How would you use a razor blade without the razor?
In the organics industry, the razor would be the new service vehicles and equipment on the market that offer the ability to use the razor blade (the compost) more efficiently. The theory is that together, they have more value.
The compost industry has matured since its growth period of the early and mid-90s, when the market was driven by regulation changes. The majority of the state laws that currently ban yard waste or other organics from landfills do not require the use or purchase of materials produced from these wastes to be used in-state. However, during the past decade, equipment innovations that make compost easier to use and more efficient are helping compost markets flourish.
Out of the Doldroms
Traditionally, compost is bulky, difficult to handle, can be dusty, often has a few odors and is difficult to apply. These barriers make using compost less attractive than using other lawncare products. In many of the current markets such as lawn care, landscaping and sports turf, applying compost has lacked the sizzle and simplicity to make it a more feasible and cost-effective product.
When people buy a service, they want convenience. So how can composters make their products more applicable so they are more widely used in the market?
With commercial businesses such as landscaping or lawncare companies, you first need to understand what drives their business economics. For example, application-dependent companies often need a simple and efficient way to apply fertilizer to complete a certain number of lawns each day. If a company needs to complete 30 to 50 lawn applications daily to make a minimum of $1,000 to cover costs and make a profit, compost isn't an option because compost must be hand-applied and raked out once the material is dumped on the lawns.
Fortunately, many types of equipment recently have been developed to provide quick and easy compost application.
Selling Compost Convenience
As labor costs continue to rise, compost application has become more mechanized, even with conventional products such as fertilizers. Although common spreaders for fertilizers have been used for decades, larger, more efficient commercial applicators have become accessible.
Additionally, some companies have started to pelletize compost to fit into current professional application methods. Although pellet size and length is an issue with compost, some companies have been partially successful. Planet Green, Cary, N.C., for instance, has penetrated the turf market with a bagged, pelletized product made from mushroom compost. The company ensures its product will work by cooperating with spreader manufacturers on selecting the proper settings for certain applications.
Other companies also are working on application innovations to make compost easier to use without genuine modifications. For example, blower trucks and specially designed bulk spreaders have become popular application mechanisms. These machines typically apply compost between a 1-inch and a 2-inch minus specification, which covers nearly all types of commercially available compost.
Custom Installation Target Markets
Landscape contractors represent the largest market for the new compost applications. The majority of mulches and compost are used by landscape contractors. In some markets, contractors are large enough to warrant purchasing blower trucks or spreaders. Or, equipment owners could subcontract their compost application services to landscape contractors to make their business more efficient.
We custom-apply mulches, compost and even topsoil for a number of landscape contractors, says Robert Urbine, vice president of East Coast Wood Recycling Inc., Richmond, Va. [Landscape contractors] benefit because in the spring, there are only so many hours in a day to do all the work. We allow the application to replace critical labor hours, and the [landscaper's] company manpower can be assigned to other critical tasks.
Parks and recreation offices, schools, corporate grounds managers, theme parks and other maintenance managers also make good candidates for the application services provided by blower trucks and spreaders. In most cases, purchasing the equipment is not feasible for these groups, so subcontracting may be a better option. This becomes obvious when labor issues and in-house budgets must be cut to meet various demands. Because labor is a leading budget issue among these markets, subcontracting makes good business sense.
Cemeteries are a good potential market for compost application equipment, particularly blower trucks, because the hose can work in between graves and around entrances. This allows grounds managers to assure relatives that no one will drive over their loved ones, but the lawns will remain green.
Roadsides and Department of Transportation erosion control efforts are perhaps the largest and most promising of all markets available for compost and composted mulch application. Especially for roadsides and slopes of greater than 1-to-1 or 2-to-1, both blower trucks and spreaders are ideal in helping to apply compost to stabilize soil, establish vegetation and control erosion.
Additionally, using compost on roadside slopes and in private construction for filter berm replacement instead of using silt fences promises to be one of this decade's greatest growth areas. Using a blower or spreader to apply the compost or mulch can effectively cover the soil and allow water to run on top of the compost to a drain. Ironically, compost will not float away and according to field trials, is more effective than silt fence, rocks or other conventional materials.
Because using organic materials can reduce maintenance costs in these tough-to-manage areas, the application of compost should increase exponentially over the next 10 years. And for composters, this means another local market will provide a significant opportunity to combine service revenue with a product that is annually renewable, all organic, 100 percent recycled and works better than many traditional methods.
Obviously, compost has to be installed correctly for the materials to do their job, but most blower truck operators are experienced at understanding these issues onsite.
Even if there is minimal damage to the compost filter berms during heavy rains, fixing these areas becomes another service. It's much easier to repair minimal damage with similar materials than to use other erosion control options. For instance, in severe cases, bulldozers, loaders and other heavy equipment often are used to re-track slopes, move around soils and create new drainage pathways. With compost, however, many of these areas are not so severely damaged and a re-application is less expensive than relocating materials with equipment.
The key to making compost marketable and more efficient is understanding the equipment as well as the product, and communicating with product manufactures and applicators. There obviously are many characteristics that make the application of compost ideal. Unfortunately, it often is difficult to get these ideal properties into every single compost on the market. Thus, it is necessary for composters to communicate with equipment manufacturers about what products work best in each type of equipment. Without feedback, composters will not have the opportunity to change the production process to create better products.
Consistency is perhaps the most important item in a product, says Wayne King of Environmental Resources through Humanity (ERTH), Peachtree City, Ga., which manufactures and markets many grades of compost products along with other organic materials such as bark, soil mixes and stone. Managing these variables in the field can be challenging, but you can manage anything better if it is consistent.
Oftentimes, spreader operators and blower truck applicators constantly have to adjust the application rates, speeds and openings of their equipment when moisture levels of compost fluctuate from load to load. This creates unplanned challenges, and the application can become less than perfect. But when the compost supplied is consistent and the moisture content is the same load after load, the efficiency of application is dependable.
In addition, maintaining a consistent moisture level helps to manage the flowability of the compost in any type of application equipment. When the moisture ranges reach greater than 50 percent, the compost may become gummy and has the tendency to bridge or block together in the hopper of the equipment. When the moisture drops to less than 35 percent, the compost may become extremely dusty, and worker inhalation may become an issue.
Most equipment operators would agree that having a finer product creates more dependable application rates. Although having product too fine can be a concern because it can create dust and bridging problems in the equipment's hoppers. The -inch minus range for particle size seems to be almost ideal.
Dust is a nuisance when applications are made in retail housing, apartment complexes, parking lots or shopping malls, where exposure to dust on cars and other property is extended. The dust normally is considered harmless, but it is a visual detraction.
The clinching benefit of compost for many customers is the product's nutrient content. For example, -inch (33.75 cubic yards per acre) of a 1 percent (very common) nitrogen compost weighing 1,000 pounds per cubic yard with a moisture content of 40 percent is equal to about 50 pounds of available N compost per acre, or about 1 pound per 1,000 square feet of turf. This is the same amount applied by most common lawncare programs five times per year, for a total of 4 to 6 pounds of N per 1,000 square feet per year. Nitrogen is calculated to be 25 percent available in the first year.
Compost can replace at least one fertilizer application. While weed and pest control still will be challenging issues, compost can be a valid replacement for fertilizer in programs that involve spring and fall applications following aeration. Consequently, many companies could use the current application technology to sell compost that previously was not in their program.
Selling the Package
Compost has been available for years at many garden centers in either bulk or bag form. But its use as a topdressing has not become common because manual application is hard work. Using a wheelbarrow is difficult and inefficient compared with blower trucks or spreaders.
As commercial contractors try to stretch labor hours and productivity during the peak season, using the advanced methods of compost applications can increase efficiency and cost-effectiveness. Compare the $20 per cubic yard to $30 per cubic yard blower truck installation costs to the manual labor costs for the same volume of mulch or compost.
Mechanized applications also do a better job of using less material. Many truck owners claim to use 20 percent to 30 percent less material when applying mulch with a blower truck because it has a more even application rate compared to the deep piles created when mulch is dumped then spread out. The reduced costs to spread compost using a mechanical application normally is marketed as a huge convenience factor that helps sell the package. Without the installation convenience, perhaps compost would not be sold.
Subcontracting mulch or compost installation can allow a company to conduct other activities that add value during peak season. For instance, spring cleanups, installing new lawns, fertilizing and other programs are all popular spring activities that a blower truck cannot accomplish but a crew could.
Contractors have to determine for themselves how much money the extra service could add to their bottom lines. This is difficult when a product is not being offered due to inefficient application. However, some companies can sell 10,000 cubic yards of compost in a year at a retail value of $20 per cubic yard or $200,000. This figure doubles when offering installation at $20 per cubic yard on top of product costs, for a total of $40 per cubic yard, or $400,000. Minimal additional overhead is needed for this type of program if the company already is an effective distributor of bulk organic products. Compost offers a good divergence from mulch and topsoil, which is carried by most distributors.
It may be arguable to make a cost comparison using $20 for the product and $20 for installation, but that's the point. Many industries have hidden actual product costs in a package that costs the same as or slightly more than the sum of the parts, but sells much better.
Programs sell better than products or machines separately. And the new machines offer the composting industry new value. The synergistic effect of offering both the product and installation has more value than either alone because composters now can earn income from both product sales and service revenues, if they own the equipment. Programs create buying habits, and as these habits become dependable, the equipment will continue to make compost easier to use.
When your compost salesperson meets with a customer, ask your rep to ask the customer, Would you like us to install that for you? Just one little question can dramatically increase the bottom line.
Rod Tyler is owner of Green Horizons, a consulting firm in Grafton, Ohio, and can be reached at [email protected] .