Closed Loop Partners, L’Oréal and Other Strategic Partners Invest in California to Advance Recovery of Small-Format Plastics Ahead of Statewide Recycling Reform

Billions of small items—including select cosmetic packaging, lids, caps, coffee pods, pill bottles and more—currently slip through recycling sorting systems. Backed by industry leaders, the Smalls Consortium is building a roadmap to capture these materials as California prepares for historic EPR legislation.

Los Angeles, California, June 15, 2026 — Billions of small-format plastics currently end up in landfills each year simply because they are too small to be properly captured by traditional recycling equipment. To address this urgent challenge, Closed Loop Partners’ Center for the Circular Economy (the Closed Loop Center) today announced the next phase of its Smalls Consortium: Advancing the Recovery of SmallFormat Packaging (the Smalls Consortium), joined by founding partner L’Oréal, supporting partners Kraft Heinz and CVS Health, and strategic advisor Circular Action Alliance (CAA).

With this powerful cross-industry backing, the Smalls Consortium is focusing its field-testing efforts on California. As the state prepares for the implementation of SB 54—the historic Extended Producer Responsibility (EPR) law set to take effect on January 1, 2027—this initiative serves as a critical proving ground to help brands, recyclers, and end-markets build a scalable roadmap for capturing small rigid plastics before they are lost to waste.

“L’Oréal is helping to build the systems needed to recover, sort, process and ensure market demand for small format materials,” said Marissa McGowan, Chief Sustainability Officer, North America, L’Oréal. “As a founding member of the Smalls Consortium, we’re motivated to continue our work with Closed Loop Partners. This is both an environmental priority and a business imperative. Advancing solutions for small-format packaging is a credible path to reduce supply chain risk, strengthen EPR readiness, and secure future material supply. We encourage other companies to join us in scaling solutions that no company can solve alone.”

To trial recovery solutions in the field, the Smalls Consortium is partnering with Potential Industries, a leading recycling operator with more than 50 years of experience, four regional satellite facilities and a large regional materials recovery facility in Southern California. Potential Industries also provides glass recycling for millions of residents across Los Angeles, Long Beach, and other major cities.  

Using the Smalls Consortium’s established methodology—spanning site diligence, material characterization studies, equipment assessments, financial modeling, recovery testing and end market engagement—the initiative aims to design a scalable recovery solution. The goal is to generate realworld learnings at a California facility that can inform a broader roadmap for small-format packaging recovery across the state and other states where EPR is gaining momentum.

“As one of the longest-standing MRF operators in Southern California, we know firsthand that sortation is necessary, but without consistent viable end markets paying reasonable scrap pricing to sell to, the system is not sustainable,” says Dan Domonoske, VP of Potential Industries, Inc. “That is why Closed Loop Partners' approach that includes demand pull from end markets, is so valuable. Together, we are looking at how to improve sortation while simultaneously supporting the reprocessing and end markets that pull these materials through the supply chain. For Potential Industries, this initiative is both a practical business opportunity and an important step toward building a more resilient recycling system in California and the U.S.”

The Closed Loop Center is also collaborating with CAA, the nonprofit Producer Responsibility Organization (PRO) selected by California, Colorado, Maryland, Minnesota, Oregon and Washington to develop the EPR program plan for paper and packaging under each state’s law. Through ongoing engagement with CAA, the Closed Loop Center is sharing learnings and insights on small-format recovery to help ground this work in the realities of California’s evolving policy and producer responsibility landscape.

"The Smalls Consortium, which advances small-format recycling, offers a critical opportunity to address a complex system design challenge using practical, data-driven evidence,” says Jeff Meyers, Chief Strategy Officer at CAA. “By testing and learning together, we are building a shared understanding of what it takes to recover these materials at scale and where investments can have the greatest impact. Those field-tested insights are valuable inputs as we develop EPR program plans that are grounded in real-world conditions and designed to deliver measurable recovery outcomes.”

Taking a holistic approach, the Smalls Consortium’s work is organized around four key focus areas:

• Developing a practical, data-backed roadmap to serve as a resource for CAA and other stakeholders;

• Strengthening recycling infrastructure to capture small-format packaging curbside;

• Ensuring recovered materials can be used in new products; and

• Improving packaging design in partnership with brands and retailers.

This latest phase builds on a proven track record of four years of research, field testing, and market analysis. In 2025, the Smalls Consortium released a comprehensive report, “Small Materials With A Big Opportunity For Recovery: Unlocking A Hidden Value Stream,” which summarized key insights from recycling facilities in New York. Now, the Smalls Consortium is bringing its proven framework to California—one of the most consequential packaging policy markets in the country.

“Small-format packaging has long fallen through the cracks of the recycling system—not because it lacks value, but because recovery requires coordination across the full system,” said Kate Daly, Managing Partner at Closed Loop Partners. “When these materials go to landfill, it represents both an environmental loss and a missed economic opportunity. Over the past four years, our Smalls Consortium has built a deep understanding of the small-format packaging material stream—from infrastructure needs to end markets—and is now bringing stakeholders together in California to help build a system designed for long-term, real-world impact.”

The Smalls Consortium continues to collaborate with industry partners such as the Glass Packaging Institute (GPI), Pact Collective, and The Sustainability Consortium, all of which share a common mission to advance the recovery of small-format plastics. It has also recently joined GPI’s Small Format Coalition, with both organizations working to complement each other’s efforts in California and maximize collective impact.

The Smalls Consortium offers brands a pragmatic way to tackle complex packaging challenges—enabling proactive problem-solving and risk reduction in a rapidly evolving regulatory environment. Participation helps companies strengthen their EPR readiness by understanding how their packaging performs in the recycling system, where recovery barriers exist, and what changes may be needed across design, sortation, reprocessing, and end-market development.

Companies across the beauty, personal care, pharmacy, foodservice, retail, and beverage sectors are invited to join the Smalls Consortium to help shape this vital California-focused phase of work. To learn more, contact centerforthecirculareconomy@closedlooppartners.com.

Additional Quotes  

“Small-format packaging plays a critical role in health care, and it’s an area where we see opportunity to improve recovery, from prescription pill bottles to everyday wellness product packaging,” says Jenny McColloch, Chief Sustainability Officer & VP of Community Impact at CVS Health. “Through our work with Closed Loop Partners’ Center for the Circular Economy and the Smalls Consortium, we’re exploring practical, potentially scalable solutions in real-world conditions. As this work advances in California, these efforts can help create progress that better serves our CVS Health customers and supports a more circular future.”

“For many companies in the food and beverage industry, small-format packaging comprises a significant portion of our portfolios. We all have a responsibility to improve recovery of these plastics - but it takes the full value chain to solve this complex challenge. We're optimistic that through the Smalls Consortium, the industry will make significant advancements in reducing the amount of small-format plastics that literally fall through the cracks,” says Linda Roman, Director, R&D Packaging, Kraft Heinz.

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About Closed Loop Partners’ Center for the Circular Economy

The Closed Loop Center for the Circular Economy is part of the Closed Loop Partners family of companies. Closed Loop Partners includes Closed Loop Capital Management, the Closed Loop Center for the Circular Economy and Circular Services. The Closed Loop Center helps businesses solve their most pressing material challenges. We’re built on the principle that a world without waste is not only an environmental necessity, it’s a path to profitable growth. To learn more about how we are building the circular economy, visit closedlooppartners.com/the-center/.

About the Smalls Consortium: Advancing the Recovery of Small-Format Packaging

The Smalls Consortium, managed by Closed Loop Partners’ Center for the Circular Economy, advances circular design and increased recovery of small-format packaging across key industries including beauty, pharmacy, foodservice, beverage, retail and beyond. The Smalls Consortium brings together brands, recyclers and reclaimers to take a systems-level approach to improving recovery, strengthening end markets and supporting credible pathways for small-format packaging circularity.

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