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Turning waste into money: A compost story

Monday - 1/6/2014, 7:20am  ET

Coffee1.jpg
Eric Steiner picks up a bin full of used coffee grounds to load into his truck that he keeps in the back of the Starbucks in Chevy Chase, D.C. on Nov. 2, 2013. (Courtesy Heather Brady)
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Heather Brady
WTOP CONTRIBUTOR

WASHINGTON - Eric Steiner's brown, ankle-length work boots sank a few inches as he climbed a pile of decomposing horse manure and coffee grounds that was twice the height of an average person.

He picked a spot halfway up and dumped out the bags of used grounds he carried with him, sifting and turning it all together with his pitchfork. Each swing of his arms mixed the pile farther into itself. Steam rose from the dent as he folded and tossed the newly added grounds.

The pile had no distinct odor. Even though compost piles have a reputation for smelling terrible, healthy compost piles don't have a bad odor when they break down. Steiner's pile only released a rich, earthy smell — the scent of efficiently decomposing, nutrient-filled compost, ready for Steiner's customers to add to their gardens.

When people focus on used coffee grounds as good material for making compost, less of it winds up in landfills, where it releases the greenhouse gas methane as it breaks down. But few people are building coffee composting businesses specifically to make a profit from using the nation's widely available supply of grounds.

After more than a decade of producing compost, Steiner has been selling it to suburban gardeners for three years through the grounds-focused company he created, EarthBrew Compost. It's a one-man operation, run with a bright red pickup truck and a tiny patch of land at the back corner of a farm in Brookeville, Md.

Once Steiner mixes the used coffee grounds and horse manure that he collects into his pile, he lets it sit. The one he is making now has been breaking down since May and Steiner feeds it each time he picks up more waste.

When it is done, he will be left with rich, dark compost to sell next year. He keeps two piles at the farm in Maryland and each pile can grow to be more than 20,000 gallons in size. Steiner is developing one pile for future years and selling the other, a finished pile, to customers now.

The 46-year-old Baltimore resident intends to scale his business up, taking advantage of the growing popularity of compost and urban gardening. Steiner's secret recipe, coffee grounds and horse manure topped off with vegetable scraps, works particularly well. The grounds provide a large amount of carbon, while the horse manure contains just enough nitrogen to maintain a balance between the two elements.

If coffee grounds are composted, they help create the ideal soil climate for plant growth, instead of releasing methane as they break down in landfills. But many coffee shops, businesses and people throw away their food scraps, including their used grounds, to the tune of 36 million pounds of wasted food that reach landfills each year, according to the Environmental Protection Agency. Most people toss the resource that has become a big part of Steiner's business.

One Man's Trash is Another Man's Profit

When Steiner first saw a friend's parents attempt to compost food scraps by burying them in their backyard in the mid-‘90s, he didn't have the science background to know what they were doing. He didn't know how to begin composting. He didn't fully understand why they were saving their food scraps.

But he did know that it was captivating. Steiner wanted to know more about the process of decomposition and the idea that those food scraps could become something useful after they break down.

Though Steiner trained in political science and economics and worked as a consultant who helped U.S. businesses get visas for temporary foreign employees, he also experimented with compost on the side and developed a keen interest in sustainable environmental solutions.

After a few failures, he created a compost recipe based on used coffee grounds. While he was perfecting it in the late 2000s, he got word that the Chevy Chase, D.C., Starbucks was offering its used coffee grounds for free.

"You need to have a certain amount of vegetable matter, carbon-based stuff, and I thought, wow, coffee in bulk," Steiner says.

He seized on the opportunity to increase the amount of compost he was making and went commercial with his idea in 2010.

Customers frequently pack into the Chevy Chase Starbucks, and Steiner says he picks up all 3,000 pounds of used coffee grounds that it produces each month. He still does visa consulting work, so he doesn't support himself with just the profits from EarthBrew Compost. But his ultimate goal is to make a living off of EarthBrew. He is slowly transitioning the balance of his work from mostly visa consulting to mostly making and selling compost.

Steiner produces and sells more than 100 cubic yards of compost per year at an average of $80 per yard. He also charges his customers extra fees for more complicated deliveries. Due to growing demand for his product, Steiner almost sold out of compost in 2013 for the first time ever.

Ashley Goff, a minister for spiritual formation at Church of the Pilgrims in Dupont Circle, heard about EarthBrew Compost from a master gardener in the D.C. area. After buying a truckload of compost early in 2013 from Steiner, who delivered it directly to the church's backyard garden, she liked the product and the concept behind Steiner's business so much that she bought two more loads in the same year.

"It's this great magical recipe that he has," she says. "I feel like for the amount of compost that we get, the fact that Eric comes to us, the fact that he can either just do a dump or he can wheelbarrow it to [wherever] for another $50 … it saves us some of the work that we can't quite pull off as efficiently as we want."

The church garden has also been pest-free since Goff added Steiner's compost to the soil, a side effect of compost that is echoed in scientific research.

"We have no pest issues, so we don't have to put anything on it that would be additional," Goff says. "Our stuff looks great because there aren't bugs attacking it, which really leads to happy gardeners."

A Smart but Precarious Pursuit

Despite the large amount of used coffee grounds thrown out in the D.C. and Baltimore areas that Steiner could use, his business model involves some risk. He collects coffee grounds almost entirely from the Chevy Chase Starbucks on the basis of a strong verbal agreement with the store manager.

This means a corporate decision or a change of heart on the part of the store manager could affect half of his supply chain, putting his business in danger as it nears a crucial turning point where growth is possible.

Lauren Esveld, a district manager for Starbucks in D.C., says as far as she is concerned, she wants employees at her stores to give the used grounds they have to someone who is putting them back into the earth, regardless of whether those people make any money off of it.

"Because of the ‘Grounds for your Garden' [program], anyone can go into any Starbucks if there isn't already a commitment to another person or organization [and pick up used grounds]," Esveld says. "I'm just happy to be able to give it to someone to be able to recycle and reuse it."

Customers take used coffee grounds from her other 12 stores for their own personal gardens, and the store managers all take it seriously, honoring those agreements. Esveld says employees then throw away whatever customers don't take.

Steiner has tried to work with other Starbucks cafés in the D.C. and Baltimore areas, as well as some independent shops, but none has been as open or reliable as the one in Chevy Chase. Since Steiner's pickup process involves leaving a bin at a store full-time and parking his truck nearby when he gets the used grounds, not all stores are set up for it, either.

Bill Novelli, professor and director of the global social enterprise initiative at Georgetown University's McDonough School of Business, has started entrepreneurial projects of his own. He's surprised that Starbucks is letting Steiner do this because of how valuable used coffee grounds are.

"I would have thought that Starbucks would either be selling those grounds or giving them away to some charitable cause, where they could get some credit for that," Novelli says.

Novelli says the business model Steiner created has risk because of his verbal agreement with the Starbucks store manager. Steiner's horse manure supply is secure because he has a written agreement with the owner of the farm where he keeps his compost and get his manure. His supply of coffee grounds isn't as safe, though.

Steiner could grow his business by increasing both his supply and demand or by partnering with a nonprofit or charity for added credibility, according to Novelli. But Steiner would first need to make his coffee grounds supply safer and more stable.

Coffee grounds are in no danger of disappearing as a frequently used product. The U.S. is the largest consumer of coffee in the world, with 8 in 10 of the country's adults drinking it regularly in 2013, according to data from the National Coffee Association.

The D.C. area isn't short on used coffee grounds, either. Esveld, the Starbucks district manager, says about four or five of the 13 stores she oversees produce as many used coffee grounds as the Chevy Chase café. Since the D.C. area is close to many farms in Maryland and Virginia that could supply more manure, a supply increase for Steiner's business seems possible.

The growing demand for good compost, as documented by the EPA, many state governments and other organizations, also means Steiner will be able to find more customers. More people are planting their own gardens, too. The Merrifield Garden Center says while their seed sales have always been good, the regional center did especially well with them over the past two years, according to Doris Williams, a manager at the Merrifield location in northern Virginia.

Nine out of 10 customers Steiner works with are suburban gardeners. Many of them heard about him from other gardeners or wanted more of his product after buying a sample at the farmer's market in Bethesda, Md. He didn't think he would sell out of his product in 2013, so he is rationing what's left and waiting until spring to encourage his regular customers to buy more. In the meantime, he is making this year's compost pile bigger to prepare for more business growth.

Not many other people do what Steiner does, so there's not a lot of competition locally or nationally for his business. The Compost Coalition in Austin, Texas has a similar focus with their Ground to Ground campaign, for instance, but Steiner thinks he is the only one in the D.C. area doing this kind of business.

There are about 400 facilities in the U.S. that compost organic waste each year, not including personal backyard compost piles, according to a 2013 Environmental Protection Agency report. The report says the amount of material composted in the U.S. in those two decades grew by about 384 percent, spurred by an increase in state and local legislation that banned or discouraged putting yard trimmings in landfills.

The number of local and national composting facilities can vary because of differences in the way states and organizations track them. The EPA lists 12 composting facilities in the state of Maryland, 38 in Virginia and none in D.C. But the facilities' locations are spread out and quality may differ at each facility, depending on the kind of compostable waste each one will take. This makes Steiner's compost a competitive player in the local market.

Saving the Planet, One Compost Pile at a Time

By helping the Chevy Chase Starbucks and a local farmer dispose of coffee grounds and manure, Steiner says he's helping them reduce their environmental impact over time — an effective selling point for both his suppliers and his customers.

On a personal level, it's more than just good marketing — Steiner is passionate about reducing the human environmental impact in any way possible. After an interview with Steiner for this story, a stranger standing on a D.C. street corner asked Steiner if he could ride in the bed of Steiner's pickup truck for several blocks instead of taking the bus. Steiner agreed and took the man as far as he needed to go, driving on neighborhood streets to avoid drawing attention to himself. His reasoning? It was one more way he could help the environment by reducing that man's environmental footprint and making the most of his drive into the city.

In addition to many other benefits, composting lessens the steadily increasing amount of food scraps that release greenhouse gases as they decompose in U.S. landfills. Since compost can be considered a soil additive, many states and municipalities track its production, encouraging it as a remedy to environmental damage.

And it appears to be working. National Geographic reported that as of 2012, San Francisco's extensive composting program contributed to a decrease in the city's greenhouse gas emissions, along with other transportation, land use and business strategies. After only a couple of years, the city's levels dropped to almost 12 percent below what they were in 1990.

Compost is considered a "green" product, according to Hare. It creates better soil in urban and suburban areas where construction and expansion have made soil quality poor.

While manufactured fertilizer can give plants the elements they need to grow, Hare says it can also build up on top of the soil and damage the environment through runoff. Compost provides a solution by helping to balance the chemical elements in both soil and manufactured fertilizer.

Vegetable matter like used coffee grounds breaks down into quality compost because it is high in carbon, but not too high, according to Hare. When it is paired with nitrogen-rich horse manure, it creates an ideal carbon-to-nitrogen ratio.

"People still don't understand the chemistry of compost, the biology of compost, so they look at it from an aesthetic perspective," Hare says. "They feel it. They smell it. They touch it. And they say, ‘hmm, is this quality compost?' Well, you can't tell until you test it."

Lab reports show that the ratio in Steiner's compost recipe is only a little bit lower than the ideal for good compost. Steiner can easily control the simple ingredients he uses to make his compost such a good soil additive, resulting in a better chemical formula.

However, his compost's ratio is higher than the ratio reported for one of Steiner's biggest competitors — the Compost Crew, a business in the D.C. area that makes money by charging customers a small fee to haul away all of their compostable waste.

Like EarthBrew Compost, the Compost Crew's customers are mostly area residents, though the company wants to add some bigger companies and organizations to that list. But unlike Steiner's revenue, which comes mostly from selling the compost he makes, the Compost Crew's revenue comes from the hauling fee they collect. The quality of the Compost Crew's product doesn't have as much of an impact on their revenue as it does on Steiner's because they make money from hauling waste that will be composted, not from the compost itself.

A Maryland facility that the Compost Crew has paired with makes compost from the different waste products the company hauls to the facility in varying amounts, including meats, dairy products, grains and food cooked in oil.

"I always look at everything in this business as from the perspective of the consumer," says Ryan Walter, cofounder of Compost Crew. "Being able to accept as much as possible makes it simpler and it makes it more compelling of an argument."

With more than 700 customers giving 300,000 pounds of compost per year, the Compost Crew is bigger than Steiner's business. But they have struggled to sell the compost made by their partner facility.

Walter says the specific nature of Steiner's compost recipe means he can become an expert in composting coffee grounds, while Walter's company will have a larger impact in general composting.

"He could get a real boutique product and make his bread and butter off of that," Walter says.

In two different studies — one published by Bioresource Technology in 2009 and one published by Soil Science and Plant Nutrition in 2003 — researchers looked at the quality of compost based on coffee grounds versus compost based on mixed kitchen scraps. In both studies, the compost based on coffee grounds yielded better results.

The lack of a hauling fee for businesses that supply Steiner with coffee grounds and manure is also very appealing.

"We're giving it to Eric," says Esveld, the Starbucks district manager in D.C. "He's choosing to pick it up at no cost to us."

Sustainability, Community, Resurrection and Compost

Goff, the EarthBrew customer and minister at D.C.'s Church of the Pilgrims, says Steiner sees composting as a sacred process.

"It's not just a utilitarian thing of making soil," Goff says. "He actually feels like he's participating in something larger than himself. … It is this whole life and death process that we're so close to."

Beyond its environmental impact, Steiner's business also creates a sense of community for his customers and for the Chevy Chase Starbucks employees.

"It makes them feel good to know that they're giving back and they're recycling back and putting things back into the ground, versus dumping everything in a landfill," Esveld says.

For Steiner, his work is an example of what sustainability is all about.

"I love the outdoors and the greenery and the relationships with customers," Steiner says. "They are relationships built on improving our world, relationships built on being sustainable and smart."

Ultimately, Goff says she feels like she has a responsibility to work with people like Steiner who are doing creative jobs outside of an office space.

"I feel like we have a role in that, of supporting people who take on these endeavors that involve a lot of personal risk and involve the planet noticing a change," she says.

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