have doubled since the state last updated its bottle law a decade ago.
"We can all work together to make the recycling system more efficient," Cutler said.
By the way, Nestlé eventually picked up Cutler's 2 million bottles. They filled 18 trailers.