Fertile Opportunity Awaits For Food Waste Processors

Globally speaking, the statistics on food waste are sobering, but in the United States they are downright shocking: the U.S. Department of Agriculture figures up to one-third of the available supply goes to waste.

Set aside, for a moment, the frightening ramifications this has in the face of world population growth. We definitely should be working to reduce waste. But what about the organic scraps or produce that legitimately should be disposed of that are currently emitting all sorts of methane in landfills? There’s a greentech movement afoot to use that material both as the feedstock for renewable energy and for soil nutrients.

Five-year-old anaerobic digestion company Harvest Power, for example, is processing more than 2 million tons of organic waste per year at its “Energy Garden” facilities, producing approximately 33 million bags of soil and mulch in the process. “In North America, over the next few years, heightened consciousness about the alternatives to dumping organics wastes in landfills will drive tremendous opportunities for companies able to recycle organic wastes into clean energy for our communities and soil enhancement products for our gardens and agricultural land,” noted CEO Kathleen Ligocki early this year.

One newer company that I’m watching closely is WISErg, founded by two ex-Microsoft engineers. They’ve developed a technology called Harvester that digests food scraps and turns it into organic fertilizer: it early customers are grocery stories looking for a more responsible way of dealing with overripe produce and waste from their delicatessen, seafood and meat departments.

After working with several independent stores in Washington state, WISErgcaught the eye of local Whole Foods Market WFM +1.47% managers in the Bellevue; when I chatted with WISErg CEO Larry LeSueur earlier this summer the technology was in the process of being installed, although the store already sells the fertilizer.

“We can help to create a virtuous circle of food consumption and production, with nearby growers using organic fertilizer made from food scraps that originate in our store,” said Dena Hastings, the Whole Foods regional green mission specialist for the area, when the deal was announced this spring.

One of the more interesting aspects of WISErg’s technology is that Harvester uses cameras and sensors to collect oodles of data that help grocers track when materials are being added, which not only helps the company organize pickups but can help stores address unnecessary waste, according to LeSueur. “It’s going to help our customers in ways that we haven’t even thought of,” he said.

WISErg raised $5 million in private Series B funding in late June, earmarked for it intended expansion into California. (That brings its total raised so far to $7.75 million.) Plus, last week it hired a chief financial officer, who will help the company scale to accommodate new customers and partnerships.

I’m also keeping my eyes on CleanWorld, another developer of anaerobic digester technology. On paper, its approach to addressing the food waste problem is very different than what WISErg is doing since its primary focus is on turning organic waste into biogas. The company is at the center of the high-profile Sacramento BioDigester project, which processes up to 100 tons of food scraps and organic materials daily. The excess materials created during the process, however, are being used by a company called EcoScraps, which sells organic fertilizer and soils in places such as Target TGT +1.81%.

Anaerobic digestion is actually relatively common in Europe, but it hasn’t really caught on in the United States because of the startup costs involved and because, quite frankly, Americans are used to throwing things away without really thinking about it. What makes CleanWorld’s approach intriguing is that it is modular: easier to scale up over time, according to the company’s CEO Michele Wong.

“In Europe, these sorts of facilities are plentiful. … One reason they have not been built in the United States is because they are highly capital intensive projects,” she told me earlier this year.

U.S. interest is growing because of the overwhelming amount of food sent to American landfills: something like 100 million tons of it. The USDA sees this both as a big problem – the methane that this waste emits is a far more potent greenhouse gas than carbon dioxide – and a big opportunity – there are at least 11,000 sites that could host significant biogas operations. The USDA actually believes there’s enough capacity to generate 41 billion kilowatt-hours of electricity per year, roughly enough power for 3 million homes. The big obstacle, of course, is the investment required.