Meet the Entrepreneurs Making Food Waste Edible (and Profitable)

Usually when someone wants to change the world, they start a nonprofit. These do-gooding organizations are sustained by donations, hard work, and a lot of people with the same goal. But they rarely make enough money to sustain themselves.

Nonprofits have certainly been at the forefront of the movement to end food waste. Soup kitchens have been collecting unwanted food from farms and businesses since the 1980s, and now people are talking about food waste in a way that was unthinkable a decade ago. Within the last few months, trendsetters and officials at the United Nations were treated to a meal by haute restaurant Blue Hill was made from ingredients usually thought of as trash. Menu descriptions highlighted "pickled cucumber butts," "broken razor clams," "roasted reject apples," and other food phrases so weird and wonderful that it read like a night of slam poetry, not a recipe. The otherwise-wasted food wasn't just edible, it was delicious.

Thus, historically, the uses for food waste have been mostly divided into two distinct markets — people for whom it was the only food available, and others who want to taste it because, suddenly, ugly food is cool. But among food waste advocates, a group of entrepreneurs soon emerged: They believed food waste shouldn't just be recycled for special occasions and soup kitchens; with the right product to champion it, this food could actually be valued. Even better, these entrepreneurs could create a viable business out of giving food waste a whole new look.

Turning food waste into valuable food

One year ago, Philip Wong and Ann Yang noticed the booming desire for cold-pressed juice and saw an opportunity to repurpose some imperfect foods. That combination of ideas became Misfit Juicery, a brand of cold-pressed juices that are now available in 38 locations near Washington, DC.

Though many other juice chains display walls of perfect produce to show how fresh their ingredients are, Wong and Yang knew that this was largely unnecessary. Sure, fresh ingredients were important, but with their product, there was no reason why apples couldn't have brown spots or carrots couldn't be knobbly and crooked. They turned to nearby CSAs and farmers to source ingredients. "It wasn't even 'farmers' plural in the beginning, it was ‘farmer' singular," Wong says with a laugh. Now they've moved up the food chain to work with distributors who can buy ingredients more reliably — though still the same lower-tier foods Misfit sourced in the beginning. Overall, roughly 70- to 80-percent of its produce are blemished or misshapen items that would have otherwise gone to waste.

Photo: Misfit Juicery/Facebook

These days, there's plenty of blemished food to go around. Food doesn't just have to look perfect, it also needs a lifespan long enough to get to its final destination — traveling roughly 1,500 miles on average. Being a business that needed a set menu, Misfit couldn't throw just any leftover produce into a "flavor of the day" (though it does occasionally serve special seasonal combinations). But just because they were working with the second-class citizens of the grocery world doesn't mean they weren't picky. "Customers definitely like variety, and it's nice to have some variation from season to season," Wong says. "They also crave stability — we try to provide both sides of that." After some trial and error, Misfit settled on having four or five flavors that change seasonally. Certain crops, like apples, often end up with a large surplus every year, allowing Misfit to plan for that waste in their seasonal juices.

That reclaimed food also provides financial benefits to Misfit, which pays somewhere between 25- to 60-percent of what the "perfect" versions of the food would have cost. This low food cost helps Wong offer prices competitive with larger companies, even through Misfit produces a lower volume of juice. Of course, prices can fluctuate, and weather, demand, and other variables make it impossible to know what one growing season will produce. The one constant is that it's likely to be different. "There is a lot of variability there," says Wong. "When we're setting our prices and getting the financial projections, we're pretty conservative on the discount that we get because we don't want to be overly optimistic." With only slightly more than a year's practice, Wong isn't ashamed to admit that these financial projections "aren't something we've nailed down yet."

"I wouldn’t have started a food brand if it weren’t for the ethos behind it — I was so passionate about solving this problem."

Another obvious use for misshapen produce is making it into jams and chutneys, which became the business model of UK-based Rubies in the Rubble. Founder Jenny Dawson says she used to make these foods with her mother whenever they had a surplus in their garden. Because so much food waste comes as a result of large-scale surpluses, preserved foods were an obvious choice: With their long shelf life, Dawson wouldn't have to sell the jams immediately, allowing her time to build relationships with local shopkeepers and get the word out about her brand.

Dawson had originally been working at a hedge fund when she got the idea for Rubies in the Rubble. "I wouldn't have started a food brand if it weren't for the ethos behind it — I was so passionate about solving this problem," she says. And for so many people involved in food waste-related businesses, making a living is important, but making a difference is why they keep going.

That said, it's important to have a clear, attainable mission. At first, Dawson tried to employ women from "disadvantaged backgrounds" to prepare and make the products. "But we couldn't sell our chutneys at a high enough price to cover all our costs." They eventually decided to outsource their production and concentrate on the food waste aspect alone. "We had to learn not to do everything but do one thing really well," Dawson says.

Photo: NorGal/Shutterstock

Recycling food production byproducts

Companies like Misfit and Rubies are proving that imperfect whole foods can be valuable (especially to small start-ups on a budget), but what about leftovers? Not the leftovers that haunt refrigerators across the country, the kind that come from processing foods into something else: the coffee grounds after that cup of joe has been brewed, the grains that went into the booming craft and big beer industries, and many more.

Beer is a beverage of simple needs — usually just water, grain, yeast, and hops to get the brewing started — yet when the process is done, all that "spent grain" has to be disposed of somehow. To make 280,000 barrels of beer, one brewery uses 11 tons of grain every year. In 2014, U.S. breweries produced about 192 million barrels of beer, resulting in a lot of spent grain. And its usefulness is far from over. The most common recipient of these grains are farmers who use it as livestock feed due to its high protein, starch, and fiber content.

"It’s not a marketing gimmick, it’s a way for us to be connected."

Yet today, breweries are also finding new applications for their grain, even if only a small percentage. Ellen King, owner of Hewn Bakery in Evanston, Illinois, says that she's been using spent grain from local breweries since the bakery opened. "We take some, squeeze out the excess moisture, and fold it into our bread," she says of the spent grain. Those same nutrients that make spent grain such good livestock feed can also be enjoyed by human eaters — albeit in lower quantities.

Though only two types of bread at Hewn use spent grain, the 30 or 40 pounds of it collected each week does actually cut down on the bakery's ingredient costs. King admits that there is some labor involved in processing the bread and collecting it from breweries, but the cost of "free" still makes it a good bargain. (Most brewers give their grains away for free to anyone willing to pick it up, since they'd have to pay for waste disposal otherwise.) At Hewn, the breads that use spent grain are labeled with the brewery it comes from. King says that because Hewn only use grains from local breweries, it's a way to show off other local businesses. "It's not a marketing gimmick, it's a way for us to be connected," King explains.

Left, Hewn Bakery and its "spent grain" breads, photo: Facebook. Right, Back to the Roots's mushroom kits, photo: Facebook.

The company Back to the Roots, makers of at-home mushroom, aquaponics, and other grow-your-own-food kits, only started because of spent coffee grounds. The two founders were in the same UC Berkeley class when their professor mentioned that although mushrooms could be grown on leftover items like coffee grounds, many places still cut down logs to use as a growing medium. Like most college students, they had a keen understanding of just how much coffee was being consumed, with those grounds going to waste. Co-founder Nikhil Arora says that BTTR started with some local cafes, not knowing if the baristas would even be willing to give up the grounds. But the grounds were "something they wanted nothing to do with," Arora says. "It was messy and heavy and they were more than happy for us to come and take it."

It wasn't long before BTTR developed a second business as "valet waste collectors," and as its business expanded, its developed a second income stream by charging coffee shops for what had essentially become waste management. While BTTR was growing its own mushrooms from grounds in the beginning, it found yet-another market for this waste product when it realized that the coffee grounds used to grow mushrooms was considered a "premium soil amendment." BTTR sold that to Home Depot and other similar stores. In 2013, they collected three million pounds of used coffee grounds from about 50 local cafes.

"If you can’t make it a sustainable business, you’re never going to make a change."

Even within the mission of "reducing food waste," there are many ways for entrepreneurs to approach and solve the problem. Other companies like California's Imperfect Produce, which sells low-cost, blemished produce directly to consumers or grocery stores, have found other ways to turn food waste into a business. Some businesses like Lean Path use technology to help restaurants or cafeterias measure (and then reduce) their waste. In both examples, business income supports the overall mission: Unlike nonprofits or foundations, they don't have to rely on donations and have the flexibility to branch out into new ventures as well.

As Dawson says, "No matter how much you want to do good in the world, if you can't make it a sustainable business, you're never going to make a change." The chefs and nonprofits finding ways to use wasted food are putting a dent in the problem and, more importantly, helping consumers raise awareness of how they use foods in their own kitchens. Now entrepreneurs can come in and not just find a way to use this food — and get extra income to farmers in the process — but show people that it is actually valuable.

It's hard to convince an inexperienced cook to save their vegetable shavings to make soup stock (even if he thinks it sounds like a great idea). But if recycling the peelings could garner some extra income from a business who wanted to use them? That might be a different story entirely.