[This story has been corrected to reflect that Walmart, Sam's Club and Target only provide food to EcoScraps. None of these companies sell EcoScraps products].
You could say EcoScraps is a rotten idea. That's because overripe produce that would otherwise have rotted is the feedstock for the startup's organic compost and potting soil.
Then again, few other two-year-old startups can boast that their products are sold by the likes of The Home Depot, America's largest home improvement business, and national wholesaler Costco. EcoScraps also has a relationship with Walmart, Sam's Club and Target. Along with Costco, they're among the businesses providing the food that will be made into EcoScraps products.
These large companies are contributing to the national expansion of a company that distinguishes its products by boasting about its chemical and manure-free composition. EcoScraps’ product line includes compost mix, potting soil, a plant and soil booster, and lawn and garden growth formula.
EcoScraps got started by knocking on the door of high-profile grocery stores and produce retailers and offering to pick up expired fruits and vegetables that would otherwise be sent to landfill. In exchange, the startup requested that these same stores sell the finished products.
"We realized we needed first to create demand for the finished product and work backwards from there," said Dan Blake, the 20-something entrepreneur who put his college degree on hold to found the two-year-old, Provo, Utah-based company with classmate Craig Martineau (now the EcoScraps vice president of finance).
The relationships with retailers, which EcoScraps negotiated on a regional basis in Calif., Utah and Arizona, were the company's first focus when the EcoScraps co-founders stopped experimenting with composting in their college dorm and got serious about their business plan.
Although it took persistence to get the stores interested, EcoScraps got its break when it connected with managers at Costco and The Home Depot who were interested in selling more products with an organic sensibility, Blake said.
Although EcoScraps isn't the first organic compost product to land on Home Depot shelves, it is the first product made entirely of composted fruits and vegetables, according to EcoScraps.
"Most companies and people -- as long as it doesn't cost them any more -- are very eager to do what is right for the environment," Blake said. "Our challenge is to create a program for them that is cost-neutral."
Photo of mulched food courtesy of EcoScraps
Next page: Unifying a fragmented landscape
By linking with these organic waste producers in an increasing number of areas across the country, EcoScraps could be reducing some of the fragmentation in the U.S. composting business landscape. The U.S. Environmental Protection Agency estimates that there were 2,280 facilities across the country as of 2010.
Less fragmentation could also have the impact of diverting a decreased amount of food from landfills. The EPA figures less than three percent of all the food waste in the United States is composted, in part because of this fragmentation.
So far, EcoScraps works with 98 produce organizations that provide the raw material for its soil, compost and soil nutrients.
One partner is Agromin in Oxnard, Calif., which will process produce collected in California by EcoScraps. "They were already making a good high quality compost. We felt it was better to help divert more food to their facility rather than building out our own," Blake said.
Agromin carries certifications from the Organic Materials Review Institute. It sells its products through several dozen independent gardening and landscaping centers in Southern California and works with wholesalers that sell directly to nurseries.
Expansion
This summer, EcoScraps will grow beyond its roots in Utah and Arizona to launch a major expansion into Northern California. The expansion is part of its strategy to build partnerships across a range of composting business and services in the US.
"California is leading the way when it comes to organic recycling," Blake said.
Currently, Home Depot is chief among EcoScraps’ 210 retail locations: products will initially be sold in 160 of The Home Depot chain locations in Northern California. In Utah, EcoScraps allies with Costco, Walmart and Sam's Clubs; in Arizona, partners include Costco and Target.
EcoScraps already has facilities in Orem, Utah, and Phoenix, Ariz., where it processes more than 24 tons of food on a daily basis. Its initial financing included $18,000 in Blake's personal savings and $20,000 won through a Brigham Young University business plan competition.
As it expands in California, however, EcoScraps is seeking venture funding and is teaming with hauling and processing partners to build a presence more quickly, Blake said.
Future plans call for EcoScraps to expand up the West Coast into Washington and Oregon. The company is also seeking business opportunities along the East Coast and across the Sun Belt region, Blake said.
At least one other company is looking at how it can expand into composting as well. Waste Management has aspirations in the composting market through its Garick subsidiary. It also has a retail relationship with The Home Depot, which sells the company's Moo-Nure.