One Start-Up's Quest to Eliminate Food Waste and Profit

It all started with a plate of waffles at an all-you-can-eat buffet in Provo, Utah. Dan Blake, then a student at Brigham Young University, was having breakfast there with his brother and after he was stuffed, he realized all the piles of food left on his plate would just go into the trash. He started thinking about all the food waste just from this restaurant, and the fact that the restaurant is paying to make the food and then paying again to have it taken away. It just didn’t make sense to him. And then he had his ah-ha moment: "I thought, 'What if I could get someone to pay me to take their garbage and then I could reorganize it and be able to sell it to someone else?'" he told CNNMoney.

This could have just become another one of those napkin ideas, but Blake decided it’s an idea worth exploring and so he did. He started learning about and experimenting with compost, including dumpster diving to get food scraps and running composting experiments in trashcans in the parking lot of his apartment complex. Eventually, he found the business case, dropped out of college and put his savings into a new company he co-founded with two friends named EcoScraps.

Blake didn’t manage to fulfill the first part of his idea (getting paid for taking the garbage away), but he and his partners succeeded in developing a model collects commercial food waste for free and then sells it at a competitive price at their stores. A growing number of retailers including Home Depot and Costco decided it’s an offer they can’t refuse and started working with EcoScraps to reduce waste and sell high quality compost. In less than 3 years, Blake’s dream has become a reality. Next step: becoming a game changer.

EcoScraps’ success is mainly based on three elements: First, high-quality and unique products that are sold in a competitive price. EcoScraps’ products, including compost mix and plant and soil booster, are made entirely of composted fruits and vegetables and have no poop or chemicals in them. They are certified for use in organic gardening and production and provide better results. According to the company, its compost mix enriches garden plots with twice the amount of essential soil nutrients as typical manure and chemical-based soil alternatives. In addition, as Blake mentions in EcoScraps’ promotional video, the cool part is that it is less expensive.

The second element is the fact that the company succeeded by figuring out how to create viable compost material in three weeks, instead of the typical six to nine months it takes other composting facilities. This means greater ability to rapidly recycle food waste into products and avoid supply bottleneck issues.

The third element is their collaborations with big retailers like Costco, Home Depot and Safeway. These companies both provide the inputs for free and sell the compost they become. This is win-win collaboration: EcoScraps get a reliable flow of free materials and attractive selling channels, while providing the retailers with savings on their waste removal as well as 30 percent markup on each $6 bag of potting soil sold. Moreover, EcoScraps helps retailers to boost their green credentials.

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All of these elements create a solution that seems to overcome some of the most challenging obstacles in the food waste market. Food waste at its core is lose-lose concept – businesses pay money to truck away their scraps, which then rot in a landfill, producing the potent methane gas. On the other hand food waste generates a potential for a win-win proposition – scraps can be used to make high quality products, such as compost mix and potting soil. In addition, there’s no shortage of materials - Americans produce 30 million tons of food waste a year. Despite the obvious business opportunity, many companies have tried and failed due to operational issues such as transportation and the inability to scale up while keeping costs down.

Yet, it might be that EcoScraps has found the way to make it work. The company, which already has 24 employees and recycles an average of 24 tons of food waste every day, is growing rapidly and apparently is already profitable. Last month it announced that it will expand its operations to Northern California in addition to its current activity in Utah, Colorado, Arizona and New Mexico.

It’s true that EcoScraps still has many challenges to deal with, both on the supply and demand sides, but I believe that unlike others, Blake and his partners can handle it. The reason is that they seem to have sustainable innovative capabilities in their DNA.

It’s no coincidence that EcoScraps has so many similarities to Terracycle – just like Terracycle and companies such as Honest Tea, Recyclebank and Warby Parker, EcoScraps has the ability to successfully implement what BBMG described as Disrupt and Delight – “leverage the constraints of sustainability to design products and services that work better, cost less and deliver ways for all of us to create a better world.” This is the key for its success and for a little less wasteful future for the rest of us.

[Image credit: EcoScraps]

Raz Godelnik is the co-founder of Eco-Libris, a green company working to green up the book industry in the digital age. He is an adjunct faculty at the University of Delaware’s Business School, CUNY and the New School, teaching courses in green business and new product development.