How do you make a buck and save the earth? One Dumpster at a time.
By Donna Coco
Illustrations by Murilo Maciel
Americans generated 250 million tons of trash in 2010, which doesn’t even touch the 7.6 billion tons of solid waste produced annually by U.S. industrial facilities. Waste disposal presents a huge problem to society, and not just from a logistics point of view. Disposing of solid waste creates greenhouse gas emissions, according to the Environmental Protection Agency. As waste decomposes in landfills, it produces methane; incinerating waste produces the byproduct of carbon dioxide; and the trucks that collect waste produce greenhouse gas emissions. The result of these emissions, notes the EPA, is a warmer global temperature that can lower crop yields, increase rain and flooding, and enlarge the area affected by wildfires.
Buried in all that waste, though, lies opportunity, and leave it to entrepreneurs to dig it out. These Babson alumni saw a need, and now they’re turning trash into green, both for themselves and the planet.
Shane Eten, MBA’07, founded Feed Resource Recovery, which converts supermarket waste into energy and fertilizer.
Photo: Laura Barisonzi
Turning Garbage into Gas
Like most people, Shane Eten, MBA’07, never thought much about waste. Then while working for a candle company, he began researching biodegradable packaging for an all-natural product line. But to create a truly sustainable product, he had to figure out how to compost it properly. What he found started him thinking. At the time, the composting industry wasn’t well-developed, with a few farmers taking compost almost as a side business. Most waste went to landfills and incinerators, where it contributed to global warming. Eten figured there must be a better way.
What if companies could compost trash themselves, wondered Eten. Research made him realize that supermarkets, which pay to get rid of tons of waste daily, would be a good target. Thus came the idea for Feed Resource Recovery, a zero-emission composting system that allows supermarkets to turn their waste into energy and nutrient-rich fertilizer.
Knowing he wanted to start a company, Eten came to Babson. “That’s what you’re supposed to do, go to Babson to start a company, right?” he says. “Honestly, if I had tried to start this on my own without all the professors and resources and competitions, there’s no way it would’ve gotten off the ground.”
In between classes, Eten continued researching and modifying his idea. He also competed in business plan competitions, and the winnings provided enough capital to hire a small staff and start the company. “We did a lot of hands-on R&D. We literally were at the back of grocery stores counting waste every day. We’re probably the smartest in the world when it comes to supermarket food waste,” says Eten. They tested different ways to ground and digest garbage as well, eventually devising a proprietary process that uses existing industrial components. “It all worked, but it took time, a dedicated team, a trustworthy angel investor, and forward-thinking customers,” says Eten.
One of those forward-thinking customers was The Kroger Co., one of the largest retailers in the U.S. Eten began working with Kroger in 2009 after President Len Schlesinger introduced him to David Dillon, the company’s CEO. “Len had just started as Babson’s new president, and he wanted to talk to entrepreneurs. I thought he wouldn’t talk to me because I wasn’t a good student,” says Eten, “but he was great and said he knew the CEO of Kroger. That was a very nice intro. I sent Dillon an email. He said he liked the concept and gave us the thumbs up, then gave us the names of some folks to talk to about getting the project rolling.”
Two-plus years of hard work ensued, but that connection resulted in Feed Resource Recovery installing a system to service about 400 Ralphs supermarkets, which are owned by Kroger, in Southern California. The system, up and running at one of Ralphs’ warehouses just this fall, can handle about 100 tons of waste per day, which includes any food, packaging and all, that the supermarkets can’t sell or donate. Ralphs already was recycling much of its food waste, but the remote location of the composter meant significant costs. On average, companies pay $50 to $150 per ton to send waste to landfills or composters, notes Eten. Instead, his system converts compost into biogas, a renewable natural gas that can be used to fuel trucks and generate electricity onsite. The system also creates organic fertilizer. “The same farmers who drop off food at the warehouse can pick up the fertilizer,” says Eten. “It closes the loop.”
Getting the business started has been a huge challenge, says Eten. “But when you’re an entrepreneur and you start something, it’s all your fault, so you call it an opportunity and not a challenge,” he jokes. The effort has its rewards, too. Eten looks at his business as a way to improve the food industry model. “What’s great is there’s never a day where I have to question if what I’m doing is right. I don’t think about it. In terms of job satisfaction, check that box off.”
BigBelly Solar, founded by Jim Poss, MBA’03, brings savings and efficiency to waste collection.
Photo: Jose Mandojana
Squeezing Dollars out of Trash
Walking on Charles Street in Boston, Jim Poss, MBA’03, noticed how every weekend the garbage cans were overflowing with trash. One day, as he watched a dump truck stop every 100 feet to empty the bins, idling and spewing black smoke as it started up again, an idea struck him. Why not compact the trash in the bin? Increased capacity would equal fewer pickups and less garbage truck fumes.
With a background in the electric-vehicle and solar-power industries, Poss immediately convinced himself that a simple solar panel could power a small motor operating the compactor. He ran some numbers and decided, “I can do this.” A little research uncovered an industry that burns billions of gallons of diesel fuel each year. “It didn’t take much of a spreadsheet to figure out if you displace collection a couple of times a week, this could work,” says Poss. Thus began BigBelly Solar (originally Seahorse Power Co.), manufacturer of solar-powered, networked trash and recycling compactors.
As a student at Babson, Poss actually had two other ideas for companies, one for an offshore wind plant and the other for wave and geothermal energy. “Given my stature at the time, I had no credible, viable plan to start a billion dollar company,” says Poss. “But I was pretty sure I could make a solar-powered trash compactor for 10,000 bucks.”
The first BigBelly cans were boxy, too big, and had some sharp corners. But Poss was able to make 750 cans to test his theory without investing too much. He then used feedback to improve the next model. “We had a better understanding of the system and how far we could push it,” he says. “We sunk a couple million bucks into the next generations.”
As Poss learned more about the industry, he discovered a bigger problem that he hadn’t foreseen: Trucks running routes to cans that weren’t yet full. “About 20 percent of cans are full, but 80 percent aren’t,” says Poss. “You’re sending a truck out there with a couple of guys, and it stops and starts, no matter what’s in that bin. It costs money. If you do that five to seven days a week, the numbers add up real fast.”
To solve the problem, Poss’ team developed a network and online management system that tells users when a can needs emptying. Compacting trash lowered collections; picking up only when necessary brings that number down even further. To round out its offerings, BigBelly added cans for recycling about four years ago and, just recently, cans for composting. Sustainability carries over into the production of BigBelly bins, as the cans are manufactured in the U.S. and their exteriors are made from recycled U.S. steel and plastics.
Poss cites Philadelphia as a city that realizes more than $900,000 annually in savings since switching to the BigBelly system. Part of that comes from recycling efforts: By diverting about 23.5 tons of materials from landfills each month, the city is not only helping the environment but also saving about $2,600 a month. Word has spread and BigBelly works with hundreds of municipalities, colleges, and universities. “People talk about making a difference in the world, and in the grand scheme of things, what we’re doing is small compared to some problems. But to change something from being tremendously inefficient and wasteful to a lot better feels really good,” says Poss. “I love touring through cities and finding the BigBelly.”
Charlie Bogoian ’08 (left) and Phil Tepfer ’08 use recycled materials to create clothing for their company, Kenai Sports.
Photo: Tom Kates
Sailing through Landfills
Helping the environment was not on the minds of Phil Tepfer ’08 and Charlie Bogoian ’08 when they came up with the idea for SailProud, a business focused on sailing apparel. They were seniors, hanging out in their room in McCullough Hall, and simply wanted to start a company, having been inspired by the entrepreneurial atmosphere at Babson. Both were avid sailors and, knowing the market, saw a need for clothes that would transition from the boat to the street.
But it wasn’t long before they realized that to survive and thrive, the company would need a stronger identity. “We talked with some of our professor advisers, who told us to dream big,” says Tepfer. “What can you do that no one else is doing?” Tossing around ideas, the two thought about what would resonate with people and themselves. “I grew up in West Haven, Conn., which is right on the ocean,” says Tepfer. “West Haven has a beautiful coastline, but it’s also plagued by litter and pollution.”
They decided to adopt a sustainable business model and researched the idea of making their clothes from recycled materials. “It turns out the upholstery industry has been using fabrics that contain recyclables for about 30 years,” says Tepfer. If a couch can be made from recycled materials, why not a T-shirt, figured the two.
The team found a manufacturer in Fall River, Mass., that produced fabric from a 50/50 polyester/cotton blend, with the polyester coming from recycled materials. Partnering with a local manufacturer also played well into their sustainable model. “We gave them all our money and had them make us 100 T-shirts,” says Tepfer.
The strategy worked for about a year, but then the company stalled. Their line was too limited. “Everyone wanted something slightly different,” says Tepfer. “Unless we had a portfolio of options to offer, people weren’t interested.”
The two decided to broaden their client base and focus on performance gear for athletes and active lifestyles, changing their name to LiveProud. They also spent the better part of a year developing 30 fabrics, all made from 100 percent recycled materials. Along with No. 2 through No. 7 recyclables, they began incorporating organic compounds such as bamboo, wood chips, coconut shells, and soy into their fabrics. “We’ve always been interested in sustainability,” says Tepfer, “but when I took my first tour of a landfill, I thought, wow, this needs to change.”
To source materials, they work with several landfills that sort garbage onsite. Sorted materials go into what Tepfer describes as “a giant blender,” which creates flakes. These flakes are sent to another contractor, which melts them to get rid of imperfections and then spins the substance into long, thin fibers. The fibers are delivered to mills to produce fabrics and garments.
With production handled, the two did some market research on the name of the company and found LiveProud wasn’t working well. The company now is called Kenai Sports, named after a small town in Alaska that Tepfer says is a model of sustainability.
All their decisions seem to be paying off, as Kenai Sports is doing well. Babson’s athletics department has been a big customer, and so have other colleges and universities. The company recently signed contracts with Massachusetts and Connecticut to supply their state and local police with garments. And since the company’s inception, Tepfer proudly declares they have recycled more than eight football fields of trash from landfills. “No one argues that pollution is a problem,” he says. “There’s only so much space for landfills. It’s going to get to a point where we have to do something.”
Preserve, founded by Eric Hudson, MBA'92, turns recycled materials into household products.
Photo: Tom Kates
Brushing up on No. 5
When recycling first became more prevalent in the ’90s, people questioned the benefits of such programs. What happened to all those materials? Were they even being turned into anything? Step in Eric Hudson, MBA’92. Hudson wanted to start a business, one in which he could “implement change and get my hands dirty in the operations.” So with a respect for nature, entrepreneurship in his family (his grandparents founded Brookstone), and a Babson MBA, he founded Preserve, which today produces a variety of recyclable home goods made from 100 percent recycled materials.
“The idea was to create a demand for things being recycled, which was novel back then,” says Hudson, who started the company, initially called Recycline, in 1996. He decided that a toothbrush would be Preserve’s first product. “Everyone uses them, we hope,” he says, “and professionals are out there saying you need to throw them away three or four times a year.”
Hudson talked with a lot of dentists, who loved the idea and helped with the toothbrush’s design, as did his father, an industrial designer. For materials, Hudson chose No. 5 (polypropylene), often used for yogurt and hummus containers, because, as he says, “They needed the most help.” Not many communities even collected No. 5s; a lack of demand for them meant towns couldn’t sell enough of the materials to meet the associated costs of recycling (although this is slowly changing). Polypropylene also is one of the more benign and versatile plastics, notes Hudson, and it already is used in many toothbrushes. Plus it can be recycled and reprocessed easily.
Because making products from recycled materials was uncommon, Hudson initially encountered some resistance from manufacturers when meeting with them to discuss production. “It wasn’t until about the fourth meeting that they decided we weren’t wackos,” he says.
Finally, in March 1997, he launched the Preserve toothbrush. It shipped to about 60 stores, mostly local places with a natural health bent. “For days, I’d look in the mirror and wonder if the world would buy a recycled toothbrush,” he says. “We set the bar very high. Coming out of the box, we needed to show people you can make a high-quality product from recycled materials. That’s one of the founding principles of Preserve. Even though we’re using trash in some respects, it can be reborn into a beautiful new product.”
But the product succeeded, and Preserve’s line since has expanded to include other personal care products as well as kitchen tools and tableware. Now Preserve’s products are sold nationally in stores such as Whole Foods, Trader Joe’s, Hannaford, Shaw’s, The TJX Companies, and on Amazon, plus “a whole lot of natural chains,” says Hudson.
So far the company has used more than 100 tons of recycled materials. To encourage even more recycling of No. 5s, four years ago Hudson started a program called Gimme 5. Consumers can drop off No. 5 recyclables at more than 200 locations nationwide or mail them to Preserve. A partnership with Recyclebank then lets people earn points toward discounts and deals on products from participating retailers. As a result, Whole Foods recycled about 300,000 pounds of No. 5s last year, and around 10 to 20 percent of the No. 5 materials used in Preserve products come from the Gimme 5 program.
Business is great, but that doesn’t mean Hudson never worries. Compared to big competitors such as Procter & Gamble or S.C. Johnson, Preserve is quite small. Still, Hudson focuses on what he calls “forward-thinking retailers” who support brands like his. “We are lightening our footprint,” says Hudson. “When asked what do you do for the earth, the number one activity that consumers say is ‘I recycle.’ The stats are out there. Recycling does make sense for town finances and for the earth.”