Recycling Crisis This Earth Day

“Falling prices have put the recycling industry on the scrapheap this year,” explained George Van Horn, senior analyst with IBISWorld. “It is the thirteenth biggest revenue loser in 2009, and is expected to plummet a drastic 20 percent.”

Growing at an annualized rate of 6.3 percent for the past five years to 2008, Recycling Facilities is one of the few industries in the “green sector” to observe a decline. Metal price declines combined with lower demand for recycled material are major factors impacting sales. A fall in revenue and profits may hasten consolidation between the larger industry players, such as Waste Management and Covanta. Smaller operators, more labor intensive, and without integrated waste collection and disposal activities, may be forced to exit the industry all together.

Despite the disastrous performance of recycling, four “green” industries are bucking the recession:

• Natural Products – This year, slightly more than 100 million people will regularly buy green products (or about a third of the population), more than doubling in the last two years. The sale of “green” products will expand to about $70.3 billion in 2009, representing a growth of about four percent from 2008. For food and drinks specifically, about $24 billion in sales is expected this year, representing a growth of 4.3 percent from 2008.
  For the industry’s major players, Whole Food’s and Trader Joe’s, growth is slow but still positive. Although consumer budget constraints and shifting purchases towards less-expensive products is a near-term obstacle for organic retailers, the industry will continue to expand.
• Biotechnology – This sector has grown at an average annualized rate of 10.3 percent in the past five years and about 45 percent of industry activity targets food and environmental remediation and natural resource recovery. There are an increasing number of companies within this industry looking to improve production methods, which aim to reduce some of the country’s alarming sustainability problems. Given that the U.S. ranks so highly in a number of “problematic” areas of environmental concern, the size of the nation’s biotechnology industry is considerably large compared to the rest of the world.
  The industry can expect minimal impact from the recession, as growth continues at strong pace for industry operators like Monsanto, Syngenta and Amgen. While the industry’s resilience stems from the value of the industry’s product offerings, small biotech companies will find it more difficult to get off the ground.
• Environmental Consulting – Companies have become increasingly aware of their environmental impact, both through civic interest and commercial imperatives. This has propelled the growth for environmental consultants, expanding at an annualized 7.3 percent in the past five years to $15 billion. Most prominently is the push to develop “green” energy sources to limit reliance on foreign oil and limit the country’s greenhouse gas emissions. Many companies are seeking to be ahead of the curve by establishing themselves as leaders in developing “green” technology. This has the added advantage of putting them in a position to maximize their profitability in the event of a wholesale shift in energy production.
  The industry and its major player, CH2M Hill Companies, can expect slower but positive growth during the year. Environmental consultants will not have trouble through 2009, as demand for their services remains strong despite the negative impact of the recession.
• Hydroelectric & Renewable Power Generation – this sector is the fastest growing utility in the U.S., expanding from $13.6 billion in 2002 to $19.1 billion today. Although hydroelectric capacity is not expected to change in the foreseeable future, other renewable sources – especially wind - will continue to expand as solutions to greenhouse gas issues.
  The industry will be minimally affected by the recession. Government stimulus will help to build this industry further, as actions to improve, develop, and advance renewable energy generation are being put into place. About 20 states currently have renewable energy targets and it is likely that the number of states involved will continue to expand.

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