Remanufacturing Consumer Products with Clover Technologies’ Rich Fischer

November 29, 2013

JOHN SHEGERIAN: Welcome back to Green is Good, and we’re so honored to have with us today Rich Fischer. He’s the General Council and Chief Sustainability Officer for Clover Holdings. Welcome to Green is Good, Rich. RICH FISCHER: Yeah, it’s great to be here. Thank you. JOHN SHEGERIAN: Hey. You know, Rich, before we get into talking about all the great things Clover Technologies and Evolve Recycling does, can you share a little bit about how you ended up the General Council and the Chief Sustainability Officer of this great holding company? RICH FISCHER: Yeah, I’d be happy to. I’ve been a lawyer for maybe 20, 25 years and during that time, spent most of time, the first 10 years working in big firms and then the second 10 years working in big corporations and one of my stops was at a company I think a lot of folks have heard of, Sears Holdings, where I wound up there. My role was Deputy General Counsel and the Chief Compliance Officer and during my time there, all the corporate sustainability programs and the public stakeholder activities sort of came under my watch and so I sort of became the de facto sustainability and corporate responsibility guy during my tenure there and after I left, I kind of packed that away and so I thought I’d never use it again and went back to just being a pure lawyer and eventually, Clover became a client of mine in a firm of my own that I started and as I spent more time with them, I realized that more of my experience in simply the legal lined up and eventually I joined Clover as the General Counsel and as the Chief Sustainability Officer, largely because of my experience dealing with sustainability issues and global footprint, which I acquired in my travels. JOHN SHEGERIAN: Got it. Thank you for that and it’s such a great company and I want you to share that story now. So, who is Clover? For our listeners out there, and of course, I’ve had the great luck and good fortune to meet with your CEO. We’ve done business together and I’m already biased and also truth in advertising but it’s such an important story and you guys have gotten quietly so big. Can you talk a little bit about Clover Technologies Group and what your core business is? RICH FISCHER: Sure. Clover Technologies Group is, I think fairly, the biggest company you’ve never heard of and that is because we don’t go to the consumer market as Clover. Essentially, what we do is we support businesses. We’re essentially in the remanufacturing and refurbishment space. We provide remanufactured products that work just as well as sort of the original remanufacture products to folks who then sell them under their own brand names. One of our biggest sectors is in imaging supplies. We remanufacture ink and laser printer cartridges globally and we then provide them to folks who sell them through their big box retailers or through their direct business distributions. Pretty much all the big names that you’ve heard out there in the office big box space and in the office supply distribution space are customers of ours and we have significant operations in North America, South America, in Europe and in Asia. JOHN SHEGERIAN: That’s great, and for our listeners who want to follow along, I’m on my iPad right now and I’m looking at one of your two great websites. I’m looking at your core website, CloverTech.com. For our listeners that want to go and engage, it’s CloverTech.com and also you have EvolveRecycling.com. We’ll talk a little bit about those in a little while. Can you share, since you are the CSO, the Chief Sustainability Officer, Rich, can you talk a little bit about your environmental sustainability efforts at Clover? RICH FISCHER: Yes. Obviously, there’s two aspects to it. One is that we essentially offer an environmentally sustainable solution in our products and by that I mean that there are hundreds of millions of printer cartridges that are sold each year and 90% of those are discarded once they’re empty. They go into landfills. What we do is we try and divert those from the landfills and extend their useful life. We collect the cartridges. We collect the cartridges. We clean them up and replace any parts that need replacing. We then refill and resell them and refill and reseal them, excuse me, and then we put them back out into the market where they become an environmentally superior alternative to buying another original manufacture cartridge. Our cartridges are significantly less expensive. We have them third party tested to make sure that they perform at least as well as the original manufacturer’s cartridge and they help essentially avoid, not only millions and millions of tons of plastic going into the landfills, but all the extra energy and resources that are involved in creating a cartridge from new. JOHN SHEGERIAN: Got it, and let’s go back to the base issue of how your company and why your company even exists. Why don’t more people just naturally recycle their cartridges anyway? RICH FISCHER: I think it’s because it’s difficult and inconvenient for them to do it. If you think about ink cartridges, they’re so small. They sort of become just another piece of clutter around the house and so it becomes a matter of the convenience versus the perceived burden. At least with a laser cartridge, which is bigger and bulkier, it might be 10 inches, 12 inches long, weigh a couple of pounds, you have the sense that this is something that’s going to take up a lot of room if it goes into a landfill so folks are more motivated to do the recycling there. On the inkjet side, they’re so small I think people do the calculation of convenience versus impact on the environment in their head and very often, it’s just easier for them to discard it with the office or the household waste. JOHN SHEGERIAN: So, the secret sauce, if I get this right, for your company is you’ve made it convenient for people to recycle their cartridges? RICH FISCHER: Well, we sure try. We try and overcome that obstacle to recycling in a couple different ways. First of all, every cartridge we send out, every cartridge we sell has within the box a bag that you can slip the cartridge into and it’s postage prepaid for it to come back to us once it’s empty so for folks who are sort of in the recycling habit, it’s very easy when you buy your new cartridge to simply slip the old cartridge into that bag, drop it into your mailbox on your way to work and it’ll find its way back to us. For people who are dealing in bigger quantities of cartridges or who save them up, we also put in store recycling programs at all of our retail customers where folks can kind of walk in and when they’re going back in to buy their replacement cartridges, they can just bring their old ones, drop it in the bin. Same theory, it all gets aggregated and collected and brought back to us and then we go ahead and clean them up and reuse them and get them back out in the marketplace. JOHN SHEGERIAN: So, this is not only part of the recycling trend that’s continuing to grow? This is part of the urban mining trend. There’s no reason to throw cartridges out in the trash anymore and into our landfills, fill up the landfills. There’s value to these cartridges. Keep them above ground. They go to great companies and leading brands like yours. You recycle them. The environment wins. The consumer wins and more jobs are created with companies like yours that continue to grow. RICH FISCHER: That’s exactly right. That’s why you’re starting to see the vocabulary change a little bit and people are starting to talk about reuse or repurposing as being superior to recycling. Recycling is part of the landscape now, no pun intended, and now the real gains are to be made in finding those opportunities for reuse and repurposing, which essentially avoids the breaking down of materials to start with. JOHN SHEGERIAN: Take it from the benefits to the general consumer. How do businesses engage with your company then? What is that proposition to a business? RICH FISCHER: Businesses can engage with our company sort of on both ends. First, our products are widely accessible, as I said, through the private labeled brands of most every big box retailer and major office supply distributor out there so they can buy our products with the security that they’ll function just as well as the OEM and with significant price savings. It’ll vary depending on what your outlet is but you’ll pay somewhere between 20 and 35% less for a cartridge that functions just the same so that’s a good way for folks that are trying to control expenses, which is kind of something you’ll always have to do. The other way to engage is sort of on the output side, which is that you can monetize those empty cartridges that you have left so not only have you essentially saved 20 to 35% when you acquire your cartridge but then you can go ahead and get several additional dollars per cartridge on the backside by recycling them through our Evolve Recycling program, which essentially, is set up to allow businesses to create accounts with us where they sort of identify themselves as the ABC Corporation and then we keep track of every cartridge that the ABC Corporation sends in and then we write them a check monthly. JOHN SHEGERIAN: Got it. So, wait a second. Back when the whole sustainability revolution was starting to take off and being green was starting to pick up a little steam, there was a rap on the industry that being green costs money. You proposition is not only do we keep the environment cleaner and not only do we keep the ecosystem working more sustainably but it’s not more expensive to do the green thing. In fact, it can be actually economically beneficial to do the green thing? RICH FISCHER: That’s the distinction between recycling and reuse and repurposing because you’re right because recycling is sort of a cost burden someone takes on to do the right thing to sort of assume the externality to avoid the environmental degradation whereas reuse and repurposing is actually something that’s economically generative. It adds value. It creates value. JOHN SHEGERIAN: Got it, and are there brands that you specifically look for and are there specific brands of cartridges that you would rather collect and not collect or how does that work? RICH FISCHER: Now we’re actually agnostic to it because we manufacture across all the brands. We support all the printer models that are out there so we have a use for pretty much every cartridge that comes in. It doesn’t matter what brand. We’re agnostic as to that and that’s one of the things that, I think, that is distinct from the OEM programs is that we take the cartridges in no matter what the brand is. We pay you for them and we reuse them. JOHN SHEGERIAN: Let’s focus on that. I’m sorry. I interrupted but I want to focus on that reuse because most of our listeners still don’t get that part. What do you mean by reuse and actually walk us through that process. Someone has an old cartridge. They send it to you. Take us through your ecosystem at Clover and at Evolve. RICH FISCHER: Sure. So, the cartridge comes back into us and actually, millions of cartridges come into us and the first things we do that’s different from the OEM is that we pay for it so we’ve given you value for what you’ve given us because it’s valuable. Once we have it, we go ahead and we essentially process it. We check its condition to make sure there are no parts that are broken and then we go ahead and open it up. We clean it out and then there are tiny little replacement parts that are in all inkjet and laser cartridges. We replace any parts that need to be replaced. Then we put in new ink or new toner, depending on what kind of cartridge it is, seal it back up and voila, you have a new product ready for resale to the consumer or to the business that they can then take and put in their printer and in the process of doing that, you’ve avoided doing what the other recycling programs do, which is essentially taking the cartridges and grinding them and generating plastic pellets or plastic waste. We basically put over 90%, of the cartridges we receive back into the marketplace as new products. JOHN SHEGERIAN: Obviously, I know the answer but is there a difference with regards to remanufacture versus brand new cartridges and are all remanufactured cartridges created equal? RICH FISCHER: Well, let’s answer the first question first. If there is a difference in functionality between Clover cartridges and the original manufacturers, it would be that ours might last longer or print better and the reason I say that is that we always have to meet or exceed the OEM specifications. We test all our cartridges to make sure that they print at least as many pages, that they print at least as consistently, that the quality of the image is as good or better than the OEM because we need to do that in order to compete in the marketplace. The question about whether all remanufactured cartridges are created equal, clearly they’re not and you can see that. There are a ton of cartridges that you can buy on the internet that were built under inconsistent quality standards halfway across the world and then are imported and sometimes you can find them at just remarkably ridiculously cheap prices but you get what you pay for because it’s a no name brand and you put it in the machine and it goes ahead and it streaks or it doesn’t work or it clogs. All of the Clover cartridges are manufactured in ISO-certified manufacturing facilities. You couldn’t tell the difference between one of our manufacturing facilities and that of an OEM so we deliver the quality but there’s a lot of non-bargains out there. JOHN SHEGERIAN: So, really, it pays to go green because not only is the quality there but there’s a cost benefit to the whole thing. Plus, you’re keeping the environment cleaner by supporting a company like yours because you’re taking mostly old cartridges and recycling them for reuse purposes. RICH FISCHER: Yes. That’s absolutely true. JOHN SHEGERIAN: What a great story. We have about a minute left. Are you the biggest in this sector in the world? RICH FISCHER: Yes, we are. We are the biggest. It was a cottage industry back in the mid 90s but typical of any industry segment that sort of matures, you have some consolidation. You have winners and you have losers and we have over time developed the biggest footprint both in North America and globally. JOHN SHEGERIAN: Last minute. Please share anything you’d like with our listeners with regards to your brands and the importance to recycle and reuse. RICH FISCHER: I just think this is the wave of the future. You’re going to see this in more asset classes. People are becoming more savvy to the fact that assets are being treated as disposable, whether in business or in their personal life, be it printer cartridges, cell phones, tablets, whatever. These assets actually have significant residual values and as people become more focused on getting the full bang for their buck, I think that businesses like ours are the wave of the future. JOHN SHEGERIAN: Hey, and I agree with you and for our listeners out there that want to be a part of the future, CloverTech.com, EvolveRecycling.com. Rich Fischer, you are an inspirational sustainability leader and truly living proof that green is good. RICH FISCHER: Thank you, John.