Growing a Recycling Empire with Greenstar Recycling’s Matt Delnick

May 4, 2011

JOHN SHEGERIAN: Welcome back to Green is Good, and we’re so excited and honored to have as our second guest today Matt Delnick. He’s the CEO of Greenstar Recycling. Welcome to Green is Good, Matt Delnick. MATT DELNICK: Thank you. It’s a pleasure to be here. JOHN SHEGERIAN: Hey, Matt, Mike and I the last hour have been on your website and looking at all the great things you’re doing across America. Tell us a little bit about Greenstar Recycling and how it even got started. MATT DELNICK: We arrived here in the U.S. in March of 2007. Greenstar actually as a brand began in the U.K. in Ireland. It was there for quite a period of time, and then was launched in March of 2007 here in North America, headquartered here in Houston, Texas. It left a footprint throughout North America, so we are a pure recycler, which we’re a little bit different than when we started in Greenstar Ireland and Greenstar UK, which are fully integrated waste companies. Here in the United States, we’re 100% recycling, but we started in 2007. We have 15 processing sites in North America right now. We have a national sales and service network that spans from coast to coast, over 10,000 locations served. We have a large brokerage group that we broker all of our material marketing out of, and we’ve had a lot of success in our first four years and are looking for much more. JOHN SHEGERIAN: That is awesome. We’ve got listeners not only coast to coast, but we’ve got listeners all around the world on the Clear Channel radio network, and then after the show airs it goes to the iTunes network. So, you started in Ireland the U.K. You’ve come over to America. Recycling is such an easy thing for all of us to do to be part of the green revolution and be part of the solution. What type of recycling materials do you recycle? What’s your core business? MATT DELNICK: Our core business revolves primarily around residential and commercial recycling, our main paper grades, cardboard, plastic, aluminum, steel, and glass. We focus primarily in that area at this time. JOHN SHEGERIAN: Gotcha. How does your system work? Every company has a different type of system. How does your system work in terms of fostering and encouraging people to recycle in the communities you serve? How do you then collect it? MATT DELNICK: At a grassroots level is usually how we try to start our programs, so we’re big on the education side and we’re big on finding communities that are firmly committed to sustainability. That’s what most of our research goes into. We’ve looked across our footprint. In North America, we have large single stream facilities. Our facility in San Antonio is the fourth largest in the country. Our facility in Dallas isn’t far behind that, but we also have smaller dual stream or commercial facilities throughout the United States as well. If you looked across our footprint, our sites would be very different. We are not a hauler, and so other than some commercial work in some markets, we are never a hauler of the material. We are a partner with national haulers or regional haulers around the country to bring us some material. We really try to stay pure to the processing of the recyclables. We don’t have landfills. We don’t have mills. We won’t have landfills. We won’t have mills and we do not haul, so we really try to stay pure to our philosophy, which is we want to be the biggest and best recycler processor in the country. We want to have a strong brokerage arm. We really want to stick to those things, so we do everything, to answer your question, from large, single stream facilities to medium-sized and small dual stream and commercial facilities. JOHN SHEGERIAN: So, you’re the good guys. You’re the guys helping us recycle more material. You’re the real urban miners of the modern day green revolution. Keep the stuff above ground, recycle it appropriately, keep it out from the landfills, and everybody wins. Are you the leading company in recycling, also, in Ireland the U.K. where you have your roots? MATT DELNICK: Correct. JOHN SHEGERIAN: Gotcha. So, now, come to America, do the same thing here. Matt, walk me through this a little bit. If the average American throws away 4.3 pounds of waste, and right now 54% of it approximately gets landfilled and 33% gets recycled and 13% of it gets incinerated, the trends and statistics show that over the next 10 years, we’re supposed to go inverse there. 54% of it should get recycled instead of landfilled, and landfills should go to 33%, and incineration should stay the same. Is that how you see the world? Are you going to then lead us as a country towards those numbers? MATT DELNICK: Yeah, we would probably push it a little bit farther. Our belief is probably 85+% of what you and I are throwing away today should be going to recycling of some sort, and the rest to landfills or other uses. There are examples of that, not only in Europe and in countries that are further along in recycling than the United States is, but right here in the United States, there are examples of cities that are well past the 50% mark with recycling. Our barometer we’re at is a lot higher than that. We believe that, from a sustainability standpoint, recycling should be at the core of the effort. It’s often left out right now in conversations in North America. It has an immediate impact on the environment that most people don’t understand. A program like San Antonio can be the emissions equivalent reduction of taking 130,000 cars a year off the streets of San Antonio. From our standpoint, what’s missing here in the United States is a really strong educational message around the impact of both environmentally and economically. We believe the numbers are much larger than what you spoke about and what we hear in general spoke about. We spoke about the United Nations recently, that we really need to raise the bar and we need to raise it at the local, grassroots level because it’s not getting national exposure right now. It’s not getting national legislation that’s going to mandate it. We understand that as an organization, but we take it as a challenge to say that this effort starts at the grassroots level, so that’s where Greenstar focuses its efforts. JOHN SHEGERIAN: That’s fascinating. That’s why we have you on the show today. We’re going to talk about San Antonio, of course. We want to talk about the amazing work you’ve done there. Talk a little bit to our listeners out there, both young and old, who listen, not only across the United States but across the world, why recycle? Explain. Walk us through. Why recycle? What are the benefits and why is it important to recycle? MATT DELNICK: I think that we try to sell a two-prong message. First of all, environmentally, every one of us should be recycling, and I’ll talk about the reasons for that. The other part of our message on a regular basis is that it is economically viable and sustainable too if the private and public partnerships are working properly together. We’ve proved that in San Antonio. We’ve proved that in every city that we’re operating in right now. From an environmental standpoint, if you look at any statistics that the EPA puts out, the immediate impact that can happen through recycling is huge. Really, what you’re doing is probably three things. Mainly, you’re reducing landfill emissions because much more space is being preserved in landfills. A city like San Antonio, as an example, is now diverting 100,000 tons a year of waste away from landfills. That’s going to have an immediate environmental impact on what’s not going into the landfill. Your energy consumption is reduced greatly when you recycle because the reuse of materials that are using virgin materials and paper or plastic or aluminum and so forth, you’re greatly saving energy consumption, and that’s an immediate impact on the environment. Natural resources are preserved. Greenhouse gas emissions are reduced greatly when you do these kinds of programs. Probably what’s lost sometimes that’s a benefit of recycling are right up there with hybrid cars and those things that probably in North America you get a lot more time, whether it’s on the airways or in print. Recycling is right there with those and what it can produce for the environment. The next stage of that is always the economic impact. What cities realize when they’re partnered correctly with the right private partner who has the goals of the environment and making sure that economically it works for the city and for the private businesses, what a city like San Antonio finds out is that they can get millions of dollars in revenue out of the program, in addition to avoiding landfills. So, it’s really, to us, always a two-pronged message. Both of those things can happen, and it really comes down to the commitment of the city and the private partner and the education that’s done. JOHN SHEGERIAN: So, truly, the first message is we should all be recycling. We all have to be part of the solution here, and then you educate with regards to that. The second part, just like the issues of sustainability, people, planet and profits, is hey, Mr. City Manager or Mr. Mayor, there’s a profit motive here for you as the city goes. MATT DELNICK: Yeah, there’s a revenue stream that can be generated with the right programs, and that’s probably the message that, for a long time, by folks for decades. In the U.S., the opposite message has been given, that when you recycle, it’s going to cost you more money, and it’s just not true. The reality is it’s not true. JOHN SHEGERIAN: Matt, so why don’t you walk us through, then, a great example like your great work and amazing work you’re doing in San Antonio and other cities that you service across the country? MATT DELNICK: Yeah, San Antonio is a perfect example to start with because it was really a grassroots effort. It started, as with many cities that want to begin recycling programs and be strong, it always starts with sporadic programs throughout the city. Maybe it’s a subscription. Maybe it’s dual stream, maybe it’s drop-off centers or whatever they can do. Then that city gets the momentum behind it to say, “Look, we want to be bigger than this when it comes to recycling. We want to do more. We want to find the right partner, and we want to do this.” Especially the right partner is very important at this point in time in the U.S., with so many budgetary limitations that these cities face. For us, we had the great opportunity to partner with San Antonio, and I always tell folks that work began at the commitment of the city of San Antonio, from Mayor Castro all the way down to the solid waste department, and all the way out to the citizens. There was a commitment around what the city was trying to do. Then there’s the education component. The education component needs to start well in advance of the program, actually beginning, and needs to continue throughout the program. Why are we doing it? What are we doing? What’s recyclable? What isn’t recyclable? The cleaner that stream is when it comes to the recycler, the better it is for the city and for the residents and what they’ll gain from that financially and in the environment. It’s really about someone like Greenstar saying, “Look, I’m willing to put $18 million into building a facility in your city, our capital investment, to bring recycling to the forefront of what San Antonio is trying to do.” That’s a matter of those two parties working together, and the city of San Antonio has had a very close relationship throughout the process, regular dialogue. How do we improve the program? Where does it go next? What do we do? That really, in San Antonio, has now gone past the single stream residential program, which was rolled out, and now it’s getting into multitenant single stream, and it’s getting into commercial single stream. To have that aggressive path, when we just started this just over a couple years ago, is a very aggressive stance for a city to take, to really go from residential single stream to roll out to all the other areas of the city in that short a timeframe, and get the right private partners behind it. The things you keep hearing me say there, commitment and education. Where programs aren’t successful in the United States and around the world, is where you don’t have commitment from one side or the other, maybe both sides. That’s what we look for around the country. The cities we’re in, whether it’s Des Moines and Pittsburgh and Allentown, Pennsylvania, and Dallas, Texas, and Fort Worth, Texas. We look for communities that are committed because you’ve got to have that commitment. When you have the commitment of the community, then it’s up to the private partner to step up and play a major role, which is what’s happening in San Antonio. San Antonio, as a result, has gone from 20,000 tons a month of recyclables in 2006 up to nearly 100,000 tons a year now. When you have those types of rate increases, that shows you the commitment. Through that time, and even during the commodity collapse of late 2008 and early 2009, the city had a net revenue to the city each and every year that sometimes was as low as just over a million, but sometimes as high as almost four million. So, there’s an economic impact that’s shown to the residents, and it helps the city. MIKE BRADY: It does seem, Matt, that if $18 million is a typical startup to bring a Greenstar recycling facility into a community, number one, there’s going to be an infusion of jobs as well as cash into the city coffers, and then the tax revenue for the city as well. It seems like this is something that cannot only save the city government money at the end of the year, but also creates some income for the city right from the outset. It just seems like the smart thing for any city manager or city council to look at and to implement. MATT DELNICK: Yeah, and nearly 150 new, green jobs created in the city of San Antonio. With that launch, too, we just created 50 new green jobs here in Houston with our new facility here in Houston. You’re absolutely right. The economic impact, the jobs that are created, what that does from new business in the city, and then, of course, first and foremost, what’s going to benefit the livability of the city by what you’re doing to improve the environment, the recycling program should be everywhere. Sadly enough for us in the United States, it’s growing, it certainly is, but if you really strip out yard waste and composting, what’s really being recycled. We always say that we would be really surprised if that’s barely above 10%. To answer your question earlier, when you’re talking about maybe at 10% and you should be at close to 80%, you have a long way to go. We have too many large cities that really have no substantial programs at all right now. That’s why Greenstar is here. JOHN SHEGERIAN: That’s why you’re here, because you just talked about the 70% massive opportunity between the 10 what you say we’re doing and the 80 what we should be doing, that’s the Greenstar opportunity. Speaking of Greenstar opportunity, for our listeners who just tuned in or are in front of your iPad, laptop, desktop, or somewhere where you have some visibility here, we were so lucky today to have Matt Delnick on with us. He’s the CEO of Greenstar Recycling. Look at his great website. We’re on it right now. It’s www.greenstarrecycling.com. Matt, all these cities from Allentown to Tulsa to Houston to Dallas, Oklahoma, Des Moines, Fort Worth, San Antonio, Atlanta, you’re all over right now. How big can this grow? I’m looking at the country here on your map on your great website. What’s next for you guys in terms of expansions in more cities and things of that such? MATT DELNICK: Yeah, well let’s be honest. We’re fairly tuned into the locations we’re in because even when you look at the great success of the program in San Antonio or Dallas or Austin, the different programs that we built, even when you get to the volumes and stuff that we were talking about earlier, you’re still maybe looking at a 25-30% set out rate. Even though you’ve mandated a program or rolled a program out that really becomes successful and has all the benefits we just talked about, we’re still not to the rates, even within those cities, that we should get to say that Matt Delnick as a recycling can and he’s not using it. It’s getting everyone in the community to use the cans. The city of San Antonio, as an example, has another 40-50% just in single-stream residential program that they want to increase, which tells you that even though the program is very successful, it has a long way to go just within the program that’s already rolled out. So, really, what we focus on, to be honest with you, we’re very keen on knowing the cities we’re in, knowing the shortfall of the cities at this point. In other words, what should the recycling rate be there? Most certainly have expansion plans. We have four cities right now that we’re trying to work with to start programs where there are no programs, very large cities. But, really, what can never be lost is that within the city, whether it’s me or one of my competitors that we’re in, you still have to push the recycle rates all the way up to where they should be because the success of the program should never stop. It’s got to get all the way up to the rates that you need to get to. JOHN SHEGERIAN: That’s so interesting. Even though, of course you’re going to expand, you want to keep raising the bar in all the cities you’re in, and make sure that all the rates get up to the numbers that they need to be, both for the city’s sake, our environment’s sake, and for Greenstar’s sake. MATT DELNICK: Yeah, look at the program in Des Moines or the program in Pittsburgh or the program in San Antonio. Those are great results, but the reality is you’ll probably still only have in the end maybe 20-25% participation in those cities, so you still have 70-80% of the people that still are not fully participating. The growth within these markets, including San Antonio, is still there, beyond all the other things with commercial and all the other wonderful things that you can do in the city. JOHN SHEGERIAN: That is so interesting. Does a lot of your information and knowledge base, when you’re making decisions to both educate and encourage folks in the cities that you service to recycle, but also when you’re looking at new cities to move into, does a lot of it come from the historical information you’ve learned and gathered from your success in Ireland and in the U.K.? MATT DELNICK: Yeah, from a grassroots effort and how you go about getting momentum behind the program, we certainly took a lot of gains away from what those groups had gone through. What we’ve done here to build on that is really try to have as many conversations with many municipalities all around the country to find out where the commitment is. What are the communities that are truly committed to building a program? We’ve been very fortunate to partner with some outstanding communities that are really committed to it, but really, that’s the piece we try to build onto what we’ve already learned. Let’s take away what we’ve learned, and now let’s go find where the commitment is at. That’s the ongoing challenge that we have every single day, is to go find the next group of cities that are committed. JOHN SHEGERIAN: We’re down to the last four minutes or so. Part of what we do at this show, Matt, and what we ask our guests to do, is help empower our listeners, wherever they are, to get involved, whatever that means, because everyone can be part of the solution here. How can our listeners encourage their local leaders or government officials to initiate a recycling program and to get Greenstar to their city? MATT DELNICK: Absolutely. We actually work directly with citizens to do exactly what you’re saying, and that is really put together petitions and put together movements to take to their local councils to say, “This is what we want to do. We want a recycling program. Here’s the type of recycling program we want. Here’s how we want to grow the program,” and at a grassroots level, go to their local politicians, typically their city councils and their mayors, and say, “Why aren’t we recycling? Here’s the position of 400 people in this area that want a recycling program.” In most cities, if they have that kind of grassroots effort coming to the council, they will respond. Our sponsorship with the Houston Dynamo, a very large part of it is to have the message of recycling out there for as many citizens in North America to see, and then to use that message to then go into the local community and say, “Here’s how you can go about getting a recycling program done in your city.” We actually assist people from start to finish on doing exactly that. JOHN SHEGERIAN: So, how do we encourage our listeners? Do they go on your website and e-mail someone from the website, or do they call into Greenstar Recycling? How do we encourage our listeners to get empowered and actually take action after they’ve listened to this show? MATT DELNICK: They can do any of those things. There’s links on the website where they can contact someone directly via e-mail. The numbers of all of our locations are out there, if they’re in or around our locations and they don’t have a program, they can certainly call directly into that location, and our local general managers can absolutely help them with that. They can call into our national sales folks and do the same type of thing, so a lot of different ways through our website to get right to the people that you need to get to in order to get the assistance and getting a recycling program rolled out. JOHN SHEGERIAN: That’s awesome. Matt, we’re down to the last two minutes or so. We get a lot of e-mails, Mike and I do, about how do we become the next Matt Delnick? Tell us a little bit, in the last couple minutes, share some pearls of wisdom from your journey, and what you can share with our students out there that want to really be the next leaders and run the next Greenstar Recycling or other companies like Greenstar Recycling. MATT DELNICK: We talk a lot at Greenstar about passion. You really want to find what it is you’re passionate about. Sometimes it’s a business for some people and sometimes it’s not, but I think what we have at Greenstar that we talk about a lot, to answer that question, is are you passionate about what you’re doing. When you’re passionate about what you’re doing, are you doing the right due diligence, and are you doing the right research, and are you doing all the right things to then drive whatever your business is that you want to drive? For us, we’ve got a body of people that are 100% around the power of recycling and what that means, what it needs to be in North America. We’re very diligent about making sure that we stay true to the message and what the importance of recycling is, and we’re very passionate about it. It’s what we want to do. It’s why everyone is here. My main message to everyone is you have to be passionate about it, and then you got to go about the right path about making yourself successful. When you do that, to me, it all starts to motivate you. JOHN SHEGERIAN: Matt, you’re just amazing. Mike and I are now passionate about Greenstar Recycling. For our listeners out there, please go to Matt’s great website, greenstarrecycling.com. Get involved, get empowered, get some help to bring recycling to your community, or if you’re already in a community that Greenstar Recycling services, get more involved and get our recycling rates up. Matt Delnick, you’re one of the leading entrepreneurs and eco-preneurs in the sustainability revolution, and truly living proof that green is good.