Subway's Diet: Less Oil, More Recycling

By JANET ADAMY, Wall Street Journal Online

The Subway sandwich chain is testing recycling bins, switching its napkins, cutlery and plastic cups and cutting down on the gasoline used to transport its restaurant supplies in an effort to minimize the chain's impact on the environment.

The nation's largest restaurant chains have made scant progress in offering recycling for customers. No other major fast-food chain, including McDonald's Corp., Burger King Corp., Yum Brands Inc.'s KFC and Taco Bell and Wendy's International Inc., said it has recycling bins for customer trash at its restaurants in the U.S. Starbucks Corp. has recycling bins at some cafes on the East Coast, but they don't accept the chain's paper coffee cups because those can't be recycled, according to the coffee company.

Restaurants said they haven't installed recycling bins for customers because wrappers, napkins, cups and other packaging that is soiled with food is difficult, and in some cases impossible, to recycle in the U.S. McDonald's said most cities won't accept recycled material with food on it. Some food-tainted packaging can be recycled, but it is expensive to do, said Susan Daywitt, chief executive of SLM Waste & Recycling Services Inc. in Sellersville, Pa., which helped Subway create its recycling program.

Ms. Daywitt said she has talked to other chains about adding recycling bins for customers and found that their franchisees typically don't want to do it because it usually costs more. A 96-gallon container of bottles and cans costs between $18 and $25 to recycle, she said. "When you're looking at an expense side and their margins are 2%, they're going to say, 'I don't need that,' especially when it's not mandated," Ms. Daywitt said.

If Subway can make recycling bins work, it could prompt other chains to add them too. The chain, owned by Doctor's Associates Inc., has about 22,000 locations in the U.S., making it the country's largest restaurant chain as measured by units.

Subway is testing the new initiatives at a so-called "eco-store" it opened this month in Kissimmee, Fla. In addition to recycling bins, the restaurant was constructed using some recycled materials, and it uses more efficient heating and cooling systems, has plumbing systems that conserve water and uses high-efficiency lighting. Subway worked with the U.S. Green Building Council to develop the store and is planning to build others like it.

Nationally, the company has switched to napkins that use 100% recycled materials, of which 60% is post-consumer recyclable material. Recycled material can include material such as wood chips, while post-consumer recycled material is paper that has already been used by consumers. Subway estimates it will save about 147,000 trees a year. The company also switched to cutlery and plastic drinking cups made of polypropylene instead of polystyrene, which it estimates will save 13,000 barrels of oil annually because it no longer needs to use as much of that material. The chain also will save gasoline after it reconfigured a facility in Utah that keeps it from having to slice deli meat in Iowa and send it to Colorado for distribution.

The waste bin at the Kissimmee store is divided into three baskets for paper, plastic and trash. Only the plastic waste is actually recycled. The chain hasn't figured out how to recycle the paper material that has food waste on it. The company said it is dividing out that material to raise awareness about recycling. The plastic waste that is recycled in the Florida store includes plastic bottles, straws, straw wrappers, drink lids, cutlery and salad bowls. If the plastic recycling is successful in this location, Subway plans to put it in more of its restaurants.

Subway officials said when they first began looking into customer recycling, they were surprised by how difficult it is. One problem is that the regulations governing recycling vary by city. "It's not an easy job to tackle when you're looking at a chain this big," said Tina Fitzgerald, director of produce and sustainability for Subway's purchasing co-operative.