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New Roots for Green Business

Mushrooms Grown on Coffee Waste Inspire Innovation and Cooperation

As the world economy increasingly collides with the limits of linear, “cradle-to-grave” production, more eyes are turning towards resource synergies, upcycling, and improved efficiencies to relieve some economic pressure and get more value with less waste.

Photo by David JoyceUsed coffee can be recycled as a substrate for growing oyster mushrooms. As a double
bonus, growing mushrooms in it turns the coffee pulp into an excellent animal feed.

Take coffee. For every pound of coffee beans harvested (of which there were 17 billion in 2010, according to the International Coffee Organization), four pounds of pulp must be collected, and it is generally considered a waste product that is left in heaps to rot. But some companies, such as Equator Coffees & Teas and Thanksgiving Coffee, are supporting efforts to train farmers in Zimbabwe and Tanzania how to use coffee pulp as a substrate for growing oyster mushrooms.  As a double bonus, growing mushrooms in it turns the coffee pulp into an excellent animal feed, and sends the nutrients along to become rich manure, and meat and dairy products. These innovations are helping rural villagers (especially women, whom most of the programs focus on) to diversify their income, establish food sovereignty, and cut back on agricultural waste.

Now let’s tune in to the California version. Mushrooms can also be grown in used coffee grounds, which coffee shops throw away in great quantity, and when a business ethics professor at Berkeley mentioned this fact two students started experimenting. Alexandro Velez and Nikhil Arora grew their first crop of oyster mushrooms in a five-gallon bucket in a frat house kitchen, and before long they had eschewed their offers from a consulting firm and an investment bank, and founded Back to the Roots Ventures. Their company now collects 10 tons per week of used coffee grounds from Peet’s Coffee locations in the Bay Area, inoculates the stuff with pearl oyster mushroom mycelium, and sells it packaged as grow-your-own-mushroom kits. Whole Foods now carries them in stores nationwide, and the kits are also available online.

Photo courtesy Back to Roots VenturesAlexandro Velez (left) and Nikhil Arora grew their first crop of oyster mushrooms in a five-
gallon bucket in a frat house kitchen. Now their company sells packaged "grow-your-
own-mushrooms" kits nationwide.

When I had Nikhil on the phone, he excitedly rattled off other ways that his company is looking to capture value from the waste stream. They are now experimenting with used hops from a brewery, and soy castings from a tofu company.  They snag pallets from loading docks and use them to build display shelves for their products.  When they grow mushrooms in bulk, they re-sell the used mushroom substrate as a premium soil amendment – notice a pattern here?.  Many of these innovations create win-win exchanges: Peet's actually pays Back to the Roots to haul away their coffee grounds, and puts a coffee coupon in each mushroom-growing kit to ensure the cycle continues. “We were taught that you must constantly innovate, in order to maximize your own value,” says Alex in a TEDx talk. “But what we've learned through Back to the Roots, is that you have to constantly innovate to maximize your partner’s value…  This is business 3.0.” 

Back to the Roots resembles its own product: like a mushroom, it extracts nutrients from someone else’s garbage, and creates more value and more opportunities. And, true to their own roots as business school students, Alex and Nikhil are well on their way to building a profitable company.  Their scavenging brilliance permits tremendous savings on material inputs, and their novel business model (and wide smiles) have won them a wide swath of free publicity, and some generous grants and loans. Given all these savings, I had to raise an eyebrow at the mushroom kit’s price: $15 and up in stores, and $19.95 online. When I asked, Nikhil gave a classic business-school response. The price is justified by the market; $15 for up to 1.5 pounds of pearl oyster mushrooms is very competitive with the price you might pay for such mushrooms in stores, and the home-grown ones are considerably fresher, with the added fun of watching your little fungal caps grow. Perhaps more importantly, Whole Foods shoppers already have a demonstrated willingness to pay a premium.

When describing his company’s philosophy, Nikhil invoked Apple Inc., and the comparison is apt. He praises Apple’s aesthetics and user-friendly design, and wants to bring the same experience to your kitchen. “We want to make it easy as possible for people to grow food at home,” he says, and the kits certainly accomplish that goal, making it a perfect gift, conversation-starter, or a science experiment for kids. Home gardening can be an intimidating or frustrating prospect, but with most of the variables removed, anyone who can operate a mister bottle can now cultivate their own premium mushrooms. You may remember one of Apple’s marketing slogans: “It just works.” Back to the Roots also mirrors Apple’s unapologetically high prices.

There are many upcycling companies, and many artists on Etsy, which re-purpose discarded materials into jewelry, backpacks, and other products. Back to the Roots goes one better by actually upcyling nutrients, keeping them in production cycles and out of landfills. But I would be happier if some of the resource synergies translated into savings for the customer, rather than the company and its bottom line.  This would make the benefits of their innovations more visible, and more accessible to a wider audience. Tom Szaky, the founder of large upcycling company Terracycle, believes in selling his backpacks, purses, and other products as cheaply as possible. He told the New York Times in an interview, “People who shop at boutiques already buy green, so you’re not making an incremental change.” I wonder how Nikhil and Alex would respond.

On the Back to the Roots website, a “replacement bag” of mycelium-inoculated coffee grounds is $8.99, versus $19.95 for the whole kit. This means they’re charging $10.96 for the cardboard box, mister bottle, and recipe sheet. That’s not upcycling – that’s upselling. Nonetheless, the company deserves enormous credit for capturing both materials and nutrients from the waste-stream, and minting them into a product cute enough to sell at high-end stores. It’s a big step towards starting conversations about nutrient cycles and economic synergies, and this will inevitably direct more attention and action to where it’s needed most: in the lands and lives of the farmers who feed the global demand for coffee beans.

Brian Scoles, Intern, Earth Island JournalBrian Scoles photo
When not writing for the Journal, Brian pursues all sorts of interests not at all related to his degree. He is passionate about intentional community living, wilderness exploration and leadership, and most recently, activism. He also works with Applied Mindfulness and is a contributor at Sustainablog.

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