Update: Study finds deposit return systems do not reduce beverage sales

The Container Recycling Institute (CRI), Culver City, California, and Brussels-based Reloop say they have found no definitive evidence that new or expanded beverage container deposit return systems (DRS, or bottle bills) affect beverage sales, according to a study they recently published. The organizations say this result suggests that beverage industry concerns that DRS lead to sales declines are unfounded.

According to CRI and Reloop, the study, “The Impact of Deposit Return Systems on Beverage Sales,” uses actual data from nearly a dozen DRS markets globally before and after these systems were introduced or expanded or the deposit amount was increased. GlobalData PLC served as the primary source of sales data for the case studies used in the report, with the exception of Alberta and California, where the data were obtained from system operators Alberta Beverage Container Recycling Corp. and CalRecycle, respectively, and Oregon, where data was from the Beer Institute. CRI and Reloop say this was necessary because GlobalData PLC provides sales data at the national level and not at the province or state level. When GlobalData PLC data were used, the datasets run from 2000 to 2021.

The study draws a number of conclusions:

• None of the case studies provides definitive evidence suggesting the introduction or expansion of a DRS caused a decline in beverage sales. Fluctuations in sales observed across the case studies were within the normal variation range and aligned with regional trends.
• Many complex and multifaceted factors contribute to changes in beverage sales, meaning any sales increases or decreases cannot only be attributed to DRS. According to the study, factors including seasonal temperatures, economic conditions and supply chain disruptions can independently or collectively affect the price of beverages and/or beverage sales, and a thorough examination of all variables and their effects is necessary to draw accurate conclusions.
• Some previous studies could be unreliable, especially those that used speculative approaches instead of actual historical data. CRI and Reloop say their study compiled and analyzed empirical data from established DRS markets.

“The research we conducted in this study is as complete, thorough and transparent as possible and represents experiences from all over the world over a two-decade timeframe,” CRI President Susan Collins says. “We believe the findings should set to rest the fears of beverage producers and distributors and contribute to a more informed discourse on the adoption, implementation and expansion of beverage container deposit return systems.”

Collins and Reloop CEO Clarissa Morawski say decades of data show DRS significantly increase container recycling rates, which is key to addressing plastic pollution, marine debris and the climate crisis. In addition, given the passage of recycled-content mandates in certain jurisdictions and international brands’ stated plastics reduction targets, DRS offer the most effective means to obtain more clean, high-quality materials for manufacturing new products.

They also note that beverage producers’ impact assessments often ignore the financial and compliance benefits of getting up to 90 percent of their containers back for closed-loop recycling through DRS program.

According to the study, opponents of DRS say the deposit consumers pay is akin to a consumption tax that will lead them to reduce their consumption, reducing their sales. This overlooks that, unlike taxes, deposits are temporary and fully refundable upon the return of the beverage container. “Therefore, assuming convenient and accessible redemption, consumers experience no net spending loss or gain.”

The report argues that “if we accept the premise that consumers view the deposit as a form of tax that deters their purchase, we must also recognize the potential for the refund to function as a reward or incentive, similar to a coupon, that could potentially increase sales.”

Collins and Morawski say the beverage industry overlooks other important considerations when it claims DRS create higher costs across the distribution chain, including that the costs associated with operating modernized deposit programs are at least partially offset by the revenue generated from the sale of empty beverage containers as scrap, along with unclaimed deposits. Additionally, they say significant savings can result from DRS implementation, such as reduced extended producer responsibility expenses for producers (in Europe and Canada) and lower costs for municipalities and taxpayers (because of decreased municipal recycling, disposal and litter cleanup expenses).

Reloop and CRI say the study’s findings emphasize the need for a comprehensive understanding of the complex interplay of factors affecting beverage sales and for the cautious interpretation of claims regarding the influence of DRS implementation.

“Adoption of beverage container deposit return systems is increasing rapidly across the globe to support a more circular economy, but we need more progress in the U.S.,” Collins and Morawski say. “We hope these study results reduce beverage industry resistance to DRS, enabling the introduction and expansion of programs that can get more recycled material into the supply chain while reducing litter, marine debris, energy use and carbon emissions.”

Arlington, Virginia-based Glass Packaging Institute President Scott DeFife voiced his agreement with the study's results.

“This study from our friends at CRI and Reloop provides more evidence of what we already knew: the arguments that deposit return programs negatively impact beverage sales over time are without merit,” he says. “There is ample proof that we need more bottle return programs, not fewer. It is in states’ and communities’ clear and vital interest to pass DRS legislation, especially those legislatures that are also considering extended producer responsibility programs for packaging. Curbside pickup will remain a recycling staple but must remain supported by proven recycling programs that create higher volumes of cleaner streams of recyclable material.

 “DRS reduces packaging waste, is a viable option to create cleaner recycling streams and provides a greater volume of recyclable material that will be returned across manufacturing supply chains," he continues. "Whenever possible, towns, cities and states should continue to augment curbside pickup with strong bottle deposit return systems.”

*This article was updated July 26, 2023, to include comments from DeFife.