Rewarding Consumers for Recycling Packaging: Kimberly-Clark Seeks Shared Value

Date: January 1, 2019
B5884

S A R A L. B E C K M A N
S T E F A N I E R O B I N S O N
S E R E N P E N D L E T O N – KN O L L

Rewarding Consumers for Recycling Packaging:
Kimberly-Clark Seeks Shared Value

Senior Lecturer Sara L. Beckman prepared this case study with Associate Director of the Laboratory for Manufacturing
and Sustainability (LMAS) Stefanie Robinson, Berkeley-Haas Center for Responsible Business Program Director
Seren Pendleton-Knoll, and with assistance from Case Writer Elizabeth Whalen, as the basis for class discussion rather
than to illustrate either effective or ineffective handling of an administrative situation.

Copyright © 2017-2019 by The Regents of the University of California. All rights reserved. No part of this
publication may be reproduced, stored, or transmitted in any form or by any means without the permission of the
Berkeley Haas Case Series

We are a company manufacturing
primarily disposable products.

If we’re not working to help solve waste issues,
we’re not working on the right things.

—DANI E L LOCKE, SUST AI NA BI L I T Y ST RAT E GY AND
BUSI NE SS DE VE L OPM E NT AN AL YST, K I M BE RL Y-CL ARK

As 2015 drew to a close, Kimberly-Clark Corporation celebrated its recent sustainability
achievements; by December 2015, for example, Kimberly-Clark had diverted 95.6 percent of its
manufacturing waste from landfill,1 against a goal set in 2010. At the same time, Kimberly-Clark
was looking forward to introducing its sustainability goals for 2022, the year that will also mark
the company’s 150th anniversary in business. The company’s 2022 sustainability goals extend the
zero-waste mindset to all Kimberly-Clark solid wastes, not just those produced directly by its
manufacturing operations. Specifically, the company set the goal of cumulatively diverting
150,000 metric tons of post-consumer product and packaging waste from landfills between 2016
and 2022.2

1 Kimberly-Clark 2015 Sustainability Report, “Sustainability for a Better Life”
2 Kimberly-Clark 2015 Sustainability Report, “Sustainability for a Better Life”

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KIMBERLY-CLARK FLEXIBLE FILM PACKAGING 2

Charged with helping Kimberly-Clark achieve the packaging component of that goal are two
members of the sustainability team: John Opsteen, Secondary Materials Program Leader, and
Daniel Locke, Sustainability Strategy and Business Development Analyst.

“We’d never set this type of externally facing target that has to do with the products and
packaging after consumption,” said Opsteen. “The goal was set based on a pipeline of ideas that
we believe can get us into the ballpark. We’re working to identify opportunities that create value
for the entire supply chain. It’s really an evolution from the linear mindset where you take, make,
and then dispose of things. We’re working to create a more circular business model that allows
us to recapture materials for reuse.”

Of particular interest to Opsteen and Locke are packages made of flexible plastic film, which are
wrapped around a large share of Kimberly-Clark’s products, including diapers, paper towels,
toilet paper, and feminine hygiene products, as well as similar products made by other companies.
These packages, which are made of material similar to that in plastic shopping bags, serve several
purposes. They keep the products clean during transport and on store shelves; they help market
the products, and they contain the Universal Product Code (UPC) that is scanned at the store
register.

Flexible plastic film is currently the best packaging material available to Kimberly-Clark. “From
a greenhouse gas perspective, the film is superior. It’s the lightest, most hygienic material we can
consume. Everything about it, except for its disposal, is better than the alternatives,” Opsteen
explained. The company can also package a large amount of product for a relatively low cost, in
part because a single package, which weighs about two grams, can be made with very little plastic
resin.

However, public perception of plastic shopping bags appears to be turning negative, with some
communities banning these bags. These perceptions may eventually apply to flexible film
packaging, which is one driver of Kimberly-Clark’s interest in diverting the films from landfills.
“It’s very important to Kimberly-Clark that we continue to use flexible film,” Opsteen said.
Other key motivators for the focus on flexible film packaging are its prevalence in packaging of
all kinds and the fact that very little of it is recycled.3

According to draft estimates from the Closed Loop Fund, a social impact fund, approximately 3.2
billion pounds of flexible plastic film are disposed of by households each year in the U.S. That
amount includes both film packaging and plastic shopping bags. Approximately 300 million
pounds of film enter municipal recycling facilities (MRFs) each year, but only about ten million
pounds of that film is recycled because most MRFs are not equipped to process it. The remaining
290 million pounds are landfilled.

The fact that flexible plastic film can be returned to stores for recycling presents a key
opportunity; approximately 18,000 acceptance locations now exist in the U.S.4 Stores sell the
collected film to plastics recycling companies that recycle it into film, rigid plastics, and other
products. Stores also sell film to other companies, including Virginia-based Trex, which
combines recycled film with recycled wood to produce composite lumber used in decking and
fencing.5 The Closed Loop fund estimates indicate that about 136 million pounds of flexible

3 Other teams within Kimberly-Clark are working on other ways to reach the post-consumer waste-diversion goal.
4 2013 National Postconsumer Plastic Bag & Film Recycling Report, prepared by Moore Recycling Associates Inc. for
the American Chemistry Council, February 2015.

5 Trex website: http://www.trex.com/why-trex/eco-friendly-decking/

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KIMBERLY-CLARK FLEXIBLE FILM PACKAGING 3

plastic film is recycled each year, 126 million pounds through store drop-off and ten million
through MRFs, for a total recycling rate of less than four percent.6

To encourage consumers to return these films, thereby keeping them out of landfills, Opsteen and
Locke are considering developing a consumer rewards program that would increase film
recycling and allow Kimberly-Clark to track both the total amount of film returned and individual
consumer behavior. Tracking would, in turn, help the sustainability group accurately describe
goal progress to company brand leaders and the company to publicly communicate its
performance.

“At the end of the day, we’re trying to divert materials from landfills to give them a second life,”
clarified Locke. “That’s more important than tracking, but we hope to accomplish both together.”

Opsteen believes that the recovery value of the film itself is too low to fund rewards substantial
enough to encourage consumers to return films to a store. However, he also believes continued
use of the films is an important issue for other entities in the plastic-film value chain. This is
where Opsteen and Locke see opportunity: perhaps these other entities, particularly retailers, also
see enough business value in maintaining use of the films, and in the consumer data a rewards
program would collect, that they would be willing to help fund such a program.

Regardless of the form the program takes and how it’s funded, it needs to create a significant and
measurable increase in post-consumer recovery rates for Kimberly-Clark to consider it a success.

“We don’t want to go through this process of creating a platform and then have consumers not
participate in it. We’ve really got to think long and hard about what’s going to motivate and
drive a consumer to participate,” Locke said. “Then, we need to work together with key
stakeholders in the value chain to make the program as successful as possible.”

Enabling Recycling through the How2Recycle Program

The flexible film Kimberly-Clark uses to package many of its consumer products is sometimes
called single-layer polyethylene film (SLPF)7 because it does not contain layers of other
materials, such as metal foil found in some drink pouches, or adhesives.

The SLPFs act as a contaminant in most U.S. municipal recycling programs because the programs
are single-stream; that is, paper, cardboard, rigid plastic containers, and glass and plastic bottles
are collected in one bin rather than separated into different bins. The processes and equipment
now common at single-stream MRFs are not designed to handle the lightweight SLPFs, which
can wrap around sorting equipment, reduce efficiency for other recyclables, and add costs.8
Those SLPFs that come in contact with other recycled materials in single-stream bins and at
single-stream MRFs may stick to other materials, particularly if wet or affected by static
electricity. Or, they may collect nearby dirt or residues from other materials and become
extremely difficult to separate, causing contamination.

6 Calculated based on 126 million pounds out of a total of 3.2 billion pounds.
7 This term is used to ensure clarity and simplicity in this case study. It is not necessarily a term used throughout the
plastics industry.

8 2013 National Postconsumer Plastic Bag & Film Recycling Report, prepared by Moore Recycling Associates Inc. for
the American Chemistry Council, February 2015.

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KIMBERLY-CLARK FLEXIBLE FILM PACKAGING 4

“The quality and the cleanliness of the film after passing through a single-stream process
immediately present challenges to its reuse and recyclability,” said Opsteen. “Even if single-
stream MRFs did modify their assets to not treat the film as a contaminant, and they were actually
able to pull it through the system, the film would have to be cleaned.” Indeed, film collected
through curbside programs has historically had far less scrap value than bags and films collected
at retail stores, which are largely free of contaminants.9

As a result, most single-stream MRFs do not accept SLPFs, leaving consumers with two options:
throw the films away or deposit them in collection bins at retail locations. These bins, often
located near the store’s entrance, are also designed to accept plastic shopping bags.

To make consumers aware of the store drop-off option, Kimberly-Clark has partnered with
How2Recycle, an initiative of the Sustainable Packaging Coalition (SPC),10 which is led by
environmental nonprofit GreenBlue. How2Recycle has developed standardized labels that its
brand members may put on packaging. The labels show consumers 1) how to prepare a package
for recycling, 2) whether and how the package can be recycled, 3) the recyclable material, and 4)
to which part of the package the label applies. For example, for SLPFs, the top part of the label
says “Recycle if Clean & Dry.” The next part of the label, which includes the international
recycling symbol of three arrows in a triangle, says “Store Drop-Off” for SLPFs. (For widely
recyclable packaging, the symbol includes no additional text.) The third part of the label on
SLPFs reads “Plastic,” and the fourth part says “Wrap.”11 Running down the right side of the
rectangular label is “how2recycle.info,” to encourage consumers to visit the How2Recycle
website. (See Exhibit 1 for examples of How2Recycle labels.) The website also includes a store
locating function to allow consumers to easily identify nearby retail locations that accept SLPFs.

How2Recycle developed its labels to reduce confusion among consumers about what is and is not
recyclable because this tends to vary from community to community. It also developed the labels
to follow the Federal Trade Commission (FTC) Green Guides, which help marketers “avoid
making environmental marketing claims that are unfair or deceptive” under the FTC Act.12 If, for
example, the How2Recycle label indicates the packaging is widely recyclable, at least 60 percent
of Americans can recycle it through curbside or drop-off recycling programs.

Plastic films with the “Store Drop-off” label must meet recyclability criteria. Some Kimberly-
Clark products, such as wet wipes, require moisture-barrier characteristics in the plastic film that
currently render the packages non-recyclable.13 Therefore, the How2Recycle label on packages
like these should contain a line through the recycling symbol directing consumers to throw away
the package.

Kimberly-Clark pays an annual licensing fee to How2Recycle to use the labels. How2Recycle
members may choose to place the labels on all or just a portion of their product packaging.
Kimberly-Clark currently puts the label on most of its products, approximately 900 of them, and

9 2013 National Postconsumer Plastic Bag & Film Recycling Report, prepared by Moore Recycling Associates Inc. for
the American Chemistry Council, February 2015.

10 The coalition consists of member companies throughout the packaging supply chain, including waste management
companies. Not all members of the coalition participate in the How2Recycle program.

11 Some packages, such as a paper box wrapped in plastic, contain multiple components; these packages will have a
How2Recycle label with information for each component.

12 https://www.ftc.gov/sites/default/files/attachments/press-releases/ftc-issues-revised-green-guides/greenguides.pdf
13 If Kimberly-Clark developed a new film with the necessary moisture-barrier properties that is recyclable, that would
fall under the third prong of the product and packaging post-consumer waste-reduction goal, which is explained in the
“Kimberly-Clark’s Packaging Sustainability Goal” section.

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https://non-recyclable.13

KIMBERLY-CLARK FLEXIBLE FILM PACKAGING 5

the majority of its retail-facing products are wrapped in plastic film.

Prior to establishing its partnership with How2Recycle in 2014, Kimberly-Clark had an
agreement with another recycling labeling and collection program. That program tracked return
rates because it required consumers to mail in the packaging. Kimberly-Clark chose to switch to
How2Recycle because the previous program’s annual price was high relative to the participation
rate. “Our return on investment was low even though there were a lot of touch points for the
previous program. There was a lot of social media buzz, et cetera, but we weren’t getting the
number of packages back that we were hoping,” elaborated Kathleen Gauger, a member of
Kimberly-Clark’s North American consumer packaging team who oversees the company’s
relationship with How2Recycle.

Through the previous program, consumers got a credit of approximately two cents for each
Kimberly-Clark package returned that would go to a charity of their choice. Kimberly-Clark paid
for those credits, but “the scope and efficacy of the program needed improvements. Due to this,
Kimberly-Clark decided to search for alternative programs with a more holistic approach,” said
Becky Walter, a research and engineering leader and sustainability champion at Kimberly-Clark.

Another issue with the previous program was that the labels did not apply to materials the
program did not accept. The How2Recycle labels can go on a wide range of products. “It
reaches all the material types used in packaging, and it is based against industry and nationwide
studies to say what different collection agencies can take or not. It helps consumers know what
can go in this stream and what should not go in this stream,” Gauger said. “And it even has the
logo to say not to recycle certain materials because they are not compatible.”

Raising Consumer Awareness

Since February 2012, consumers visiting how2recycle.info have had the option to take a survey
about the label, their recycling behavior, and their perceptions of brands using the How2Recycle
label. Between the survey’s launch and January 31, 2016, 1,900 responses to the survey have
been recorded.14 Seventy-two percent of respondents indicated they found out about
How2Recycle by seeing the label on a package. Half of the total respondents said they had
changed their behavior based on the label or website, and of these, 46 percent said the change was
dropping off a plastic bag or film at a store for recycling. Between early 2014 and early 2016,
320 total respondents indicated they have started recycling plastic bags and films as a result of the
How2Recycle label.

Of those survey respondents who saw the label on a product, 77 percent said they had a more
positive impression of the brand making the product as a result; 18 percent said their impression
of the brand remained the same. Between July 2015 and January 2016, the number of
respondents indicating they had seen the label on a Kimberly-Clark product increased 70 percent.
How2Recycle generally attributes these increases to a brand adding the How2Recycle label to
more of its products or to an increase in the volume of the brand’s How2Recycle-labeled products
in the marketplace. (See Exhibit 2 for more data on responses to the survey, including the
number of respondents for each question.)

To Kelly Cramer, senior manager at the SPC and leader of the How2Recycle program, the survey
results indicate the large potential to increase recycling by educating consumers. “People don’t

14 How2Recycle Consumer Survey Report, March 2016.

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https://recorded.14

KIMBERLY-CLARK FLEXIBLE FILM PACKAGING 6

realize that they can recycle the films at the store, but they are realizing that more and more
because of the How2Recycle label,” she said. Anecdotally, Cramer has also found that people are
pleasantly surprised to discover, through the label, that they can recycle plastic film packaging
along with plastic bags. “The label itself is such a powerful education tool,” she added. “It is the
main piece when it comes to education, and it does a lot. We’re packing a lot of information
about packaging recyclability into a simple and elegant label design.”

Still, she believes that other entities in the packaging supply chain have a role to play in
education. “I think that retailers could make their signage clearer about what they accept, and I
think that signage could be more uniform,” she explained. “Sometimes people are confused if it
just says it accepts plastic bags. Sometimes, they want confirmation that it’s definitely OK to put
a toilet paper wrap or similar plastic wrap in the bin.” At other times, consumers are unsure what
to do if a bin appears full; Cramer thinks it would be helpful to have a sticker on the bin that says
consumers can indeed pack in additional films.

“One critical way that brands can increase the impact of the How2Recycle label is by putting it in
a prominent place on a package, which I see Kimberly-Clark doing,” Cramer said. “On
Cottonelle, for example, the How2Recycle label is on the back of the package next to all the other
consumer information that one would read.” She also notes that Kimberly-Clark uses
How2Recycle labels that exceed minimum size requirements and prints them using a process that
makes the text sharp and easy to read.

“There are also a lot of opportunities online, through social media and digital media storytelling,
to let people know this is something you can do,” she continued. “If I were in the position of a
brand company, I would scream about the store drop-off label from the rooftops because I didn’t
even know plastic film packaging was recyclable until I worked at GreenBlue.”

Going from Education to Behavior Change

Cramer recently learned about a three-step behavior-change model developed by B.J. Fogg: 1) get
specific about the behavior you want, 2) make it easy and remove obstacles to the target behavior,
and 3) trigger the behavior.15

“We think the How2Recycle label fits into all three of those pieces,” Cramer said. “We want
people to recycle, so we tell them exactly how. We make it really easy for people to look at the
label and know what to do, and since no behavior happens without a trigger, I think it really helps
consumers to have that label on package to remind them to recycle.”

To date, Kimberly-Clark has not added promotional information to its product packaging
specifically telling consumers that the How2Recycle label has been added to the package. “That
would compete with other messages on pack, such as the different features of the product,”
Gauger said.

The company also has not run advertising campaigns specifically telling consumers that the
How2Recycle label is on its products. “Packaging is not the primary reason consumers buy our
products,” added Walter. Therefore, she doubts the company would feature information about
packaging sustainability in its advertising campaigns. But, Kimberly-Clark might use other
channels, such as its website or its annual sustainability report, which featured the program in

15 The Fogg Method, http://www.foggmethod.com/

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https://behavior.15

KIMBERLY-CLARK FLEXIBLE FILM PACKAGING 7

2016,16 to publicize the How2Recycle program.

Kimberly-Clark is one of many well-known brands participating in the How2Recycle program;
others include Walmart, Wegmans,17 Coca-Cola, Kellogg’s, Clorox, and Verizon. According to
Opsteen, many of the participating companies that use SLPFs are exploring how to support SLPF
recycling, and retailers in particular are educating consumers about SLPF recycling. To his
knowledge, however, Kimberly-Clark is the only How2Recycle participant seeking to incentivize
consumer behavior change with respect to SLPFs.

The Market for Recycled Plastic Film

After SLPFs are deposited into store collection bins, the retailer bales them and sells them to a
commercial recycler or to a company like Trex, the composite lumber maker. Many retailers also
bale and sell other waste, including stretch film wrapped around pallets of goods and corrugated
paperboard, so a collection process and return infrastructure already exist for post-consumer
films. Some retailers separate stretch film from dropped-off bags and packages; some do not.

Buyers of SLPFs include Novolex, a company headquartered in Hartsville, South Carolina that
produces a variety of packaging products, including paper and plastic bags. Novolex has two
plastic-film recycling facilities of its own and contracts with other recycling facilities around the
U.S.

Novolex’s owned facilities are currently operating at maximum capacity and unable to accept
additional film input, according to Phil Rozenski, Senior Director of Sustainability for Novolex.
In addition, each facility processes a different input stream of film. One processes primarily post-
consumer shopping bags returned to grocery stores. The other processes plastic films
individually wrapped around apparel items, such as sweaters, that are shipped from overseas
factories to shopping malls. Store workers remove these films before displaying the apparel on
racks and shelves.18 The contamination in each stream differs: for shopping bags, the primary
contaminant is receipts; for apparel wraps, it is labels and the adhesives that attach the labels to
the bags. Removing these contaminants requires different processes, and matching the input
stream to the facility’s contaminant-removal process increases efficiency.

Total capacity in the U.S. is slowly growing. According to Rozenski, one or two new facilities
that process plastic films come on line each year. Support for film recycling is also coming from
other sources. For example, the Closed Loop Foundation19 recently partnered with SC Johnson,
maker of Ziploc bags, to award $300,000 in grant money to two recycling companies for …