Ma­chines that turn com­mer­cial food waste into smart garbage

Web-con­nected di­gesters re­duce waste and sup­ply use­ful feed­back “It oc­curred to me that waste was valu­able”

Bloomberg Businessweek (Asia) - - CONTENTS - Olga Kharif

When Dunkin’ Donuts fran­chise owner Bill Mul­hol­land wanted to re­duce costs, he took a closer look at his garbage. About a year ago, he got a deal on a $400-a-month bio-di­gester—a com­mer­cial, dish­washer-size steel box filled with bac­te­ria that con­verts food waste into sewage—from BioHiTech, a maker of the ma­chines. Mul­hol­land, who’d heard about the di­gester from a friend, also liked the idea of help­ing the en­vi­ron­ment by cut­ting down on garbage. Be­sides shav­ing a bit off his $550 monthly trash-haul­ing costs, the web-con­nected ma­chine pro­vides Mul­hol­land with in­for­ma­tion to help him bet­ter run his busi­ness. “If we don’t have enough waste run­ning through the ma­chine, I know we don’t have enough prod­uct,” he says. “If we have too much, we are over­bak­ing. I re­ally can see from afar if my store man­agers are do­ing a good job.”

Ex­tract­ing in­for­ma­tion from garbage was just what Frank Celli, the chief ex­ec­u­tive of­fi­cer of BioHiTech, was af­ter when he and his team de­vised a way to make the ma­chines smart. “It oc­curred to me that waste was valu­able,” says Celli, who as a teenager worked in his fam­ily’s garbage-haul­ing busi­ness in New York’s Hud­son Val­ley. He could tell a lot about cus­tomers from their trash.

BioHiTech started de­vel­op­ing the web-con­nected di­gesters in 2013, adding an In­tel pro­ces­sor, spe­cial soft­ware, and con­nec­tiv­ity, and it be­gan mar­ket­ing the units in 2014. Since then, the com­pany and a hand­ful of com­peti­tors, in­clud­ing San Jose-based Power Knot and Canada’s To­tally Green, have per­suaded hun­dreds of busi­nesses across the U.S., from Hil­ton Ho­tels to the Cheese­cake Fac­tory to the U.S. Army, to buy the units. Busi­ness own­ers and man­agers can track, via PC or a mo­bile app, how fre­quently the di­gesters are used, how much waste is di­gested, even which sup­plier the waste comes from. “It al­lows us to pro­vide our cus­tomers with a level of trans­parency they can’t re­ceive any­where else,” Celli says.

The com­pa­nies sell and lease the ma­chines. BioHiTech’s leas­ing fees range from $6,000 to $13,000 a year,

de­pend­ing on the size of the unit; the pur­chase price ranges from $23,000 to $42,000. A small di­gester—46 inches wide, 35 inches deep, and 50 inches high—pro­cesses up to 800 pounds of waste in 24 hours, ac­cord­ing to Celli.

BioHiTech es­ti­mates the mar­ket for its type of di­gesters could ex­pand to more than 250,000 units used by busi­nesses do­mes­ti­cally, as cities and states grap­ple with bet­ter waste man­age­ment and en­vi­ron­men­tal reg­u­la­tions. Roughly one-third of food pro­duc­tion glob­ally is lost or wasted, ac­cord­ing to the Food and Agri­cul­ture Or­ga­ni­za­tion of the United Na­tions. Ninety-five per­cent of that winds up in land­fills, where de­com­pos­ing scraps emit meth­ane, a green­house gas that con­trib­utes to cli­mate change. Last Septem­ber the U.S. En­vi­ron­men­tal Pro­tec­tion Agency and the U.S. De­part­ment of Agri­cul­ture set a first-ever na­tional goal of cut­ting food waste in half by 2030.

Many states are push­ing for re­duc­tions, too. A Cal­i­for­nia law that re­quires busi­nesses to ar­range for re­cy­cling their or­ganic waste started to take ef­fect this year. Since 2014, Mas­sachusetts has pro­hib­ited large waste pro­duc­ers, such as food pro­ces­sors and col­lege cam­puses, from dump­ing food with the rest of their garbage. The ef­forts are sim­i­lar to the move to adopt re­cy­cling in gen­eral, ac­cord­ing to David Bo­damer, an ex­ec­u­tive di­rec­tor at the trade pub­li­ca­tion Waste360. Some states lead the way, oth­ers fol­low. “The same thing is go­ing to hap­pen with food waste,” he says.

BioHiTech’s Celli sees even greater op­por­tu­ni­ties to ex­pand into larger ma­chines and in­ter­na­tion­ally. On May 16, the com­pany, which is not yet prof­itable, an­nounced that a sub­sidiary will fo­cus on the mu­nic­i­pal waste mar­ket. Last year it es­tab­lished a unit in the U.K. to ex­ploit op­por­tu­ni­ties in Europe. The com­pany hopes to sell 100 dis­posers in the U.K. in the next 24 months, and it’s also ex­pand­ing in Sin­ga­pore, Latin Amer­ica, and Mex­ico. To­tally Green, which turned a profit in the last year, could even­tu­ally ex­pand be­yond the U.S. and Canada. “We’re get­ting calls from all over the world,” says CEO Louis Anag­nos­takos. “Peo­ple are start­ing to un­der­stand there are op­tions to the truck, to the tra­di­tional waste-dis­posal meth­ods,” he says.

The bot­tom line Com­pa­nies can learn a lot about their busi­nesses by an­a­lyz­ing data from web-con­nected bio-di­gesters.

BioHiTech’s di­gesters can break down 800 pounds to 2,400 pounds of waste per day, de­pend­ing on their size

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