Wednesday, February 22, 2017

26-year-old New Yorker getting rich from scavenging cans

Aaron Elstein reports for Crain's New York:

Conrad Cutler drives a Porsche Macan, which seems fitting considering the 26-year-old entrepreneur has made his money one can—and bottle—at a time.
Less than five years out of college, Cutler runs Galvanize Group, a four-year-old business that generates almost $10 million in annual revenue from collecting recyclable cans and bottles around the city and returning them to the distributors, who pay the 5-cent deposit plus a state-mandated 3.5-cent handling fee for each one.

In the winter about 1 million empty containers of Coke, Poland Spring and other beverages consumed in the city are sorted weekly by about 35 full-time employees at his Mount Vernon warehouse. Volume doubles during the warmer months, when New Yorkers tend to consume more cold drinks, so he keeps his shop open 24 hours in the summer.
“My friends make fun of me, saying I go through people’s garbage for a living,” said Cutler, whose company processes about 110 mil
llion empty bottles and cans every year.
Cutler’s pals may mock him, but to city officials, his bustling business is no laughing matter. In their eyes he and the collectors who supply him are undermining the municipal recycling program by seizing the most valuable items before the city can pick them up and resell them as a commodity. Metal, glass and plastic collected by sanitation department crews are routed to a private company called Sims Municipal Recycling, which has a multiyear agreement with the city to process recyclables at a Brooklyn facility.
In a trade publication in 2012, Robert Lange, a former head of the city’s Bureau of Waste Prevention, Reuse and Recycling, labeled outfits like Cutler’s a “sophisticated mob of scavenger collectives that systemically removes valuable recyclables…and leaves the worthless and costly-to-collect rest for the Department of Sanitation.”
A less harsh critic, Wayne DeFeo, an industry expert and founder of consulting firm DeFeo Associates, said Cutler operates in an “ethical gray zone.”
The controversy rests on how Cutler goes about gathering his millions of bottles and cans. Some come from large retail outlets, such as CVS stores. Most, however, are sourced via a network of 100 subcontractors who have relationships with apartment supers and property managers and give Cutler’s crews first dibs on recyclables before they’re hauled to the curb. (It’s illegal to rummage through recyclables once they’re curbside, but it’s impossible for Cutler to police that.)
DIGGING FOR ALUMINUM: Cutler gets cans and bottles from a network of 100 subcontractors. It's illegal to grab recyclables from the curb, though Cutler can't police his whole supply chain.

Bars and restaurants are less important sources, as those establishments seldom generate more than a few hundred empties per day. The largest volume comes from office buildings.
“A big tower will have thousands of people working in it and consuming two or three bottled beverages every day,” said Cutler, adding that a dedicated collector can bank up to $200 a day, which translates to 4,000 bottles or cans daily.
Plus, Cutler said, his firm helps make the city cleaner by picking up recyclables that might otherwise litter the streets. Such litter remains common even though the state has imposed a refundable nickel deposit on every bottle and can of soda or beer since 1982. (Plastic noncarbonated beverage bottles were added to the mix eight years ago.)

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