California’s SB 54 Packaging Law Is a Warning Sign for Restaurants

Recently, the California Restaurant Association sent operators an alert about SB 54 — California’s new packaging responsibility law.

Judging by the conversations I’ve had since, most restaurant operators are asking the same question: “Wait… does this apply to me?” The honest answer is:

Maybe.

I think the bigger story is what this law signals about where the restaurant industry is heading. Because whether or not your restaurant is ultimately considered a “producer” under SB 54, one thing is becoming very clear:

Packaging costs, compliance expectations, and operational pressure are all moving in one direction. The restaurants that adapt best probably won’t be the biggest ones.

They’ll be the ones paying attention.

What Is SB 54?

SB 54 is California’s Plastic Pollution Prevention and Packaging Producer Responsibility Act. In simple terms, California is shifting responsibility for packaging waste upstream.

The idea is: If a company puts packaging into the market, they should help fund the environmental impact, recycling infrastructure, and waste reduction efforts tied to that packaging.

The law focuses on:

• Single-use packaging

• Plastic food service ware

• Recyclability and compostability

• Packaging reduction

• Producer-funded recycling systems

Recently, CalRecycle released a screening tool to help businesses determine whether they qualify as a “producer” under the law. It clarified some things while also showing that there’s still gray area for restaurants.

The law appears primarily aimed at:

• manufacturers,

• importers,

• trademark owners,

• and companies placing packaged goods into the California market.

For many independent restaurants using standard distributor packaging, responsibility may still fall primarily on manufacturers or suppliers upstream.

But restaurants using heavily branded packaging, private-label products, or custom packaging systems may be moving closer into that conversation.

At this point, there still doesn’t appear to be a perfectly clear answer for every restaurant model. Operationally, I think the takeaway is the same either way.

The Real Impact of SB 54 on Restaurants

Even if your restaurant never has to register as a producer itself, suppliers almost certainly will.

And when suppliers face:

• reporting requirements,

• compliance costs,

• packaging redesigns,

• recycling fees,

• or material restrictions,

those costs don’t just disappear. They get built into the price of:

• cups,

• lids,

• containers,

• utensils,

• bags,

• and boxes.

Over time, operators will likely see:

• packaging price increases,

• changing product availability,

• pressure to use recyclable or compostable materials,

• and fewer low-cost disposable options.

And if we’re being honest, packaging is already one of those expense categories that quietly gets out of control. A lot of restaurants can tell you their food cost percentage immediately. Far fewer can tell you: “What does our packaging actually cost us per order?”

Why Independents May Actually Be Positioned to Win

This is where I think independent restaurants have an advantage. Large companies usually survive industry shifts through scale.

Independents survive through adaptability.

Chains move slowly.

Everything requires approval.

Every operational adjustment takes months.

Independent operators can pivot much faster.

They can:

• simplify systems quickly,

• reduce unnecessary SKUs,

• adjust sourcing,

• test alternatives,

• and make practical operational decisions without waiting for corporate signoff.

That flexibility matters. But only if operators are thinking strategically instead of purely reactively.

A Lesson I Learned From a Pizza Restaurant

Years ago, I helped oversee the acquisition of a pizza concept in Salt Lake City. The owner had invested heavily into creating an incredible brand experience.

Imported pizza oven.

Beautiful handmade decor.

Custom finishes everywhere.

And honestly, parts of it were stunning. One of the smartest operational decisions we made was surprisingly simple: We stopped overcomplicating the packaging.

Instead of expensive custom pizza boxes, we switched to plain boxes and branded them with a stamp.

Simple.

Flexible.

Cheaper.

Easier to source.

At the time, it was mostly an operational decision.

Now, looking at laws like SB 54, I think about that decision differently.

Because the more complex and customized your packaging ecosystem becomes, the more vulnerable you become to:

• supply chain disruptions,

• cost increases,

• vendor changes,

• and potential compliance headaches.

Sometimes operational simplicity is the smarter long-term strategy. Not because branding doesn’t matter. But because adaptability matters too.

What Smaller Operators Should Be Doing Now

I don’t think independent restaurants need to panic. I do think they should start paying closer attention.

If I were advising operators right now, I’d focus on three things:

1. Track It

Understand your packaging costs.

Not vaguely.

Actually track them.

What does packaging cost:

• per order,

• per guest,

• per catering order,

• or at least as a percentage of sales

You can’t strategically manage expenses you never measure.

2. Simplify It

A lot of restaurants have quietly accumulated packaging chaos over the years.

Too many:

• cup sizes,

• lid types,

• containers,

• seasonal items,

• specialty packaging products.

Complexity creates waste.

Complexity creates ordering problems.

Complexity creates vulnerability.

The restaurants that navigate industry shifts best are usually the ones running simpler systems.

3. Avoid Unnecessary Exposure

This is where operators need to think strategically.

If custom-branded packaging truly drives meaningful value for your business, great.

But if you’re spending heavily on custom packaging that adds operational complexity without a strong return, it may be worth reconsidering.

Sometimes the smarter move is finding simpler ways to maintain brand identity:

• stamps,

• stickers,

• labels,

• inserts,

• or focusing more heavily on hospitality and guest experience instead of disposable branding.

The Bigger Leadership Lesson

I actually think SB 54 is part of a much larger trend.

The restaurant industry is becoming more operationally demanding.

Margins are tighter.

Labor is harder.

Regulations are increasing.

Consumer expectations keep evolving.

The operators who struggle most with these shifts are usually the ones stuck entirely in reaction mode.

Every new challenge feels like an emergency.

Every vendor increase feels catastrophic.

Every operational shift feels overwhelming.

Strategic operators build businesses that can adapt. That’s the difference between running a restaurant… and becoming the restaurant’s daily punching bag.

And honestly, there’s a bigger upside here too.

Less unnecessary packaging, simpler systems, and more sustainable materials are probably good for the industry long-term, and better for the environment.

That doesn’t mean operators won’t face challenges during the transition.

But I do think the restaurants that adapt thoughtfully now will be positioned well moving forward.

About the Author

Colby Behrends is the founder of Noble Restaurant Success, where he helps independent restaurant operators simplify operations, strengthen leadership systems, and build businesses that don’t depend on one person to survive.

If you’re a restaurant, café, or coffee shop operator trying to build stronger leadership systems, you can learn more about the Restaurant Rhythm framework here.