Recycled paper products: demand greater than sales - Retailing & The Environment

Discount Store News, March 18, 1991 by Laura Liebeck

Recycled Paper Products: Demand Greater Than Sales

Consumers, retailers and manufacturers may well paint 1991 green.

From the boardroom to the bathroom, the demand for recycled paper products has prompted an onslaught of new introductions from a wide range of manufacturers.

In the office stationery category, products like writing tablets, note pads, scratch paper and file folders are appearing on retail shelves with the familiar recycle logo: the triangle of arrows. Much more is coming.

U.S. manufacturers across the country are developing product at a fairly rapid rate. However, they are constrained by inadequate supplies of post-consumer waste paper--things like old newspapers and used computer paper--a still developing collection system, adequate technology to produce the necessary quality and quantity of product in demand, and quality end product.

Some retailers are blunt in their concern about product quality and sluggish sales as many consumers shy away from paying a premium for green--as much as 15%. Any product priced above that 15% ceiling will not sell, manufacturers and retailers note.

But the fever of environmental conservation is burning hot these days and the need to offer recycled paper products, even if sales are lackluster, is seen as necessary.

Some manufacturers are rising to the occasion by offering quality guarantees. Many report in-depth and lengthy research and technological developments were necessary to create a recycled product of equal quality to virgin stock.

So far, the office supply superstores appear to have taken the lead in offering recycled product. But the nation's leading discounters, such as Kmart, Wal-Mart, Target and Venture are reportedly committed to introducing a selection of green office supplies and back-to-school products this year. Still others are investigating the category.

Franklin, Mass.-based Stuarts Department Stores, with 20 units, may add a sampling of green products during the first quarter, said stationery buyer Linda Harrison. For her customers, she said, it is not yet an issue.

A stationery buyer from a Midwest discount chain said he, too, will probably add a line of recycled paper products this year. He said his company is "real receptive to it and is encouraging buyers" to purchase green goods whenever possible.

Currently, recycled paper products for home and office use is presented as an alternative to virgin paper goods, according to sources.

"We're selling it but we're not making a big deal about it," said Todd Krasnow, vice president of Staples, California. "It's another alternative, like adding another color of paper."

"It's not a runaway, gangbusters department," Krasnow added. Staples introduced green items plus toner cartridges in August.

David Fuente, chairman of Office Depot, the nation's largest office supply superstore chain with 122 units, was much more blunt.

"It's doing terrible," he said, adding, that despite soft sales, he offers 16 feet of "green" products on a main aisle. The program was introduced in October.

OW Office Warehouse, with 27 units, introduced over 30 sku's of recycled paper products in September, in response to customer demand, said Kenneth G. Zeitlin, vice president, merchandising-office supply products. He expects future additions to the line-up.

Line expansions and product quality, a major bone of contention for many retailers, will continue improving over the coming years as demand increases and as the nation's resource recovery programs and technologies mature, sources contend.

In addition, while the price premium on recycled paper products can be as high as 15%, some vendors report that they are offering their items at the same cost as virgin product to stimulate the market.

The challenge to both retailers and manufacturers is in educating the consumer on recycled paper and helping them to understand that while many of the items perform as well as virgin paper, some do not. Recycled paper is an entirely different product in some cases and an understanding of its limitations must be learned and accepted.

For example, a writing tablet made of 100% recycled paper fibers is an excellent writing surface for ballpoint pens since it is softer than virgin paper stock, vendor sources said. But the ink bleeds through when using felt-tip pens.

Whatever the pros and cons, recycled paper products are on the rise due to growing demand both from consumers and from federal, state and local governments as a way of reducing landfill waste. The Environmental Protection Agency and other groups report that as much as 40% of landfill garbage is paper.

In 1989, 85 million tons of new paper was available for sale in the U.S. (domestic production plus imports minus exports). Of that total, 27.5 million tons was later collected as waste paper for recycled paper products, for a recovery rate of 32.4%, according to Peter Bunten, manager, recycled paperboard division of the American Paper Institute, N.Y.

The recovery rate through nine months of 1990 was averaging 35%, said Bunten.