A process comprising: (a) reacting a PET or PTT recycle stream selected from recycled PET or PTT carpet, PET carpet fiber, recycled PET containers, recycled PET textiles, other recycled PET or PTT articles, or mixtures thereof, with a glycol in a reactor, wherein the molar ratio of glycol to PET or PTT from the recycle stream is at least 0.8, thereby forming a digested product stream comprising polyols, and at least one undigested stream; (b) dispersing the undigested stream in the digested product stream with a mixer having a high speed, high shear impeller with a tip speed of 40 to 120 feet per second corresponding to 12.2 to 36.6 meters per second; (c) separating the digested product stream from the at least one undigested stream in a solid-liquid separation; and (d) reacting the separated digested product stream in the reactor with a hydrophobe selected from dimer fatty acids, trimer fatty acids, oleic acid, ricinoleic acid, tung oil, corn oil, canola oil, soybean oil, sunflower oil, bacterial oil, yeast oil, algae oil, castor oil, triglycerides or alkyl carboxylate esters having saturated or unsaturated C 6 -C 36 fatty acid units, saturated or unsaturated C 6 -C 36 fatty acids, alkoxylated castor oil, saturated or unsaturated C 9 -C 18 dicarboxylic acids or diols, cardanol-based products, recycled cooking oil, branched or linear C 6 -C 36 fatty alcohols, hydroxy-functional materials derived from epoxidized, ozonized, or hydroformylated fatty esters or acids, or mixtures thereof, thereby forming a polyester polyol, wherein the amount of the hydrophobe in the polyester polyol is 5 to 55 wt%, and the polyester polyol has a hydroxyl number of from 40 to 400 mg KOH/g. (a) reacting a PET or PTT recycle stream selected from recycled PET or PTT carpet, PET carpet fiber, recycled PET containers, recycled PET textiles, other recycled PET or PTT articles, or mixtures thereof, with a glycol in a reactor, wherein the molar ratio of glycol to PET or PTT from the recycle stream is at least 0.8, thereby forming a digested product stream comprising polyols, and at least one undigested stream; (b) dispersing the undigested stream in the digested product stream with a mixer having a high speed, high shear impeller with a tip speed of 40 to 120 feet per second corresponding to 12.2 to 36.6 meters per second; (c) separating the digested product stream from the at least one undigested stream in a solid-liquid separation; and (d) reacting the separated digested product stream in the reactor with a hydrophobe selected from dimer fatty acids, trimer fatty acids, oleic acid, ricinoleic acid, tung oil, corn oil, canola oil, soybean oil, sunflower oil, bacterial oil, yeast oil, algae oil, castor oil, triglycerides or alkyl carboxylate esters having saturated or unsaturated C 6 -C 36 fatty acid units, saturated or unsaturated C 6 -C 36 fatty acids, alkoxylated castor oil, saturated or unsaturated C 9 -C 18 dicarboxylic acids or diols, cardanol-based products, recycled cooking oil, branched or linear C 6 -C 36 fatty alcohols, hydroxy-functional materials derived from epoxidized, ozonized, or hydroformylated fatty esters or acids, or mixtures thereof, thereby forming a polyester polyol, wherein the amount of the hydrophobe in the polyester polyol is 5 to 55 wt%, and the polyester polyol has a hydroxyl number of from 40 to 400 mg KOH/g.