BioCycle Magazine

Compost Users Forum: Compost Marketing Trends In The U.S.

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Courtesy of BioCycle Magazine

“We know there are limiting factors in this sector,” acknowledges Hans Van Dusen, who is on the contract implementation staff for Seattle Public Utilities. “Transient populations as well as space in downtown and older buildings are problematic, but multifamily recycling has emerged as a priority for the city.” Seattle has taken a number of steps to make its program more user friendly and flexible in hopes of increasing the number of participating buildings.

Until now, owners or managers had to call the city to get service, wait for a mailing, pick a contractor in their area, sign and return a form, then pay a $100 setup fee. (The cost of recycling collection always has been embedded in the garbage rate.) Today, one call to the city results in a visit from a contractor within ten days and the fee has been eliminated. The change in overall city collection to commingled means that multifamily recycling has been streamlined to a two-sort system. Previously, two of the subcontractors provided source separated programs with up to six or eight containers. A $100 garbage bill rebate for a building that sends a tenant to the city’s recycling volunteer program is also being offered. Both the rebate and elimination of the setup fee are appealing to owners and managers.

There also is far greater flexibility in what type of service a building can receive as strict divisions between curbside and multifamily have been eliminated. Additionally, in previous contracts, several companies provided different, sometimes indirectly competitive service in one territory. With one contractor in each territory providing all collection services to both single and multifamily customers, the contractor and city can decide whether certain buildings of any size would be better served by curbside or multifamily collection because of configuration or layout.

Effective in April, the Seattle Public Utility changed the land use code so space for recycling is required in new multifamily construction. With density increasing dramatically in this popular city, it is hoped the requirement will make a difference as larger, new buildings replace older multifamily and single-family structures in density zoned neighborhoods. Finally, the city added a financial incentive to the contracts in the hopes of motivating contractors to push deeper into this sector.

Major Changeover

In the past, six companies — both primary contractors and subcontractors — served multifamily buildings. In this contract change, that was cut to two primary contractors: Rabanco/Allied, with its subcontractor West Seattle Recycling, and Waste Management/USA Waste, with its subcontractor Nuts n’ Bolts Recycling. These four took over accounts from two other companies eliminated in bidding. Route sheets, contact names, garage keys and openers for hundreds of accounts had to be switched from one contractor to another as the territorial boundaries within the city changed along with subcontractor alliances.

To further complicate matters, nearly 1,400 buildings served with a source separated system had to be switched by the beginning of April to the two-sort system: one container for mixed paper, tin, aluminum, plastic, and newspaper, and another for mixed glass. Nuts ‘n Bolts and West Seattle Recycling switched thousands of containers, necessitating massive logistical planning for current service levels and projected volume growth.

Outreach And Promotion

A public education implementation group comprised of the city’s public relations consultant, city staff and contractor representatives began meeting weekly early in the year. Outreach materials were developed in six languages. In January, the city mailed information to all multifamily dumpster accounts outlining pending service, contractor and collection changes. Next, haulers were required to contact all recycling accounts prior to the spring implementation date. Over the next two months, those accounts were mailed collection calendars. Contractors then made site visits and hand delivered educational materials for tenants that included instructional labels, kitchen decals, posters and brochures.

In March, the city mailed introductory information to all tenants in nonparticipating buildings promoting recycling, identifying their new service providers and asking tenants to talk to their managers. The mailing also promoted the rebate for Friends of Recycling (FOR) volunteer involvement, which has generated over 100 responses to date.

Started in 1988 as a curbside outreach program, FOR volunteers were recruited and trained to promote recycling and answer questions from neighbors. FOR expanded to multifamily several years ago and has a goal to recruit at least one aware, responsible tenant on site to educate others and keep an eye on contamination. Two hundred volunteers are in the program. Marketing efforts this year have sparked a resurgence of interest. Sixty tenants have responded, and the city is hopeful their involvement will get new programs off to a healthy start.

Going For The Gold

In an effort to sign up 80 percent or more of the buildings in this sector, the city included a financial bonus and penalty incentive in the current contracts. Haulers achieving less than 70 percent participation by the end of the year will be fined. However, if they reach an 80 percent participation rate, they will receive a bonus. With 1,400 and 2,000 buildings not served by recycling in their respective territories, the haulers have a significant challenge ahead of them.

Waste Management and Rabanco are working somewhat collaboratively on future outreach. They plan to first target areas with a concentrated number of buildings, and to contact those who have shown interest in the past. Both likely will send letters to billing addresses to elicit interest. Since billing often goes to owners, management companies or waste management firms that are off-site or out of state, they will also include canvassing in an effort to locate managers. Should that fail, they will leave basic outreach information with tenants or at doorsteps. To supplement the street activity, the haulers plan to work directly with property management firms.

“Recycling in this sector is a priority for the city and is emphasized in our solid waste plan,” says Van Dusen. “The city council wants to ensure that tenants get access to services even when reaching them through absentee owners and off-site management is difficult.”

Van Dusen says the multifamily participation rate is not the highest in the country, but the program’s low levels of contamination are among the best, albeit higher than single family. Haulers and city contract managers have had and will continue to have the option of pulling service at a building where contamination levels cannot be corrected. These buildings go back in the pool of nonrecycling targets.

Planners and policy makers are hoping that the streamlined service, allowance for space, and financial incentives will have a positive effect on participation. If these changes fail to encourage recycling in this traditionally difficult sector, the city will reassess its options next year and consider mandatory multifamily recycling.

Compost Marketing Trends In The U.S

To get a sense of compost marketing trends, a survey was completed in March and April of the 32 composters participating in the US Composting Council’s Seal of Testing Assurance (STA) program. Composters may use an STA logo in their marketing if they meet the program’s testing and reporting requirements, as well as health and safety standards.

Of the 32 composters (see list of participants), 31 are actively marketing their product. Two participating companies have multiple composting facilities. One is Monrovia Nurseries, which manufactures compost at three of its nursery sites for use in its container media. In total, the 35 facilities within the program manufacture approximately one million cubic yards (cy) of compost. They process a variety of feedstocks, including yard trimmings (15), biosolids (8), industrial byproducts (5), manure (4) and plant debris (3).

To better understand the context in which this market development information should be evaluated, specific operational and market related data also were obtained. The goal was to determine whether certain marketing trends were based on the experience level of the particular composters.

Composter Background

All but one of the composters have 15 years of experience or less. Six were operating for two years or less, with the average experience level being 7.7 years. We also sought to determine when the composters initiated their active marketing programs in relation to when their facilities began operation. The answers range from before the facility was operational to 15 years following the beginning of operations, with an average of 4.3 years. This time frame is longer than expected, but based on data obtained from newer composters, it appears to be on the decline. In fact, 32 percent of participants (10) started actively marketing within the first year of operation. The trend is promising, illustrating shorter facility “startup” periods and an increased understanding of the need for market development.

Program participants also were asked how long it took their marketing programs to reach maturity. (Maturity was defined as marketing at least 75 percent of the facility’s compost product annually.) The answers ranged from less than a year to as long as ten years; six facilities had not yet reached maturity. These “immature” marketing programs are associated with newer facilities. The one that took ten years to reach maturity is a small, understaffed municipal site without marketing personnel. The average time to reach maturation was 2.4 years.

Marketing Methods

Sixty-eight percent of participants predominantly are using in-house staff to market their compost, 16 percent are using brokers or distributors, and 16 percent are using a combination of both in-house staff and brokers/distributors. The larger composters primarily are the ones using a combination of marketing strategies, while public entities are primarily the ones using compost brokers. Overall, however, use of brokers/distributors was not size dependent.

Fifty-eight percent of participants are marketing their compost in bulk form only, while 42 percent market in bags and bulk. None market only bagged product. The high percentage of baggers within the STA program is not indicative of the entire composting industry. Much fewer than 42 percent of US composters are bagging. Our survey finding may be more indicative of the fact that the composters participating thus far in the STA program are more experienced in compost marketing.

Market Segments

Survey participants were asked to specify the top three market segments (based on volume), as well as the top three compost applications. As expected, the most popular segment identified was landscapers (94 percent). Homeowners were identified 55 percent of the time, topsoil manufacturers 32 percent, retailers 23 percent and nurseries 19 percent. The 55 percent homeowner figure illustrates that composters in the STA program sell much of their product directly to homeowners. This figure was higher than expected, while sales to retailers (23 percent) was lower than expected.

The most popular application for compost identified during the survey was as a soil amendment, incorporated for use in turf and garden applications. Ninety-seven percent of respondents identified this application as one of the top three end uses. The next most popular compost applications were: use as mulch (39 percent); growing media component (32 percent); topdressing (26 percent); and garden bed establishment (23 percent). Ten percent of respondents identified erosion control as one of their most popular applications, illustrating significant growth in this specific end use.

The survey asked if anyone had noticed any marketing trends that had affected their compost marketing program. The two primary answers were increased acceptance of the product (retail and wholesale), and customizing the product for sale. In fact, 58 percent of respondents stated they were customizing their compost product as a means to increase sales or value. Most of these have been operating for five years or more. The operations are of various size, but 75 percent produce at least 20,000 cy/year of compost. This implies that larger, more experienced facilities — having already worked through “startup” challenges — are more prone to customizing their product than those which are not. Of the 58 percent of composters customizing product, 78 percent do secondary screening and 61 percent manufacture blends.

The surveyed composters also identified compost end use trends that they felt would influence their programs. The number one trend was use of compost in erosion control, followed by agriculture (both traditional and certified organic) and various blending scenarios. The production of “higher tech” compost blends (e.g., sports turf blends) was specifically identified.

Product Value

Survey participants were asked about the value of the compost products marketed. Wholesale prices (larger orders to professional end users) ranged from $2 to $18/cy, with an average of $9.87/cy. These prices were quoted as “picked up” at the composting facility. The average price quoted (also the mean price) was higher than expected, and is probably not indicative of the entire composting industry. The retail price range was identified as $5 to $25/cy, picked up, with an average of $17.08/cy. The average retail price was lower than expected, but likely can be attributed to the fact that many of the composters are selling directly to the homeowners (no middleman or retailer). Although compost marketed on a retail level may be sold for $10 to $15/cy or higher, the stated average price is clearly a great improvement over the average wholesale price. Finally, survey participants were asked about their greatest marketing challenges. The following were given: feedstock biases; trucking/transportation; consumer acceptance (getting people to buy compost for the first time); public education/uneducated potential customers; and in some cases, not enough compost to sell.

Although the survey responses may not be indicative of the entire composting industry, it is obvious that marketing-minded composters are using more creative strategies to sell their products. These examples, as well as the initiation of programs such as the Seal of Testing Assurance, are excellent examples of how US composters have matured into more mainstream suppliers of horticultural and agricultural products.

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