IF YOU LIKE JELL-O™, YOU'LL LOVE COMPOST

BioCycle September 2003, Vol. 44, No. 9, p. 24

When you look at the manufacture of gelatin - and compost - you'll find a lot of similarities in the transformation of “waste” to snack or soil powerhouse.

Russ Davis

HAVE you ever eaten Jell-O™? If you're like millions of people around the world, the answer most likely is “yes.” But Jell-O hasn't always been the fruity, jiggly favorite it has now become. That's why here is a marketing plan from which all of us in the compost industry could learn a lesson.

You might be surprised to discover that gelatin - the primary ingredient in Jell-O - is less than glamorous. As explained in the web site, HowStuffWorks.com, “the gelatin you eat in Jell-O comes from the collagen in cow or pig bones, hooves, and connective tissues. To make gelatin, manufacturers grind up these various parts and pretreat them with either a strong acid or a strong base to break down cellular structures and release proteins like collagen. After pretreatment, the resulting mixture is boiled. During this process, the large collagen protein ends up being partially broken down, and the resulting product is called gelatin. The gelatin is easily extracted because it forms a layer on the surface of the boiling mixture.”

PACKAGING PLUS CREATIVITY
But hold on. Before you decide to give up Jell-O forever, consider that there are many other foods containing gelatin including gummy bears, sour cream, cream cheese, cake icing, marshmallows, soups, sauces, gravies, canned ham, canned chicken, corned beef and sausage. Not too bad for a product that used to be a waste.

In 1897, due to poor sales, the original creator of flavored gelatin sold the rights to it to his neighbor for $450 because he didn't see the long-term potential. If he had only known that if you add Bill Cosby, some clever packaging and a little bit of creativity, you'd have a kid's snack powerhouse.

Manure and organic wastes are not unique. Unless someone wants it or needs it, it's just in the way - like cow and pig parts. Once a market is discovered, the product has a use. When someone can use it, it has a value. Once it has a value, it has a demand. When demand correlates to the amount being created, the price is stabilized. When demand increases, prices increase. Soon, there can be a shortage creating the need for more production. This all seems simple enough, but does it really work?

I agree totally with the first trend in composting and organics recycling listed in the April 2003 issue of BioCycle that “the composting industry is shifting toward manufacture of products rather than processing of feedstocks (i.e., waste). … This trend elevates the importance of producing high quality compost on a consistent basis.” We keep running out of feedstock to compost.

A key concept in operations at ThreeMile Canyon is lowering transportation costs to get finished compost to market. We use a “back haul” arrangement whereby trucks which deliver solid waste from the Portland, Oregon region then haul compost back to markets, thereby lowering costs significantly.

A QUICK HISTORY
In April of 1998, I was visiting a construction business outside of Portland, Oregon. This business was located next door to a yard debris recycling facility. Looking out the window and watching the activity, it struck me that the facility seemed like a sound business idea, but there was some room for improvement. So, in July of 1998, I bought Wilsonville Waste Wood Processing, Inc. with annual revenues of around $178,000 and changed the name to Oregon Bark - creating a full service landscape supply center. By using “bark” in the name, we were able to attract landscapers and do-it-yourself homeowners. The goal was to expose customers to the benefits of compost use and build that part of the business.

In March of 1999, I took on a partner - Del McGill. We had known each other for 15 years and the pieces seemed to fit. Del's expertise in farming gave him insight to ways in which the facility's operations could be dramatically improved. The combination of McGill in operations and me in sales and marketing worked. Annual sales climbed to nearly $1 million, most of which was compost related. Land use challenges and regulatory pressures caused us to rethink our business plan for large-scale composting.

This time, the plan would be different. Composting would take place on the sites of large-scale, remote waste producers - minimizing visual, vector and odor complaints. CAFOs (confined animal feeding operations) made the most sense to us due to their constant regulatory pressure to manage manure.

We agreed to a tentative partnership with an area soil blending company to combine forces to launch two new compost sites in two Oregon cities - Tillamook and Boardman. Complications caused the business arrangement to stumble. As a result, the soil blender pursued the Tillamook operation. We ended up at ThreeMile Canyon Farm in Boardman, Oregon and formed Organix, Inc.

ONE BIG TEST
ThreeMile Canyon Farm, just outside of Boardman, is the nation's largest circularly irrigated farm comprised of 93,000 total acres. ThreeMile Canyon Farm was a grand scale test attempting to prove the merits of sustainability in agriculture. In 2001, ThreeMile had potentially a huge problem - what to do with around 1,000 yards of manure generated every day from the dairy operation they were placing right in the middle of the farm. Applying material to the fields could be done, but this would prove costly and cumbersome without some material processing prior to application. With tens of thousands of cows, this waste could produce some liabilities or some opportunities. The Farm's sustainable-minded management decided to retain Organix for help. Upon striking a contract in which all parties were confident, a performance based agreement was reached.

In the winter of 2001-2002, the ThreeMile operation was streamlined for composting operations and management. Finished compost began loading onto trucks in April of 2002. Customers in the Willamette Valley were enamored with the material and bought it by the semi loads. The market for compost was better off the farm than on-site. In the first full year of operation, the site expects to produce over 100,000 yards of finished dairy compost shipping it throughout the northwest. In 2004, those numbers are expected to double.

We dubbed ThreeMile Farms' first branded compost product, “PowerPlant.” The product has been a huge success with growers, soil blenders and landscapers. Recently, the product has begun showing up in landscape specifications as the material of choice. The Farm has also just recently sent out material to be used on its first Oregon Department of Transportation (ODOT) job.

The company is in the process of rolling out several new products including a finely screened and blended compost/sandy loam product for the golf and specialized landscape markets. More products are under development with introductions expected this fall.

As compost marketers, it's time that we realize that what we are selling is not a waste; it is a new product - a finished product. Like all manufactured goods, it consists of raw materials managed with quality in mind, transportation requirements and consistency standards for customer satisfaction.

Russ Davis is partner in Organix, Inc. - which provides consulting services - based in Walla Walla, Washington. Projects to date have included processing and placing well over 200,000 tons of organic residuals generated in the Pacific Northwest into viable recycled products such as compost and other soil amendments for the horticulture industry and animal bedding for agricultural markets. More details on composting operations at ThreeMile Canyon Farms in Boardman, Oregon (including treatment methods for food residuals) will appear in a coming issue.

TEN KEYS TO SUCCESSFUL CAFO COMPOSTING OPERATIONS
THE success of a CAFO (confined animal feeding operation) composting operation comes down to around ten key components.

1. Economic sustainability. The composting operation has to at least pay for itself by new revenues or by realized savings of offsetting other costs.

2. Support of upper management/ business owner. If the client looks at their feedstock only as waste, they will treat it accordingly. Fighting against that presupposition is almost futile.

3. Transport logistics. If you are in the compost business, you are in the transport business. It is best to profile hauling solutions prior to project launch.
4. Proximity to populace. Selling materials usually means having someone to which to sell. You may also need added feedstocks to round out your materials.

5. Competent site management. Having incompetent site management will quickly undermine your operation. Quality and customer satisfaction have to be first priorities.

6. Market driven product development. Define who is likely to buy your composted product before you begin, then design your end product accordingly. Consider things like fertility values, pH, water retention, etc.

7. Consistent feedstock supply. Simply put, the more consistent your end products, the more value they have. How much Jell-O would you buy if a piece of pig hoof showed up occasionally?

8. Assessment of possible on-site usage. On farms, compost uses include soil amending, animal bedding, mortality disposal and erosion control.

9. Regulatory cooperation and permits. Environmental responsibility is just a part of how the world works now, don't fight it. Find out first if composting is even allowed in the area and secure a qualified permit specialist. It's worth it in the long run.

10. Ability to manage moisture. Water and compost go together. You are going to have either too much or not enough. Take the time to consider the costs of effectively dealing with water management.

SALES ADVICE IN THE SAND
THINKING about marketing and selling compost? Then think about the possibilities of sand. Sand is about as uninteresting as a raw material can get. Boring, lowly, walked upon - sand has a myriad of uses. It can be used for golf courses, hourglasses, increasing drainage, cat boxes, sand bags, traction/abrasion, animal bedding, roadbeds, athletic fields, potting soil mixes, playgrounds, concrete additives, filters, sandblasting, riding arenas, glass, sandpaper, polishing and scouring compounds. That's quite a few positive applications for “just sand.”

Remarkably, two of the options listed are nearly exact opposites - "increasing drainage” as in topsoil and “sand bags”, which effectively decreases drainage when used in a flood control dike. Strange? No, just the right product designed for the right application.

HOW TO REFINE YOUR “JUST COMPOST” MARKETING PLAN
WHEN it's time to think marketing strategies for your finished compost, consider these approaches to the questions you should ask:

By nutrient value. Does your compost have desirable major or trace elements? How about large quantities of calcium or copper? Perhaps you have exceptional nitrogen, potassium or phosphorous. Regular testing might pleasantly surprise you.

By physical property. Do you have a higher pH that can help neutralize acidic soils? How about a lower pH for alkaline soils? How is the color and the odor? Blunt and round-edged finished product may be suitable for arena use.

By particle size. Can your material be made finer or coarser? In erosion control applications, size is important. Size is the first primary determination in most compost sales decisions.

By weight. Lighter compost moves through blower trucks better. Heavier material won't be washed or blown away as easily.

By biology. How is your compost for fungal or bacterial activity? Does it have microbial activity needed by an industry in your area? Can it be used for filtering?

By package. Do your customers want material in bulk? Are there retail locations that could use bags? Is any special size of bag better than another? Nursery, golf course, vineyards - many prefer 1,000 lb or 2,000 lb totes to bulk or bags. What about flow-through bags for erosion control? Should you assist your customers in finding equipment that can be used as an applicator for your product?

By enhancement. Is there something you can add to your finished product to make it easier to apply? Something you could amend it with to improve effectiveness?

By availability. Can you make compost year round when others are restricted to seasonal production? Can you deliver in off hours or in special trucks?

By transport. Can you take away a waste and bring back a finished product? Perhaps you could cut a customer's disposal and trucking costs.

Variations of compost could become used in a myriad of applications, just look around and see if it could meet a need for your area. Many are yet undiscovered. It may not look like you thought it would when you started, but you will have 1) Solved a problem for a client; 2) Distinguished yourself from other composters; and 3) Generated a new revenue source for your operation.

Copyright 2003, The JG Press, Inc.