The $79 Million Glitch: How Small-Format Plastic Slips Through America’s Recycling System

Every day, millions of small plastic items, bottle caps, cosmetic containers, disposable razor handles, pharmaceutical bottles, dental floss cases, go into recycling bins across the United States. Individually, each accounts for a negligible amount of material. Collectively, they add up to a structural and economic problem for consumer brands, municipalities and the recycling facilities that process their waste.

The trouble is that almost none of these items actually gets recycled.

Conventional material recovery facilities are built to sort larger items such as soda bottles and detergent jugs. Small-format plastics routinely slip through sorting screens alongside fine debris and crushed glass, bypassing the recycling stream and either ending up in landfills or contaminating higher-value glass recovery lines. A product can be manufactured from a technically recyclable resin and still be functionally unrecyclable in practice.

That gap prompted an applied research initiative at Arizona State University’s W. P. Carey School of Business, undertaken on behalf of The Sustainability Consortium, an industry-backed nonprofit that works with retailers and manufacturers on sustainability standards. Dawud Yakubu served as the project’s presentation lead, overseeing how data on waste volumes, environmental impact, financial modeling and consumer behavior was synthesized into findings for corporate and municipal stakeholders.

The resulting analysis examined the economic, environmental and behavioral barriers to recovering small-format plastic waste, and produced recommendations aimed at helping industry close the gap between what materials can technically be recycled and what is actually recovered.

Putting a Price on the Problem

To give corporate and municipal decision-makers a benchmark, the project’s financial and environmental modeling quantified the scale of the opportunity sitting, often literally, on sorting-facility floors.

Recovering and processing targeted categories of small-format plastics represents an estimated $79.0 million in annual material value in recycled resin alone, according to the analysis. Actual value capture would depend on regional processing capacity, collection efficiency and market prices for recycled resin, but the researchers said establishing the figure was necessary to demonstrate the market’s potential to industry leaders.

On the environmental side, the analysis found that replacing virgin plastic resin with recycled content cuts associated greenhouse gas emissions by approximately 70 percent.

The project also incorporated the U.S. Environmental Protection Agency’s social cost of carbon framework, which accounts for the long-term economic costs of emissions, including effects on public health, infrastructure and agricultural productivity. By that measure, the analysis concluded, unrecovered plastic waste imposes costs on the broader economy well beyond the price of manufacturing or disposing of it.

The case for recovery, in other words, extends past the value of the raw material itself. Leaving the waste unrecovered carries its own hidden costs.

What Consumers Get Wrong

Alongside the financial and environmental modeling, the project drew on primary consumer research, a survey of 103 respondents and a set of qualitative interviews, to examine how people actually behave when disposing of packaging.

The survey found that about half of respondents, 50.0 percent, rely solely on packaging labels to judge whether an item is recyclable, while just 3.0 percent recognize that an item’s physical size affects whether automated sorting equipment can process it.

Disposal habits compound the problem. Some 28.0 percent of consumers said they detach bottle caps before throwing them away, an action that converts a recoverable bottle component into a loose, unrecoverable small-format item. And 30.0 percent named personal convenience, rather than recyclability, as their main consideration when disposing of packaging.

One finding pointed toward a possible fix. When researchers introduced financial discounts or incentives for returning empty packaging to retail locations, respondents’ stated willingness to do so rose from a low baseline to more than 70.0 percent.

Awareness campaigns alone are not enough, Yakubu concluded from the findings. Most consumers do not realize that an item’s size, not just its material, determines whether sorting machinery can process it, and some well-intentioned habits, like removing caps, work against recovery. Meaningful gains, he argued, require pairing clearer labeling with return infrastructure that is both convenient and tied to incentives.

A Roadmap for Industry

As presentation lead, Yakubu was responsible for distilling the project’s data into a narrative that senior executives and boards could act on, linking the analytical modeling to the operational and commercial realities those leaders face.

The recommendations were organized around three groups of stakeholders.

For consumer packaged goods brands, the priority is aligning packaging design with how sorting facilities actually work, including updating labels to explicitly instruct consumers to keep caps attached, and evaluating refill or multi-use models for high-margin categories such as cosmetics.

For retail and logistics operators, the project calls for category-specific return and refill programs, since high-margin beauty products require different incentive structures and take-back infrastructure than low-cost food packaging.

For municipalities and waste recyclers, it recommends targeted sortation upgrades, such as specialized optical sorters, alongside coordinated infrastructure investment to catch small items before they fall into waste chutes.

No single intervention would be sufficient on its own, according to the analysis. The roadmap instead combines updated labeling standards, tailored consumer incentives, packaging design changes and coordination across sectors.

The Sustainability Consortium’s small-format packaging initiative reflects a broader pattern in applied research: turning fragmented data on economics, environmental impact, operations and consumer behavior into recommendations that organizations can actually use.

Yakubu’s Background

Yakubu holds a Master of Business Administration from Arizona State University’s W. P. Carey School of Business, where he received the Li Family Endowment Scholarship and the W. P. Carey MBA Scholarship, a merit scholarship paired with a graduate assistantship, and served as president of the Strategic Marketing Association. He also holds a Master of Science in International Marketing and Brand Management from Lund University in Sweden, where he focused on global brand strategy, market analysis and evidence-based decision-making.

Last updated: September 10, 2026