Why you should care
Because waste not, want not, is a biz principle unto itself.
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I’m looking at what appears to be industrial-chic downtown decor — only I’m not downtown but in an old industrial zone. The large, austere, freshly painted anteroom of Hop Compost, located at the end of a row of warehouses in southeast Calgary, reflects a personal touch. “Kevin’s father did it,” explains Meghan Perry, who handles the books at Hop Compost, the brainchild of CEO Kevin Davies, adding, “We had no money.” The heavy slab of concrete countertop — the future centerpiece of a retail store — looks cool now, though the first pouring cracked and had to be redone.
It’s in the back of the building that Davies’ dream of a modern composting industry stretching across Canada and the U.S. is taking shape, one turn of a very big screw at a time. Call him the slops king. At just 23, Davies is already on his second company in the garbage business, and he’s doing more than dreaming about a profitable continental empire turning food waste into compost for gardens and farms. He has been raising money — $1.5 million Canadian dollars ($1.1 million) — and has talked nearly 40 restaurants in Calgary into supplying waste and signed up another 40 restaurants in Vancouver to feed a plant being installed there. Meanwhile, Hop Compost has already processed more than 1.3 million pounds of scraps and plans to add a second tank in Calgary as part of an expansion. From there … well, one could in be your hometown. “We’ll be the first mover in all these markets,” says Davies. (Yep, that’s the way he talks … at 23.)
An industrial empire built on recycled leftovers? Skepticism is warranted — after all, cities everywhere collect live garbage for disposal or recycling. But Davies’ approach is working. It’s part technology, part marketing — a skill he learned at his first company, Green Start, a recycling venture — and part of a wave of public interest in sustainability that Davies is riding. Since restaurants, hospitals and hotels pay to have their food waste hauled away, and Hop Compost sells the finished product as nutrient-rich organic compost, revenue is coming in faster than other types of businesses, and Davies expects the company to turn a profit in 2017. “It’s rare that you have a business that has revenue on the input and the output,” says Scott Jenkins, a Hop Compost investor who sits on its board.
Davies, with his scruffy beard and round plastic-rimmed glasses, looks like a walking Warby Parker ad. He sometimes pulls his long, off-blond hair back into a neat bun. It’s probably too severe to say he’s humorless, but when I suggest that, his staff laughs in recognition, while saying that off-campus, he can be more of a regular guy. “He’s no bullshit,” says Jenkins. “He does need to lighten up a little, but I love that he’s all drive right now.” (Davies notes that he does have time for a live-in girlfriend, tennis and cycling.)
But still, he’s often at the Calgary facility, where, in the back, a $470,000 composting vessel that looks like the tanker on a railcar sits on the concrete floor. The technology is exclusively licensed from a New Zealand company for 11 North American cities, including San Francisco, Denver and Seattle. As advertised, it’s free of the odor of rotting food, although there is a faint acidic whiff. A loading system that starts in the next room dumps raw waste — veggies and meat — at one end of the vessel, while a giant auger (the big screw) rotates every hour to push the stuff to the end of the line over the course of 10 days, keeping the casserole cooking at a bacteria-fed temperature of about 122 degrees — toasty enough to produce a certified organic product out of waste that didn’t arrive that way. “It literally closes the loop,” says Vanessa Salopek, owner of Calgary’s chichi Market restaurant, which produces waste that gets recycled back to its suppliers and the restaurant itself to grow microgreens.
Davies got bit by the anti-litter bug just after high school, when his sister complained that the city’s recycling program didn’t include her apartment building. He knocked on more than 100 doors to talk to people about it, then launched a shoestring operation out of his sibling’s van. A year and a half later, Davies was making a profit, picking up recyclables in a big truck and delivering them to the city dump. That’s when he discovered the importance of marketing. The business was languishing until he began issuing monthly impact reports, detailing the amount of water, land and emissions spared. He likens it to the feedback on the dash of a Prius that subtly spurs drivers to get insanely high fuel economy.
Still, he’s green, in more ways than one, admitting that he needs to learn to delegate as the staff grows and the operation expands to multiple cities. Jenkins describes Davies as a “young guy who could use some guidance,” but he fully backs the rapid rollout to the 11, and maybe even 30 or 40, cities. “I love it,” says Davies. “Building a business model is as creative as painting a canvas.”
This editorial article was originally created by OZY Media and published on OZY.com prior to, and independently of its inclusion in this JPMorgan Chase & Co. sponsored series. OZY Media claims the full rights and responsibilities of this article.