Sustainable Packaging with Cory Connors presented by Atlantic Packaging

All in One Zero Waste Platform SCRAPP With Mikey Pasciuto

• Cory Connors • Season 5 • Episode 388

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In this episode of Sustainable Packaging with Cory Connors, Cory sits down with Mikey Pasciuto to explore SCRAPP’s evolution from a recycling app to a comprehensive zero-waste platform. Mikey shares insights on Extended Producer Responsibility (EPR), operational waste costs, and why businesses should design for efficiency rather than just policy. They dive into real-world examples, challenges in recycling infrastructure, and how SCRAPP helps brands navigate complex waste streams and regulations.

Key Topics Discussed:

  • SCRAPP’s journey: from barcode-scanning recycling app to full-service waste accounting platform
  • The role of data in predicting and reducing waste generation
  • Extended Producer Responsibility (EPR): what it means for brands and why it matters
  • Operational costs of waste management and strategies to reduce them
  • Real-world case studies: balancing packaging design, food waste reduction, and EPR fees
  • Why designing for operations beats designing for policy
  • The importance of recycled content mandates and eco-modulation
  • Challenges in recycling markets, infrastructure funding, and material economics
  • Standardization of recycling rules vs. local market realities
  • Universal landfill bans and their impact on creating new recycling markets

Resources Mentioned:

Contact:

To learn more or connect with Mikey:
Website: www.scrappzero.com
LinkedIn: Mikey Pasciuto

Closing Thoughts:

Mikey emphasizes that EPR fees should be viewed as part of doing business, not as a barrier to sustainability. By focusing on operational efficiency and informed packaging decisions, companies can reduce costs, minimize waste, and support a circular economy. Cory and Mikey agree: the future of packaging lies in balancing performance, recyclability, and system-wide thinking.

Thank you for tuning in to Sustainable Packaging with Cory Connors!

https://www.linkedin.com/in/cory-connors/

I'm here to help you make your packaging more sustainable! Reach out today and I'll get back to you asap.

This podcast is an independent production and the podcast production is an original work of the author. All rights of ownership and reproduction are retained—copyright 2022.

Welcome to Sustainable Packaging with Cory Connors presented by Atlantic Packaging. I'm your host Cory Connors. In today's episode, I connected with my friend, Mikey Pashuto, the CSO of Scrap. We took a deep dive into EPR from a waste perspective and it was truly insightful. Hope you enjoy. How are you, Mikey? doing great Cory thanks for having me on And so great to have you on again. We got to some time last week in Vermont at the sea change sessions. Wow. What an incredible event. And thank you again for driving me around your neck of the woods. Yeah, of course. All you had to say was Vermont maple syrup and I was in at the beginning and then Sea Change was just such a great event. I was happy to do it. And I don't think there's a single New Englander that doesn't like going up to Vermont for a couple days. So I was happy to do it. It was my first time there, as you know, it was beautiful. I can't wait to go back and see Hugh and the team at Butternut Mountain Farms and Burton. Wow. Incredible. Thanks again to Mitch Roviteo. Mikey, thank you for coming on. I appreciate you being on the show. Can you tell us what Scrap is and what you do in your role as the chief sustainability officer? Yeah, so I am the chief sustainability officer and co-founder of Scrap. I always add the co-founder title because we're a team of four. So if there's anything, anything that comes outside of the role of my job as sustainability also is part of my job as well. So I do a little bit of everything. ah So what we do at Scrap is we're a zero waste focused company. We started as a mobile app where you could scan the barcode and find out how to recycle said item based on your location. And that was great. But then the number one piece of feedback we got was, know what to do with the shoe box. What do I do with the shoes? So we realized that packaging is great. I love packaging. I could nerd out about that as an engineer by trade all the time, but there's a bigger question around waste and what we do with our stuff. And so what we've kind of like evolved and shifted as a company is we kind of position ourselves as waste accountants, where we go into organizations. We look at all of the data around. what their packaging is, what it's made of, and all those different aspects, and help predict how much waste they're gonna be generating. This ended up being really useful for EPR. This ended up being really useful for operational efficiency, because I know EPR is a big hot topic right now, but a lot of companies, like some facilities, pay over a million to three million dollars a year for their solid waste management costs. So there's a real bottom line cost outside of policy that we discovered by accident. And we're still doing a lot of work around messaging with the app and like educating people. But think of me as your resident trash and sustainability nerd that really dials in from anything from mattresses and paint waste and batteries all the way to packaging waste as well. Soup to nuts, that's what we love to do at Scrap and that's what we really focus on. You know, I, I love that. And I'm, I'm always very impressed by you, Mikey. When we go to events, there's always hard questions asked and very few people have the data and the information to answer them when it comes to waste and, that side of the cycle. And you, you're always able to step up and say, Hey, I've dealt with this before. Let's talk about it. And I just want to share that compliment with you. you're the best, you're too kind. Honestly, the experience comes from just diving into dumpsters a lot and not being afraid to get dirty. We were actually on site with a customer the other day and they do a waste sort. So we were, it was a big, big event and there was an error in food and beverage and to this day we're still trying to find out why. There was over $9,000 in sales worthy material, whether food, beverages, drinks that was thrown away into a tipster. And we're looking at that as like bottom line, that is a lot of money to be throwing out. Like obviously if there's a recall that does happen and we have to adapt for that. But the biggest piece of advice for tackling hard questions is just don't be afraid to dive in a dumpster every once in a while and take a look because that's kind of where the answers lie where you can kind of backtrack from there. But trying to look at it from the top level versus the grassroots side can be a little bit difficult. I totally agree. Yeah. We have to be willing to get our hands dirty and, and do the difficult things and roll up our sleeves and really make an effort here. So you mentioned extended producer responsibility. That's, that's exactly what I want to talk about today with you. It is, it's something that, a lot of people are very nervous about. It is, a lot of uncertainty around what, what do we do for EPR? So my question to you is how can scrap help companies, brands and the like navigate through these EPR laws? It's a very big question right now and a lot of people are a little bit spooked by it. Some for good reasons, some for not. They're for maybe just a bit like a bit boogeyman ish reasons. like for some companies, this can dramatically affect their bottom line. Like I've seen companies we projected what a national EPR would look like for them. And that's $2.3 million to their bottom line. And that's that is crazy, especially if you're in a retail environment, like your margins are already pretty tight. So adding that to it can directly pull from profit. So we understand why people are worried. think. Yeah, sure. quick. So $2.3 million as a fee to this brand or company, in addition to all the other fees and taxes and everything else that they are spending on, this is just money right off the bottom line. Is that right? Okay. that is under the condition that like, we based that off of Oregon's fee schedule for the entire nation. So it could be more, it could be less because looking at that, you do have situations where even if we did pass national EPR, I one thing people do get mixed up, the fee schedule would still be based on per state because the fee schedule is crafted in a way to fund infrastructure that is lacking. So if For example, Massachusetts is an amazing corrugated cardboard recycling program. The fee would be quite low in Massachusetts versus if it was in I'm going to choose a state that doesn't have EPR, Idaho passed it. They might not have a good corrugated cardboard program. So the fee would be higher. That's what those fees are used for. But it's something where brands are in a bit of a pickle right now. They're trying to think of they're trying to design for policy where our thesis is that don't design for policy design for your operations. because I guarantee swapping to a packaging that is just good for EPR and not good for your business will cost you more to your bottom line than optimizing for a fee that is subject to change. So that's something we've been looking at quite a lot to really understand how to make sure that brands can win globally with EPR as every state and every country's different. That's a great tip. Yeah. Focus on what's good for your business and can also improve your EPR fees or I should say lower your costs that way. But overall cost is what's really important here, I think. So can you give us an example, something that you've seen that was successful for a company that maybe a different way of looking at things? Hmm. So we had a customer we did some work with. They're based out of the UK. They sell dog food, but it's more like, it's like fresh food packaged in, in, in, like the plastic bag and you cut it open and you keep it in the fridge. That style of dog food, not like your standard kibble. with them, they used a multi-layer plastic to, cause there was able to be cooked in the bag. Um, with that, because it was multi-layer, it's a complex composition. going to have a higher EPR fee. But they reduce their food waste by close to 40%. So when you look at the EPR fee, you're like, we made a bad packaging decision. I told them, I'm like, if you can get them on a material and get to the same value, that's the goal for you guys. Because looking at their food waste hauling fees, if you're dropping food waste down 40%, your compost and hauling fees are way, way, way, down. And in some areas, it depends where you are. Like, it can be three, four, $500 a ton for disposal. That's just like starting out. And then there's like fees and fines on top of that. My dad runs a manufacturing facility and his hauler, if his dumpster or his corrugated recycling dumpster, if the lid isn't able to shut all the way, it's an additional $200 fine for an overflow. So you have to think in these things. I know like we're talking cents per pound or dollars per ton with EPR fees. There's some very real costs inside the operations where if you compare the reduction in food waste for one being good for the planet, LCA that perspective and the reduction in the more meals that are able to be procured for and made for dogs with the same amount of material, the EPR fee, not that it's negligible, it's certainly a real cost, but compared between the two, the EPR fee is just the cost of doing business. And I think the brand would agree, there being their animal and sustainability focus. that I understand our packaging isn't the best, but if we can pay into a fund to get it recycled or create a market for it, that fee is gonna go down over time. And I think that's a much easier conversation to have holistically. know we're waste of packaging there. You and I could talk packaging all day. But chief financial officers aren't wired that way. Even operations guys aren't wired that way. So we have to really be clear about how we're articulating the value of good packaging and the value of good decision making across the supply chain, not just designing for a fee schedule. And they do align in some cases. They're sometimes designing for the fee schedule. It means you may get better package, and you'll see the reduction across the board, too. It's not mutually exclusive in that. Well said. The good news is that it sounds like a lot of these government agencies and people that are working on EPR laws are finally starting to communicate with packaging professionals like yourself that actually have insight into what's the right thing to do. I know our president at Atlantic Packaging, Wes Carter, sits on the board at California for their EPR law and they originally wanted to totally ban plastic stretch film. And he said, if you do that, the, the, the effects of that would be absolutely incredible and astronomical. The loss of goods, you know, just, can you imagine how, how much waste would have been created by that? I mean, stretch film is such a simple solution, that, that works and yes, it's difficult to recycle right now, but what if EPR laws make it. so that those fees collected will create a stretch film recycling system that works for everybody. And that is something I love about EPR when it's done correctly. The goal of EPR, it's extended producer responsibility. It basically, how my system's brain thinks about it is we're just taking the externality that was pushed off to municipalities and the everyday person and bringing that in as a line item cost. And I know because it's new, people are jumping as this is the new thing we need to adapt to. If you're packaged in a corrugated cardboard box and you're using, you know, some of the innovative things you guys use at Atlantic that you're able to do certain things with paper in the same performance that plastic can, you're going to be rewarded for that from a fee schedule by using sustainable packaging. But you use the sustainable packaging in the first place because it met performance spec and it performed the job. I think we were talking about like paper pallet wrap with semen paper because it was something they were testing with and whatnot. and it just can't perform to the same standard as plastic pallet wrap. And are you not going to wrap pallets anymore? Because then you're going to have boxes everywhere, damaged product. Like we did work for an egg company in the biggest trade-off between a PET thermoform plastic egg carton and a paper pulp egg carton is the egg breakage rate was high, was less with a PET carton. But the plus was if you also broke that, the PET carton didn't have holes in it. So if you broke one egg, stayed, the leakage stayed to one carton and one or maybe two, and you could clean it off and like fix it. With paper, you would stain the paper. So there's different conversations to be had. And I know we like, there's paper versus plastic, and we talk about these different functions, but there's just some times where even though plastic is less recyclable from the entire systems thinking perspective, it performs better on every avenue. As long as we're making that informed decision, I usually tell companies like until we can find a viable alternative, the EPR fee is just the cost of doing this. Right? Yeah, that's exactly right. And you need to look at the whole picture from the cradle, the cradle, the beginning to the beginning again. How is it going to, how's it going to flow through the system? And does that really make sense? I couldn't agree with you more. So I'd like to think about what happens when EPR works and what happens when it's actually a positive effect. Let's say that the systems get into place. I Oregon's already collecting fees. What do you think that those fees could be used for? That would be really positive from a, Murph and a sortation and a system stamp. I know I've seemed somewhat critical of EPR. I'm actually, I'm a huge proponent of EPR. just, the Bostonian in me is always very direct with things. I'm a very big fan of EPR when it is written well and correctly. I'm a huge fan of eco-modulation. I think it's a great way of listening to municipalities. And we have some customers that in municipalities that use like our mobile app for the residents. And it's so challenging to educate the public. on a budget when you have to go through government approval processes, which for context, brands average close time for us is eight to 12 weeks versus government that's nine to 18 months. So think about every little decision you have to make on a daily basis with that much lead time or that much decision making capacity. So it's not easy for them to adapt the same way brands do. Also hauling waste is incredibly expensive. And so That's something brands might know from their facilities perspective, but doing that on a distributed basis, it's hard enough to do it for your own facility. Nevermind having to educate the public on diverse waste streams that can be ranging from medical, medication, sofas, furnitures, fridges, now packaging, and you have to educate people on what's monomaterial versus multimaterial. Does it scrunch? Is it clean? Is it dry? And then you have to consider market conditions at the very end of it. It's like, even if I collect it. Like the Carton Council actually sponsors grants from Murphs to get the equipment for free to recycle cartons. And even with that, I thought that was a no brainer. Why aren't people jumping at this? I talked to somebody who runs a Murph and they said, here's the challenge. We don't have enough. We have the room and we do have the capacity to do it. The problem is, that we don't have the end market. And by the time we bail up enough, there's hornets nests inside the cartons. So it's like, it's in also. Can you think about how orange juice and milk smell after sitting out for six to eight weeks? And she was like, we get residential complaints about the smell. you have to really think what EPR does is absolutely brilliant for is it funds the infrastructure and that money is then allocated to municipalities to afford these municipal contracts, decrease local taxes where it's no longer on the responsibility of the municipality and you get the value of collective bargaining. So now because you can collect a bargain, you can create a lot larger contracts for the hauler, they get stability. So they don't have, they can bid in a different way and offer more of a better, more premium service. So across the board, that money that your fee goes to, goes to funding recycling programs, promoting innovation. And if there's recycled content mandates, that really helps the Murphs understand there's going to be at least this much demand so we can invest in this recycling equipment. where recycling and Merif Equipment, I think WM, I forget what they spent. I think they spent upwards of $50 million on one facility. So it's not short money to get recycling in. And it's a lot of long-term investing and market conditions can be very fickle. Just to wrap this up, in 2008, the corrugated guys knew on the recycling side that a recession or a huge recession was about to happen because the corrugated box price from the recycled content perspective went negative. Where the recyclers were having to pay people to take their material from them so they could get the money to process more material. So they were selling their material at a loss from the recycler perspective for the OCC bail. So that's something most people would think, someone's going to buy it. There are instances where the price can go negative on a material and you have to pay to get it off your lot. This is actually somewhat true of glass currently where the bail prices had to change where you get paid for it getting delivered. So you have to pay for the delivery and the shipping of the glass because the freight is quite expensive due to the weight versus other commodities, the pickups included and they handle the delivery. So the bail price is actually having to be evaluated differently. So I think recycled content mandates are a huge, huge important part of EPR. that encourage to be included, but there's nuance there too, where you have to look at, is it demanded that has to be domestic supply or is international supply allowed as well? There's EPR, it gets a lot of flack, but it's covering such a big system wide issue at the current moment, where it's having to kind of put the cart before the horse and fund technology that there might not be an end market yet. All while there's macro microeconomics and trade and tariffs impact that as well, because materials coming abroad. It is a very complicated and hard policy and I do not envy the position of the CAA at all. CAA being the producer responsibility organization that oversees all of this. They have their work cut out for them and I do nothing but tip my hat. It is a very complicated issue, but your fees, long story, slightly longer, your fees go to something very meaningful and help make the recycling system work. And I wish we had a crystal ball that would, that we could predict what would be valuable in the future. So we could invest in that, but you're, you're exactly right. It's, it's such an important part of this thought is, okay, let's say we do all this. Let's say we collect all this. Is it worth anything at the end? And is it valuable? Is it going to be reused? Is it going to be turned into something? And is it going to be down cycled up cycle the Reese recycled? And all of these questions need to be answered before we spend millions and millions and millions of dollars on sortation equipment and on all these, these facilities to make things more circular. now great point by, by that Murph operator. you know, if it sits around for six months and it's just going to collect bugs, that's really actually dangerous for, for local people. Exactly. the funniest, I shouldn't say the funniest part. What, I guess the comedic tragedy of it all is when you design an amazing package and you can make a product last for three months or three years on the shelf, that typically usually means that it's going to make it very hard for the recycler to do something with it. So there's this element of what is the pinnacle of packaging design is the bane of the recycler's existence. So the new kind of meta is how do we marry that up where you get the best of package design without ruining the recycler's day and kind of have something that's a nice compromise where they can turn it into something useful. Yeah. I interviewed Tom connipture. think you've met him before. He was one of the people that invented the new Pringles cans, with the, the, paper bottom. think they have a new paper bottom. said, why are we creating packaging that lasts for, that will sustain the product for two years when it's going to get eaten in, two months. And we need to adjust that to like, to, to your point to make it easier to recycle. and to make it just good enough to last just long enough to be consumed. Now, there are certain things that need to last for two years. I understand they're going to an island somewhere, they're going to a food desert. They need to be able to sustain the product for longer. But I think your point is a really important one. Not only are companies gonna save money, but it's gonna be easier for the MRF to recycle those products. And it's actually a really insightful point where I come from a background of manufacturing engineering. My sister makes missiles for a living and my dad does manufacturing engineering, like subcontracting for like military and medical organizations. Like I was raised having to hold a spec on a product, 0.005 inches at a minimum for most dimensions, sometimes 50 millionths of an inch, which sometimes you have to blow on it to get the dust off of it to make sure it hits the spec. Like it's that tight of a tolerance. Yeah. all of that being said, one thing that got drilled into me besides sorting my Legos before I could do anything as a kid, was that Toyota kind of really nailed like the Kanban system and Six Sigma. And I think that's something packaging is coming from the opposite perspective of where you want to have inventory in case a big order comes in. And there's nuance to that as well, where Toyota perfected it's like called right on time manufacturing that you don't have inventory everywhere and everything comes in right on time. And we're trying to hit that in a retail market where we don't want to create food waste. We want to ship just the right amount and make sure the packaging lasts for just the right amount of time. And that's something that relies on so many different indicators, like in the economy and like consumption habits, like is the Super Bowl going to happen? And do we need to increase chicken wing production by 60 %? Like you have to think of all those different things. And I don't know the answer to that, but I think that's the ultimate goal that we're kind of shooting for. as like a society and like an economic system is we want everything right on time, instant, like everything moves is just a smooth machine. And that's how you cut out waste in the The logistics are incredible and we're so used to just, it's gonna be there on the shelf and it's gonna be fresh and it's gonna be brand new and it's gonna have a perfect packaging and it's gonna be all these things. maybe it's not always gonna be like that and maybe that's okay. And maybe we are gonna run out of this kind of eggs or whatever the case may be. And that's all right. We should be able to adjust to some of those things. But I did want to get back to some of the waste collection things that we're talking about. I know you told me this one time, I think it was there's 26,000 different recycling or I should say waste. What did you say they were waste rules or in different municipalities? So that being said, like where I live, this is recyclable and this isn't. this is compostable and this isn't. And those rules, there's 26,000 versions of those across the USA. Oregon has, with their Recycling Modernization Act, has said, we're gonna make it all the same for Oregon. Do you think that that's possible nationally? So I do put it as it would make my job a lot easier if it was my first project with scrap was I made the database like of I had to look up every single recycling program and sometimes different like different parts of Chicago have different recycling schemes. I largely agree with the idea of standardization. The issue with that comes with what are the markets in those areas like because then you need to spot the stockpile material if the market isn't there. The recycling programs of a town are largely dictated by what material is not just materially recyclable, but like viable from there's three criteria Holler has or a recycler has. I need the quantity, I need the quality, and I need the market to sell it to. If I do not have all three, it's not going to happen. And to their credit, that is a perfectly fair set of rules to have. So I think when you have standardization across the state of Oregon, for example, I'm sure they looked at, Portland and greater Portland area is gonna kind of have its own thing and the challenge is gonna be more Eastern Oregon that was a bit more rural. I think that was the two challenges versus other states. If it's all rural, how do you get around the economics of great example, flexible film and plastics? Fantastic from a packaging perspective because they're super lightweight. From a holler's perspective, they're borderline shipping air. And that is not what they want to be doing. So there, could talk about like hub and spoke type systems where you have like transfer stations or areas that can aggregate the material or recycle it locally in the chain. I think if you're looking at it from a truly global perspective, a national, like everything can be recycled on this list. I think that can work, but there would certainly be areas that are taking a loss to recycle the material just for the sake of consistency. versus if you go a more localized approach, a more agile approach, you would still have somewhat diversity of programs, but we have laws in the waste industry called the Univerto Solar Landfill Bands. So paint is a common one. Batteries is being passed like rapidly because it's setting trucks and facilities on fires. In the solid waste industry, I think we had over 260 fires last year to the point where facilities and trucks are having to operate uninsured due to battery fires. Do not put your batteries in the trash or recycling. cause a lot of problems. And so there are certain things. be specific, those batteries are the little circle ones that if you press on them, can burn up, right? It's not like a double A battery. Oh, those two, okay. Anything lithium ion, no bueno. Which most batteries are lithium ion now. I think there is like, there's a certain chemistry that is fine. I think nickel cadmium doesn't cause this issue. But the thing is, is that now they make battery chemistry pretty universal. So it's not like the disc ones were one chemistry back in the day and then your double A was one chemistry. Now they make lithium ion disc coin batteries and they make lithium ion or alkaline. That makes sense. we always just say in general just put them in the battery waste bin and we'll take care of it. I don't think you need to tape the ends anymore though. You don't have to worry about that. They're safe enough at this point. But for universal landfill bands just to wrap up that thought. I think universal landfill bands are great. We do it for mattresses because it forces a market to exist to prevent landfill waste or landfills from filling up because to quote arbitrage I think it's Mad Money was the movie back in the day where They're like buy low, sell high, arbitrage, arbitrage, arbitrage. Your landfill fees are correlated exactly to how much space is left in the landfill because they need to make enough money that when they decommission the landfill, they have the money to consistently monitor and make sure it is working and functioning correctly and there's no leachate. Like they have environmental regulations. They have to like keep it in a state that is not hazardous to the public. So they're going to remove your lead paints and your paints, your batteries, your mattresses. Those kinds of policies are great. And I know even New Jersey has banned some packaging items like cardboard and plastic bottles from going in as well. So from a waste management system perspective, we're able to kind of control pretty tightly in terms of like a universal what is or isn't. I think it's easier to rule out these things shouldn't be going to a landfill before we prescribe them. They have to be recycled. That's a great point. Yeah. We need to look at how can we make other markets for these items that should be and could be recycled. Well, thank you so much, Mikey. Appreciate your wisdom as always. How do people get in touch with you and your team at Scrap? So you can also get in contact with me. Just shoot me an email. My email is Mikey at scrapzero.com. It's M-I-K-E-Y and then scrap is S-C-R-A-Double-P-Z-E-R-O.com. Scrap, it's a pun, scrap in an app. If that helps you remember it. Feel free, my LinkedIn, I do try to check it. Feel free to reach out to me there too if that's easier. We did actually, we're in the process of launching our waste footprint calculator. So if you have a specific packaging type that you're trying to understand how recyclable it is, not only based on the theory of a scheme could accept this, but also what happens, like how many people choose to recycle? What's the engagement rate? Can the MRF capture that material at a hundred percent or is it more like 80 %? We factor all that in to kind of give you a range of, this is what you can kind of expect from a waste generation perspective. So you can prepare for. EPR or evaluating different packaging types in a quick and easy way. So feel free to check out our website and there's a bunch of useful resources there too. And you can find how to get in contact with us or me or the team there as well. Thank you, sir. Appreciate you. Thank you, Cory, I appreciate it as always.

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Cory Connors

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