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September 11, 2009

Democrat & Chronicle

Area stores bracing for flood of water bottles
Wegmans predicts 30 percent jump in volume

Local supermarkets and convenience stores say they're preparing for a major increase in the volume of plastic bottles redeemed when a new state law adds water drinks to the recycling stream.

The law sweetens the handling costs that retailers may recover when the containers are redeemed. But questions remain whether that will be enough to compensate for the higher volume and other related costs.

"Our systems are in place, I think," said Dave Breen, owner of Herrema's Food Market in Irondequoit. "What bothers me most about this is we're taking in people's garbage at the grocery store. Curbside recycling is the answer."

A federal judge next month is expected to lift an injunction against adding bottled water to the 5-cent deposit law that now covers carbonated beverages, wine coolers and beer. A hearing is scheduled Oct. 22 to hear arguments from the bottled-water industry that some small companies are not ready for the change. But retailers in this region are getting ready for the most significant increase in the flow of redeemable products in years.

More than 3.2 billion water bottles are sold in New York each year, according to the Container Recycling Institute. Bottled water now constitutes about a third of the retail beverage market, though industry studies project huge growth over the next several years. One study expects a 50 percent leap in sales between 2006 and 2011.

The largest local grocery chains, Wegmans Food Markets and Tops Friendly Markets, said this week that they have plans either to retrofit existing mechanized redemption machines or add workers at stores where bottle returns are handled manually.

Wegmans has estimated a 30 percent increase in the volume of redeemable plastic bottles and said it is working now to determine if the capacity of its redemption machines is adequate to handle that.

Tops also is examining whether its machines are sufficient to cope with the new volume. "We're going to do what it takes to serve our customers," said Tops spokeswoman Katie McKenna. "That might mean adding people to help with redemption."

The Tops store on Winton Road already has moved its redemption machines outside in anticipation of the higher volume.

The state Legislature this year expanded the bottle bill to include water and at the same time decided that 80 percent of unredeemed deposits — cans and bottles not returned for the extra nickel paid at the time of purchase — would go to the state, with 20 percent going to the manufacturers. Currently, the bottlers get that money.

The expanded law covers bottled water, but not sugared drinks such as sports beverages, iced tea, lemonade and the like. Wegmans spokeswoman Jo Natale said some confusion remains on which, if any, flavored water drinks contain sugar.

The law requires labels indicating a five-cent deposit and point-of-purchase information about the change. Natale said the stores are planning ways to meet this obligation, though specifics won't be resolved until the injunction is lifted.

James Calvin, president of the New York State Association of Convenience Stores, said his group anticipates a 30 percent to 40 percent increase in bottle-redemption volume. The association represents 7,700 convenience stores and mini-marts throughout New York.

"A big question will be storage," Calvin said. "A lot of these stores are not big. Where do they put these bottles when they take them in? In a storage closet? In the trunk of a car? These are issues we brought up when the bill was first proposed."

Calvin said he expects some of the higher costs associated with the new law to be passed on to the consumer.

http://www.democratandchronicle.com/article/20090911/BUSINESS/909110313/1001/Area+stores+bracing+for+flood+of+water+bottles


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