SURAJJUNEJA IDEAS | CONCEPTS | OPPORTUNITIES

OFFICIAL.

Idea:
REVERSE "RESERVE VENDING
MACHINE”
Vending Machine
WRITTEN BY SURAJ JUNEJA
LAST UPDATED JUNE 2024

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 BUSINESS IDEA: RESERVE VENDING MACHINE

In today's world, the growing concern over plastic waste necessitates innovative solutions to
promote recycling. Imagine a business model that introduces reverse vending machines,
where individuals deposit their used or empty plastic PET bottles for recycling. This not only
facilitates efficient waste management but also incentivizes participation through rewards. By
encouraging environmentally responsible behaviour, this system offers a practical and
impactful approach to reducing plastic pollution and fostering a culture of sustainability.

A vending machine is a automated kiosk that dispenses products after a customer inserts
money and makes a selection. They are typically found in places where there is a lot of foot
traffic, such as malls, hotels and airports. The most common items sold in vending machines
are snacks, beverages, and cigarettes. However, you can find vending machines that dispense
all sorts of things, from toys to electronics to personal protective equipment.

On the other hand, a reverse vending machine is the opposite of a traditional vending
machine. Instead of dispensing products, it collects items such as used beverage containers
and dispenses rewards or money in exchange. These machines are becoming increasingly
common as a way to encourage recycling.

The plastic pollution scene in India is quite significant, though consumption rates are lower
than developed countries. Here's a breakdown:

High Generation: India is one of the top plastic waste generators globally, producing
around 34.7 lakh tonnes per year.
Low Consumption per Capita: However, India's plastic consumption per person (around
11 kg/year) is lower than the global average (28 kg).
Rapid Growth: The issue is that plastic use is rising fast due to a growing middle class and
booming economy.
Waste Management Challenges: A large portion of this plastic waste, especially low-
utility items like bags, ends up uncollected, littering streets, waterways, and harming
ecosystems.

Here in Kolkata, for instance, the Hooghly River carries a significant amount of plastic waste
to the Bay of Bengal. There are efforts underway to address this problem, including bans on
single-use plastics and initiatives to improve waste management. But it's a complex challenge
that requires ongoing attention.

The business idea here is about setting up multiple reverse vending machines in different
locations wherein people dispose their used/empty plastic pet bottles into these vending
machines, and by doing so, get rewards in the form of coupons for nearby stores, cafes,
restaurants etc. Additionally, the plastic bottles collected in these machines are being
shredded inside which then go for recycling.

This a fantastic idea, setting up reverse vending machines (RVMs) with incentive programs is a
great way to tackle plastic pollution in India for several reasons:
 Increased Recycling Rates: RVMs make recycling convenient and rewarding, encouraging
people to properly dispose of plastic bottles instead of littering.
Improved Plastic Quality: Crushed bottles take up less space and are easier to transport
for recycling, leading to higher quality recycled plastic.
Boosted Sustainability Image: Stores and cafes offering RVM coupons can enhance their
eco-friendly image and attract customers who care about the environment.

Here are some additional points to consider:

Location: Placing RVMs in high-traffic areas like malls, bus stops, or near colleges will
maximize their use. Partnering with these locations can also benefit from increased foot
traffic.
Reward System: Coupons for nearby businesses create a win-win situation, encouraging
recycling and potentially driving customers to new stores.
Collaboration: Partnerships between government agencies, NGOs, and private
companies can help with funding, installation, and maintenance of RVMs.

There are already a few Indian companies that manufacture RVMs with features like
shredding and coupon printing. While challenges like initial investment and ensuring proper
recycling infrastructure exist, the benefits of RVMs outweigh these. As awareness and
technology advance, this system can be a powerful tool in India's fight against plastic
pollution. Below is a deep dive on this particular business model:

Pros:

Environmental Impact: Reduces plastic pollution by incentivizing recycling and

improving plastic quality for further use.
Potential Profitability: Earns revenue through partnerships with stores/cafes offering
coupons on the machines, potentially attracting new customers.
Growing Market: The Indian government's push for plastic waste management and
increasing environmental awareness create a strong potential market.

Cons:

High Initial Investment: Purchasing and installing RVMs can be expensive, especially
considering the need for multiple machines.
Operational Costs: Maintenance, transportation of collected plastic, and managing
partnerships with stores/cafes require ongoing expenses.
 Public Awareness: Educating the public on using RVMs and the value of recycling is
crucial for initial adoption.

Overall Viability:

Strategic Partnerships: Securing strong partnerships with stores/cafes offering valuable

coupons in high-traffic locations is crucial. Negotiations for revenue sharing or covering
operational costs can be explored.
Government Incentives: Government initiatives promoting plastic waste management
and potentially offering subsidies for RVM deployment can significantly improve viability.
Scalability: Starting with a pilot program in a few high-traffic areas can help test the
effectiveness and refine the model before large-scale deployment.
Technology Integration: Integrating features like digital coupon delivery, real-time
machine monitoring, and user engagement apps can enhance user experience and data
collection.

Overall, this business model has good potential in India, especially with growing
environmental awareness and government support. However, careful planning, strong
partnerships, and a focus on operational efficiency will be crucial for long-term success.

There are 3 different revenue models one can leverage here. First, when you sell the branding
space (such as the screen) on these vending machine to brands. Second, when the customer
gets a coupon for a nearby store/cafe/restaurant with whom you can strike some sort of deal.
Third, when the collected plastic is shredded, sells for ₹50 rupees/kg and acts as a recurring
income stream. The real benefit is that all three revenue models can be effectively combined
to maximize the profitability of your RVM business. Let's further break down each model and
how they work together:

1. Selling Branding Space:

Model: You offer advertising space on the RVM screen to brands who require awareness.
This could be static images, short video ads, or interactive content promoting
themselves.
Benefits: Generates recurring revenue from brands seeking targeted advertising in high-
traffic locations.
Considerations: Carefully curate brands that align with your environmental goals and
user demographics. Avoid overwhelming users with excessive ads.

2. Coupon-based Revenue Sharing with Stores:

Model: Partner with nearby stores, cafes, and restaurants to offer coupons for their
products/services on the RVM. When a customer recycles a plastic bottle, they receive a
 digital or printed coupon for a discount or free item at the partner store.
Benefits: Creates a win-win situation. Customers are incentivized to recycle, and stores
attract new customers and boost sales. You can earn revenue through a pre-determined
fee per coupon issued or a revenue-sharing agreement with the stores based on
redeemed coupons.
Considerations: Negotiate fair revenue sharing deals with stores. Ensure coupons offer
attractive discounts or deals to encourage redemption.

3. Selling Recycled Plastic:

Model: Once the plastic bottles are shredded inside the RVM, you can accumulate them
and sell the plastic flakes to recycling companies. The price per kilogram (currently at
₹50) can generate additional income.
Benefits: Provides a direct financial benefit from the collected plastic waste. Contributes
to the circular economy by keeping plastic in the recycling loop.
Considerations: Fluctuations in market prices for recycled plastic can affect revenue.
Ensure you have reliable partnerships with recycling facilities that accept the shredded
plastic. Transportation and storage costs need to be factored in.

Combining These Models:

By implementing all three models simultaneously, you create a robust and sustainable
revenue stream:

Brand advertising provides a consistent income source.

Coupon partnerships incentivize recycling and generate revenue through store deals.
Selling recycled plastic offers additional income and promotes a circular economy.

By effectively combining these revenue models and focusing on user experience and
environmental impact, your RVM business can become a profitable force for good in tackling
plastic pollution in India.

Cost Breakup and Investment Recovery Period Approximation:

Here's a breakdown of the costs and potential investment recovery period for this business,
based on certain assumptions:

Initial Investment:

Machine Cost: ₹1,25,000 (single machine calculation)

Monthly Expense:

Rent: ₹20,000
Transport & Operations: ₹20,000
Total Cost: ₹40,000
Monthly Income:

· No of bottles Disposed Daily: 600-1000

· Shredding Time per 100 bottles: 1 hour

· Daily Shredding Time: (600-1000 bottles / 100 bottles/hour) = 6-10 hours

· Daily Shredded Plastic Weight: Approx. 50-60 kg/day

· Monthly Shredded Plastic Weight: Approx. 1,500-1,800 kg/month

· Advertising Revenue: ₹10,000

· Total Revenue: ₹80,000-₹1,00,000/month

Monthly Profit:

· Profit per machine: ₹90,000 (Revenue) - ₹40,000 (Cost) = ₹50,000 approx.

Investment Recovery Period Estimation (Simple Calculation):

Investment Recovery Period: ₹1,25,000 (investment) / ₹50,000 (monthly revenue from

plastic) ≈ 2.5 months

This is a simplified calculation, just to get a rough idea. A more comprehensive financial plan
should be considered.
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