Turning Smelly Food Scraps Into Gold

This is a guest post by Julie E. Gabrielli, NCARB LEED, a green business advisor, founder of GOforChange.com and author of the greening business action list with a twist!.

Keith Lasoya, founder of  Waste Neutral, owns an organics waste hauling company that collects source-separated “all food” scraps (pre- and post-consumer) waste in the Baltimore, MD metro area.

Simply put, Waste Neutral turns smelly food scraps into rich compost.

Founded in January 2008, the company has a simple mission. As articulated by Lasoya, “Most people, when they think about recycling, they think about paper, plastic, glass and metals. We want to remind everyone that food waste is the forgotten recyclable resource and ironically was being recycled way before the other man-made materials.”

Their customers primarily consist of restaurants, large educational institutions and commercial properties with outsourced food service vendors, but they also service large food production companies such as McCormick Spice in Hunt Valley.

Mr. Losoya attributes part of their success to their flexible approach that minimizes their customers’ effort and costs.  “If it is organic and compostable, we will take it. This includes meat, fish, poultry, soiled napkins etc., to simplify the customers’ separation requirements.” This is important to note, since in the early days of composting, the facilities only accepted “clean,” un-bagged vegetable scrap waste. From a practical standpoint, it is difficult for food service operations to sub-separate, so composting was not an option.

Size and volume of business

Mr. Lasoya has a couple of business partners. They outsource most of their staff, both drivers and sorters. The total is about six people, including the outsourced folks, who are paid as 1099 contractors. The sorters do waste audits for LEED-EB buildings.

Waste Neutral also services a lot of events, for which they bring on extra people. It’s difficult in this start-up phase to take on more full-time employees. However, Mr. Lasoya notes that working on a contingent basis can be the best of both worlds for both business owners and workers.

Currently, Waste Neutral hauls 50 tons per week, which will increase as they expand with routes to Annapolis and Frederick. They operate six trucks, powered by biodiesel when it is available.

Selling point to potential clients

Every account is different, but they generally find that within three to six months, costs either are either neutral or a savings to the client. For starters, Waste Neutral’s tipping fees are lower: $45/ton, as compared with between $55 to $65 per ton to landfill or incinerate unsorted waste.

Separating organic materials (food scraps) for composting benefits the customer, because this diverts the wettest, densest, smelliest stuff from their other trash. This reduces both the amount and size of containers to their current hauler, resulting in further cost savings.

Biggest challenge

Route logistics is the biggest challenge. As Lasoya has learned, in the hauling world, the path to profit is through density of the route. The more stops along one route, the better. It’s simply not profitable to be too strung out, which means they can’t say yes to everyone.

Advice for would-be green entrepreneurs

Lasoya’s advice is: “Do something you are passionate about. Partner with someone who knows the industry sector. Don’t try to do everything yourself, especially if you don’t have a working background in the industry. Partnering will avoid a lot of costly mistakes.”

Choosing a profitable business model is key to success. Coming from the volatile retail sector, he is very happy with the recurring-income business model of waste hauling. Waste Neutral has ongoing monthly contracts with their customers, so they can easily do cash-flow and profit projections.

Best thing about the business

In every successful business, Mr. Lasoya notes, there’s always a labor of love aspect. For Waste Neutral, it’s the educational component. He just loves seeing the students separating the waste into the composting bin. They always make it a point to have big bins for composting and for other recycling and a tiny bin for landfill waste.

Mr. Lasoya is amazed at how quickly people adapt to this new way of doing things. When they first got into it, they thought customers would require multiple trainings for dining staff, maintenance people, students, everyone. Instead, people just forget about the old way of doing things and they do not slip back. It’s a transparent transition, so it’s not nearly as cost-prohibitive as some clients might have thought.

Through a program called “compost credits,” their clients can enjoy the fruits of their labor by receiving compost made from their food waste. It can be used on their property or donated to a community garden. In many cases, this compost becomes part of an educational program with students at the school. This completes the cycle and lets them see firsthand that food scraps are indeed a valuable, recyclable resource.

Photo: Waste Neutral.