Reducing EPR Fees: Looking Beyond the Packaging on the Shelf

California’s SB 54 will put a recurring fee on every pound of packaging you can’t use. For food and beverage companies, mitigating that cost means looking beyond the package on the shelf:

• Exposure comes from packaging across the supply chain. Primary, secondary, and tertiary packaging are all within the scope of SB 54.   
• Packaging weight impacts most fee calculations. Material, format, and plastic-specific EPR fees can significantly change the cost of different packaging components.
• One-way packaging creates recurring exposure. When new packaging is required with every shipment, its weight, associated fees, and reporting burdens repeat across annual volume. 

But EPR compliance is only one part of what packaging is costing your business. Packaging design affects how much product fits on a truck, how well stacks stay stable in transit, the amount of product damage, and how much labor is required to handle packaging throughout the operation.

Food and beverage businesses can use SB 54 as a catalyst to evaluate packaging’s full impact, leveraging packaging as a strategic operational asset rather than a consumable.

The role of primary, secondary, and tertiary packaging  

As you consider shifting to a broader view of packaging as a strategy, the immediacy of EPR fees and source reduction plans as managed under California’s Circular Action Alliance (CAA) still loom large. Let’s start by taking a look at how EPR fees impact each packaging component.

For a food or beverage company, that might include:

• Primary: The tray, carton, or film holding the product
• Secondary: The case, liner, or other packaging used around it
• Tertiary: The wrap, pallet, or other materials used to move the larger load

Many producers focus on primary packaging due to the volume involved. Many may implement lightweighting (using less material to make the same package). Others may opt to switch from plastic formats to fiber, eliminate unnecessary packaging, and/or replace formats that are difficult to recycle.

Lightweighting and material changes may be the easiest to implement, but primary packaging still has to protect the product, support shelf life, meet food-safety requirements, and hold up through transport. There comes a point when making a tray thinner or removing more material from a pouch starts to compromise performance.

Egg cartons show where the limit sits. Suppliers that pack eggs in foam cartons face a fee of $0.441 per pound. Lightweighting the foam is the obvious way to bring that number down, but a thinner carton gives eggs less cushioning.
For suppliers and vertically integrated retailers alike, that raises the risk of food loss as well as contamination of packaging resulting from the broken eggs. The source reduction plan, another requirement of SB 54, adds pressure here too, since lightweighting of a plastic material can only go so far in achieving the 10% by 2027, 20% by 2030, and 25% by 2032.

This is where sturdier secondary packaging comes in. If the outer layer absorbs more of the impact during handling and transport, the carton doesn’t have to provide all the protection by itself.

How does reusable secondary packaging offer additional opportunities to reduce EPR fees?

SB 54 doesn’t stop at the consumer-facing package. The law covers all single-use packaging, whether it’s primary, secondary, or tertiary. SB 54 also requires producers to address reduction more broadly, while focusing on single-use plastic through their source reduction plans requirements.

With or without lightweighting, reusable secondary packaging can give companies another place to reduce exposure and materials. Replacing single-use secondary packaging with a reusable system reduces the amount of new, fee-bearing packaging required for each shipment as well as reporting burdens, which can be significant given you have to report all the packaging used for the first time.

Let’s look at an example:

*CAA has now published its 2027 California Producer Fees Schedule, which producers should use for current planning. These figures are illustrative, not final, but they show why material and format need to be considered alongside weight when estimating EPR exposure.

Tertiary packaging belongs in the calculation, too

Tertiary packaging sits farther from the product, but it can still contribute to EPR exposure. Stretch wrap, straps and corner protection can all be considered as fee-incurring material under SB 54.  

Not that every tertiary component can or should be removed. Load containment and product protection still matter. But at scale, even a fraction of a pound of disposable material per pallet becomes hundreds of thousands of pounds of packaging annually. That makes tertiary packaging worth evaluating alongside primary and secondary packaging for opportunities to reduce material, redesign the load or replace single-use components with reusable alternatives. With the rigid, interlocking nature of reusables, less stretch wrap is required, and corner boards and layer pads are typically eliminated.

Circularity is where the solution lives

California’s EPR law SB 54 is intended to reduce packaging waste, pushing companies to reuse and move to circular systems. It’s a mindset shift: instead of changing every characteristic of a single-use package, how can you cut down the amount of one-way packaging being used entirely?

Corrugated cardboard, along with many other packaging materials, date back hundreds of years, when there was less concern about the environment, production was more localized, and supply chains weren’t automated. While the business case for change is clear, the ease of modernizing packaging can be murky. That’s where choosing the right circularity partner comes into play. SB 54 recognizes this, and even defines reuse requirements such as:

• Durability
• Infrastructure for safe reuse
• Repeated recovery
• Inspection and repair when necessary
• Reissuance into the supply chain

With recovery, tracking, cleaning, inspection, and redistribution part of the equation, implementation and ongoing management of reusable assets can become a distraction from a company’s core capabilities. Working with a reusable pooling partner offers access to asset infrastructure, with zero capital expenditure or headcount allocation.

Tosca supports EPR compliance and circularity         

Tosca has provided the world’s top brands with pooled reusable assets for meat, poultry, eggs, produce, bulk ingredients, prepared foods, seafood, cheese and more for over 65 years. Tosca goes beyond recovering, washing, inspection, tracking, and redistribution reusable assets. We serve as partners to our clients, working together to continuously improve their supply chain’s performance holistically, advising in areas such as EPR, automation, reverse logistics and more.

In fact, because Tosca owns the reusable assets in its pooling system, we handle the reporting associated with those assets, reducing your administrative burden, which on top of reducing EPR fees creates a significant financial benefit for your company.

Talk with Tosca about where reusable secondary packaging could fit in your supply chain, or how we can help you reduce your EPR fees.