Food waste occupies over 30% of U.S. landfills and is the number 1 contributor of landfills’ harmful methane gases, which is proven to cause ozone depletion. Handling the growing volume of food scraps has become a major problem for municipalities nationwide, as landfills rapidly face a capacity crisis. The state of Wisconsin alone sends as much as 455,259 tons of food scraps annually to landfills, with restaurants accounting for 45.8% of that waste stream.
Composting, hailed as the latest form of recycling, is embraced as a sustainable solution for food waste diversion in cities both in the United States and abroad. At the forefront of this emerging industry is Compost Crusader, based in Milwaukee, Wisconsin. Compost Crusader hauls organic waste from Milwaukee-area restaurants, corporations, and schools to a certified composting facility, where it is turned into compost and sold to community gardens and local farms. By creating this separate recycling channel, Compost Crusader is able to divert 50–75% of organic food waste from landfill waste streams.
In addition to generating environmental benefits, Compost Crusader creates jobs for the local community. The social enterprise partners with small business owners who are responsible for turning waste into finished compost, as well as with a welder who makes the customized waste containers at each Compost Crusader location.
From Community Nonprofit to Social Enterprise
Compost Crusader grew out of a small nonprofit focused on community-based composting. After six years, founder Melissa Tashjian and the organization’s board decided it was time to scale up operations to make a larger impact. Like the name of the company she founded, Melissa became a real crusader for composting in southeastern Wisconsin.
In 2014, Melissa competed in and won the Good Money Challenge, hosted by Marquette University. The $7,000 winnings enabled her to upgrade the truck she used to collect food waste and to begin taking on new clients. Almost immediately, these moves paid off. Between January and November 2015, Compost Crusader diverted 543,671 lbs. of waste from landfills, the equivalent of keeping 395 cars off the road for a year.
Despite Compost Crusader’s progress, however, Melissa realized that long-term success would require a deeper focus on financials and the solid business practices needed to grow the business.
In September 2015, Melissa participated in a 3-day Marquette University Social Innovation Initiative, adapted from Global Social Benefit Institute (GSBI®) material developed at Miller Center for Social Entrepreneurship and made possible through the support of eBay Foundation. The GSBI Boost program helped Melissa focus on the key business elements of her venture.
Working closely one-on-one with one of the program mentors, she used the GSBI Boost program’s financial module to examine the Compost Crusader financials in detail. By understanding the business value, costs, and profits at the unit/container level, Melissa was able to see where Compost Crusader was making money and where it was losing money. She decided to change her pricing structure, which not only improved her bottom line, but also allowed her to offer different pricing levels and container sizes to meet different corporate needs across the city.
For Melissa, “the one-on-one real-time feedback and coaching” from her mentor helped her to establish effective growth and revenue-generating plans for Compost Crusader. Based on the output measures she focused on, she closed 2015 in the black and prepared to generate significant revenues in 2016.
Financial Discipline Leads to Big Benefits
Following her participation in the GSBI Boost program, Melissa hit a major milestone with Compost Crusader: diverting 100,000 lbs. of waste from the landfill in a single month. In addition, she added two new corporate partnerships (bringing her total to 35) and set up customer contracts with help from the Law and Entrepreneurship Clinic at Marquette.
Melissa has been able to hire a full-time sales person to help local businesses understand how composting works and how it affects them. Composting is usually a cost-neutral approach to landfilling for her customers. They are able to reduce the costs associated with their landfill pick-ups and use that “savings” to pay Compost Crusader to retrieve their organic food waste.
After reviewing the business financials with her mentor, Melissa was finally able to start paying herself a salary. In addition, she is adding more employees and is confident that the number of Compost Crusader customers will continue to grow.
During 2016, Melissa focused on launching the composting pilot program with the City of Milwaukee. She has set a goal for the next 5 to 10 years to sell the Compost Crusader business to an organization able to scale composting throughout the Midwest — at which point Melissa intends to apply what she’s learned to embark on a new social venture.
® GSBI is a registered trademark of Santa Clara University. All rights reserved.