States across the United States are dealing with the mounting volume, costs and challenges to responsibly manage packaging waste. These challenges have brought about significant regulatory changes.
Extended Producer Responsibility (EPR) legislation is rapidly gaining traction, shifting the cost of managing end-of-life products from municipalities directly to brand owners. For businesses reliant on consumer packaging and foodservice ware, particularly quick-service restaurants (QSRs), grocery chains, and e-commerce brands, EPR should be top of mind and initiate a thoughtful review of supply chains.
Currently, several states, including California, Colorado, Maryland, Minnesota, Oregon and Washington, have enacted EPR laws primarily focused on packaging and single-use foodservice ware. Additional states are considering EPR laws.
EPR regulations require packaging producers (most often the brand owner) to report the material types and total weights of packaging materials they ship into participating states. State fees are often calculated by the pound of packaging material used and are tied to a material's recyclability; producers are charged significantly higher rates for hard-to-recycle and non-recyclable plastics compared to easily recyclable materials like paper.
For QSRs and foodservice brands, this applies directly to everyday items: takeout boxes, bags, labels on drive-thru bags and single-use utensils. Reporting can be complex depending on the distribution model. For example, a brand owner may be responsible for the primary inner packaging and secondary packaging, while the distributor shipping the product to the end consumer may need to report for the tertiary shipping packaging.
The 500-pound gorilla in the room is California’s EPR regulation (SB 54), which has ambitious goals to reduce plastic packaging and increase recycling. SB 54 mandates that all single-use plastic packaging and single-use plastic foodservice ware must be recyclable or compostable by 2032 and requires a 25% absolute reduction of these items (both weight and components) from a 2023 baseline year.
The 25% reduction targets are regardless of future sales growth. Concurrently, California's SB 343 imposes strict truth-in-labeling requirements. Brands can no longer use the ubiquitous "chasing arrows" recycling symbol unless the material is genuinely recyclable and accepted by curbside programs accessible to the vast majority, defined as at least 60% of the state's consumers. This is a major hurdle for several plastic resins, which did not meet the minimum recycling rate.
The consequences of ignoring these regulatory shifts are severe. Non-compliance can lead to state-imposed fines, and non-recyclable materials will face escalating fees. There is more than just the legality and paperwork involved here. We’ve seen that brand perception is increasingly tied to environmental responsibility and continuing to use excessive, unrecyclable packaging can severely damage consumer trust.
How can businesses proactively prepare for this new landscape of packaging?
Understand your supply chain and obligations: The foundation of EPR compliance is understanding your product packaging. Determine the material composition and weight of each packaging component. This will provide a baseline for improvement.
Get the right team: Collaboration between packaging procurement, designers, product engineers, marketing and trusted vendors will help ensure critical packaging considerations are not overlooked. Will the packaging maintain the required product protection? Will the new design allow for critical marketing and compliance marking? Will the packaging prevent spoilage?
Embrace material substitution: Transitioning away from problematic plastics is essential for compliance in California with the added benefit of reducing costs. Switching to easily recyclable and/or compostable materials such as certified paper-based materials or incorporating post-consumer recycled content can improve sustainability metrics and reduce state fees.
Focus on lightweighting and right-sizing: Redesigning packaging to minimize overall material usage, known as lightweighting, reduces the burden on state recycling programs and reduces carbon emissions associated with shipping. This approach also yields secondary benefits, such as lowered shipping costs and reduced fees incurred under EPR laws.
Viewing EPR merely as a compliance hurdle or a cost center is a missed opportunity. While the transition requires initial investments in supply chain visibility and packaging redesign, it can empower brands to optimize their operations, reduce waste and build consumer loyalty. By proactively embracing these regulations today, businesses can turn compliance into a powerful competitive advantage for the future.
