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From Dirt To Dollars

Article-From Dirt To Dollars

While a miracle may be required to transform water into wine, turning a grape composting operation - or any composting operation for that matter - into a successful business doesn't have to be that difficult. Bob Pestoni, president of Upper Valley Disposal Inc. and Upper Valley Recycling Inc., St. Helena, Calif., is living proof. Likening grape composting to running any business successfully, all it takes is a little ingenuity, persistence and creative marketing, says the hauler, Napa Valley resident and former "hog feeder."

Pestoni, who got into the solid waste collection business in the 1960s, began hauling glass, aluminum and other solid waste for disposal and recycling as a result of being a pig farmer. "My family had been hauling byproduct feed for the hogs for many years with the thought in mind of using someone else's discards," Pestoni says. "Having already learned the value of recycling, I started to haul byproduct feed and reuse associated materials for my own hog farm on a much larger scale."

Building a garbage hauling and disposal business based on the relationships he had fostered from hog feed hauling, Bob and his brother Marvin naturally got involved in the garbage business, collecting solid waste from approximately 30,000 residential, commercial and industrial accounts in California's wine country. Eventually, as the Pestonis realized the value of finding better uses for their products instead of filling up a landfill, composting started by "default."

"During the fall grape harvest, the wineries generate a lot of waste in a very quick period," Pestoni explains. As he collected the spent pomace - the skins, stems, seeds and pulp that remain after pressing grapes for wine, Pestoni would dump them into his own fields and vineyards. After noticing soil improvements in the areas where he had placed the pomace, Pestoni decided to make a go of the composting business.

Now, Upper Valley Recycling hauls and composts 17,000 tons to 20,000 tons of pomace per year from the 42 wineries in the area. Pestoni charges $6 to $10 per ton to remove the pomace, then sells it back at about $22 per ton to the grape farmers to enhance their soil. "The system pays for itself," he says. "If it didn't, we wouldn't be doing it."

Making his composting business profitable was not a piece of cake, but Pestoni's history in hauling made collecting and selling the finished product easier. "Composting the pomace is not something the other vineyards can't do themselves, and some of them do," Pestoni notes. "But it's a busy and difficult time of year for some of the wineries, the pomace is very heavy because when it comes off the press it's about 65 percent to 70 percent moisture, and hauling distance is a factor."

To collect the pomace, vintners discard their waste in Upper Valley's 8- to 10-ton drop boxes. Pestoni navigates the valley, hauling full bins away and replacing them with empty ones. Once at his composting facility, the stems, skins and seeds are combined with some of the compost from the previous year, then formed into large piles with plastic pipes running through them to pump air into the compost and promote aerobic conditions. The material is composted for a year, so finished compost sales are from the previous year's pomace.

"It's certainly taken a lot of work for us to iron out a system, and we're constantly doing research and development to better the process," Pestoni says. (His compost was tested for three years by Dave Heil of Robert Mondavi Vineyards who found it improved the grape harvest.) "But the farmers who use the product have found some real benefits to it."

Through effectively marketing his compost and being creative about what he uses for feedstock, Pestoni's neighbors - the other vineyards - have found value in Upper Valley Recycling's operations.

Just Like Any Other Business Pestoni's approach holds true for successful composting operations across the country. The bulk of the facilities that are successful are profitable because they run their operations like a business. They learn from their mistakes, are creative about what they process, develop consistent compost from load to load and market their products - while maintaining sound management practices.

Additionally, successful facilities market products that are:

* Proven effective through research and experience when used for their specified purpose. For example, compost that's used for potting soil has different qualities than compost used to generate turf, so the product should work in the conditions it's designed for;

* Consistent with federal and state regulations so that customers do not face any health risks;

* Fairly priced in their markets; and

* Available when customers want and need them.

"The facilities that are successful now are looking at ways to improve marketing and increase the value-added aspects of their products, if they haven't already done so," says Rod Tyler the national field representative for the United States Composting Council (USCC), Amherst, Ohio.

While it sounds simple, this is a dramatic change to how compost facilities operated just a few years ago. Historically, they were not started as true product marketing businesses. Driven by state organics bans, many people began composting to save landfill space - "so they had to learn about the economics of composting the hard way," Tyler says.

For example, "Ten years ago I remember writing business proformas that estimated grinding costs at $2 per yard because we never had a large grinder, never had a time test trial and we listened to a lot of manufacturers," he says. "But the real life situation that we ran into after data collection was that it maybe cost $4 per yard and all of a sudden we were 100 percent off. A few facilities ground contaminated loads that had a piece of steel in it and it would cost $30,000 to fix the machine. Everyone I know in the business who's been around for a while has run into traps like that. Today we rely on real-life experience."

"In the past, people did not think about the marketability of the compost they were planning to produce," agrees Ron Alexander of R. Alexander Associates Inc., Cary, N.C. Co-chair for the USCC's market development committee and a 15-year industry veteran, Alexander says, "Keep in mind, compost facilities typically are built to manage a waste stream. "We've been building composting facilities whether the market wants the finished product or not, so it's a little backward as far as the supply and demand curve goes. But in that context, a lot of people have done a wonderful job of making composting facilities successful."

Misnomers about composting costs also have caused inflowing market confusion, Tyler adds. "A lot of people think that if it costs $20 per ton to tip solid waste and $20 per ton for composting, composting has lower processing costs," he says. "That's entirely false. In most cases, composting costs more to do, but the industry historically has reduced tip fees to gain volume and get economies of scale."

The most successful composting facilities and operations are the ones that begin with the end in mind, says Sharon Barnes, president of the USCC and owner of Barnes Nursery, Huron, Ohio. "Certainly you need the resources to start with, which is someone else's waste, but remember that composting is a business of volume reduction. Essentially, you're taking in a large amount of material and reducing the volume by 75 percent with specialized equipment, upgraded facilities and expensive labor. The cost of the end-product is way too expensive if it's not subsidized by a tip fee, so the secret of success is to develop a niche market for your product and capitalize on the back-end."

In other words, don't give your product away for free. "If you give it away for free, you're telling people that your product is not valuable," says Jim McNelly, president of Naturtech Composting Systems, St. Cloud, Minn.

You also can set back your marketing program by two to three years, Alexander adds. To determine what to charge, do your homework and see what other people in your area are getting for soil amendments and what the market will bear, he suggests.

So, how have successful composting facilities overcome the obstacles and what have they learned thus far that you should apply to your operation?

Add Value with Feedstocks "A number of key factors make a successful composting facility," says Matt Cotton, technical consultant for the California Compost Quality Council, San Francisco. Admittedly, there is no one right way to run a successful composting facility - what makes one business successful may not work for another.

Nevertheless, "it doesn't matter whether you're public or private, you also have to be a little entrepreneurial and have a sense of creativity about what feedstocks you'll accept, your processing methods and how you add value to the product," he says. "The more creative you can be with trucking, processing or marketing, the more profitable you can be. Keep in mind that you want to get as much money as you can on the front end in tip fees as well as on the back end for your product, while spending as little as reasonable in the middle."

To bring in money on the front end of your composting operation, look at what organics businesses in your area need to get rid of, and see if they can be used as feedstocks. For example, Upper Valley Recycling could have solely used residential yard waste from its collection operations to make its compost, but when it originally began its composting business, it chose to use the pomace because Pestoni knew the wineries would pay to have it hauled away. Once composted in aerated, static piles, the pomace provides a quality compost that the vineyards like, as well as gives Pestoni the opportunity to produce another salable product, grape seed oil.

To make additional products, Upper Valley Recycling has since decided to use collected yard waste. The company also is looking into larger sized mulch and is working with the California Integrated Waste Management Board, Sacramento, to consider using the yard waste it collects from residents' curbside programs as compost and mulch for vineyard erosion control.

The Town of Islip, N.Y., Yard Waste Facility also has been successful in adapting its composting program to the available feedstocks in its region. Opened in September 1988, the Long Island, N.Y., facility originally was designed to process all of the yard waste generated by the town. The community, which had a population of approximately 310,000, had mandated a year-round yard waste collection program.

"Initially, we were taking in about 55,000 to 60,000 tons per year of leaves, grass, brush and small limb materials at our 40-acre facility and composting it," says Stuart Buckner, the director of environmental services for the town. "But in the early 1990s, the collection program changed. The community implemented a waste reduction program called, 'Don't Bag It, Recycle It,' which encouraged residents to keep the grass clippings on their lawns," he says.

Collection subsequently changed from year-round to seasonal, primarily in the fall and spring, which reduced some of the peak grass tonnages Islip's composting facility needed to process. Simultaneously, some of Islip's pre-processing machinery was beginning to wear down, and Buckner was looking to upgrade and modify this equipment.

This presented the perfect opportunity for change, so with a grant from the New York State Department of Economic Development, Albany, the town developed a wood waste recycling system within the existing composting facility. Islip upgraded its primary shredding system, which expanded the facility's ability to grind 10-inch to 30-inch diameter pieces of wood while improving the processing rate of the commingled yard waste stream.

"By purchasing a tub grinder, excavator and shear in addition to the primary grinder, we not only increased the size of wood that could be handled, we also nearly tripled our volume throughput capability to process the entire yard waste stream during peak seasons. New end products were created by separately processing wood waste," Buckner says. "In addition to primarily producing 11/42-inch minus compost, we now are producing 131/44-inch minus wood mulch products. Marketing efforts have been targeted primarily in the bulk sales area to landscape accounts, nurseries, greenhouses, turfcare specialists and vineyards, as well as large golf course projects. Landscape accounts bring us wood and other yard waste materials, as well as purchase compost. Once a few golf courses purchased our compost, it helped to build our reputation and material sales have increased steadily."

Food, Glorious Food Food composting currently is occurring in some places, such as on the coasts where tipping fees are the highest and in states that are pushing a 30 percent to 50 percent recycling rate. "Going after food will be the only way to reach that rate," Alexander says.

Recently, the city of Hutchison, Minn., conducted a pilot project, collecting organic food waste from local groceries, schools, food processing industries and large meal providers such as the large businesses, hospitals and retirement homes. "They set up a special route to pick up the organic material, and the program went very well," McNelly says. Now, the city is expanding the pilot and looking at enlarging the program to residents, as well as improving its collection, bagging and composting system to handle the food waste.

Additionally, both Silver Creek Materials Recycling and Compost, Fort Worth, Texas, and Texas Organic Products, Austin, incorporate food waste and free liquids, such as milk, beer, soda and wine, into their compost.

Silver Creek originally was a sand mining operation that added composting to its business because the owner thought the large equipment, such as front-end loaders and excavators, could cross over to both businesses, says Bart McKay, operations manager for the company. "About three or four years ago, when Subtitle D was put into place, it forbid free-flowing liquids from being disposed of in landfills before they are solidified," he says. "All of a sudden everyone had to find alternative ways to dispose of out-of-date beer, wine, liquor, milk, etc., and it was a concern."

Consequently, the Texas Natural Resource Conservation Commission, Austin, Texas, asked Silver Creek to come up with a simple solution for recycling the liquid waste. The company developed a concrete destruction pad that sloped into the center and had a drain at the bottom.

"Trucks loaded with beer, wine, liquor, soft drinks, sport drinks, juices and just about any other type of liquids that are containerized dump their load on the pad, then we run over the containers with a front-end loader that is equipped with L5 rock tires," McKay says. The liquid then runs through the drain into a holding tank, which Silver Creek pumps through hoses into its composting piles to moisten them.

"We knew we were watering the compost a great deal anyway because we were using more than 800,000 gallons of water every year, pumping just under 1 million gallons of water annually from our sand mining operation," McKay says. "Now we're actually recycling 3 million gallons of food grade containerized and bulk liquids that have the added benefit of nutrients, such as sugars and nitrogen, that are good for the compost. We've also reduced our water costs and we can charge a tipping fee, so it's a win-win situation."

Texas Organic Products (TOP), a division of Texas Disposal Systems Inc., Austin, developed its composting operation because the company had a permit for its landfill that included composting. With this in mind, "the owners immediately started grinding brush, creating large piles of mulch and not a lot of markets for their product," says Jim Doersam, manager for TOP. "The owners soon realized that every material that goes into the tub grinder saves landfill real estate space, so they made an environmental, as well as business decision, and decided to expand their composting operation."

Taking a cue from Silver Creek's owner Robert Dow, "who is my personal guinea pig," Doersam says, TOP began to look for free liquids to wet its compost, as well as other feedstocks to incorporate into its operation. Now, the 30-acre site accepts liquid waste from Pepsi, Coca-Cola and Borden Dairies, food processing waste from a local Italian food manufacturer and clean lumber, brush, yard trimmings, pallets, wood materials, food materials such as produce, dead animals, telephone directories and shredded government forms to make its compost. According to Doersam, TOP produces about 24,000 yards of 31/48-inch screened compost, 12,000 yards of composted topsoil and 12,000 yards of composted mulch per year, and sells the material to landscapers and its competitors, as well as retails it to the general public.

"We're fortunate that one of our biggest competitors also is one of our biggest customers," Doersam says. "Garden-Ville, another composter in San Antonio, Texas, is really strong on the marketing end and produces custom soils and landscape mixes. But their customer base is so large, they can't serve them all, so we sell our compost to them and their franchises. People in this community already realize the value of the material, so it wasn't a hard sell."

Avoiding a Wrong Turn While TOP has had success, Doersam admits there are a lot of roadblocks to starting a composting operation, the top three being cost, odors and poor public perception about the products.

"We're fortunate that we're associated with a landfill company, so we share solid waste transportation, including the marketing staff, the gatehouse staff and the drivers who deliver trash to our facility also pick up and deliver many of our products to customers," he says. "If we were just a stand alone operation, it would be very capital intensive to get started because the equipment - trommel screens, turner, grinders and front-end loaders - is expensive.

"We also were fortunate that the facility was built on clay that was removed from the last landfill expansion," Doersam adds. "All we had to do was grade it to meet our dimensions and surface the 6-acre compost pad. It would have cost several times more if we had to bring in outside materials to build our facility."

Especially with food residuals and food byproducts, economics comes into play when it comes to composting, Tyler says. "They're great organic materials, but you have to ask yourself if it's effective to pick up food waste in conventional plastic bags that end up contaminating finished compost," he says. "You need a biodegradable and compostable liner that will not cause litter or contamination problems on the site. Conventional plastic bags have some hidden costs and have degraded the value of the product, so many companies now are working to solve this problem, making a move toward biodegradable bags, liners, cutlery, etc.

Don't Hold Your Nose Odors also are a major concern, Doersam notes. "Anyone who says their facility doesn't have odors has an olfactory problem or is a liar. All facilities have odors and that's a fact of life. The key is how you control it to minimize noxious conditions."

To reduce odors, TOP makes sure food processing waste is incorporated into the compost windrows within 10 to 15 minutes from when the materials are dropped off at the site, Doersam says. "Then, the windrows are turned and topped with the 'overs' - the larger wood chips that got screened out of the compost- as windrow dressing, which acts like a biofilter."

Other composters, such as Upper Valley Recycling, are trying other decomposition methods. For example, when neighboring vineyards complained about composting pile odors it changed its method from windrows to aerated, static piles, which Melissa Prange, Upper Valley's project coordinator, says have worked well.

But sometimes, perceptual, not real, problems have to be overcome. "While times may have changed, we have been our own worst enemy," McNelly notes. "In the past, compost facilities have smelled, were not well-managed, produced leachate and poor quality, inconsistent compost. So today, people do not necessarily think positively about composting facilities. There's also a perceptual problem where many people in the environmental community are concerned about potential toxins or contaminants in the compost, even if there's nothing to back up their concerns."

What's in a Name? Branding is one way to combat negative opinions. For example, Texas Disposal Systems (TDS) actually developed the name Texas Organic Products (TOP) when it realized "not many people want to buy compost that's associated with waste disposal and landfilling," Doersam says. Now, TOP uses the names TOP Coat for its mulch, TOP Compost for its compost, and TOP Soil for its composted topsoil products, all of which promote good name recognition," Doersam says.

Whether it's branding or just educating others about your product, improving awareness about compost can help your business.

"Awareness is an issue," Tyler says. "We are light years of where we were 10 years ago, but we still have a long way to go. Landscapers may be familiar with its benefits because they've tried compost and saw perennials double in size, trees flourish and customers were pleased with their work. The retail public that still is unaware of compost's benefits just needs to use good compost one time to get educated and hooked."

And while compost may be recognized for its ability to improve plant growth, in many cases, people aren't aware of its other beneficial uses in bioremediation, erosion control, restoration, etc., Barnes says. She predicts these will be future growth areas.

Alexander notes that when programs fail, aside from quality, it's usually because of a lack of effort to educate potential customers. "Education is how you raise the value of the product," he says, "and that's an effort that needs to be done on a national as well as a facility-to-facility basis."

Pestoni agrees. Five percent of his compost sales go to the local high school's agricultural department for education about sustainable farming practices and environmental awareness.

Overall, composting has grown significantly in the past few years, and those in the industry expect it to get better.

"The public is becoming more aware of what compost is and how to use it, and the market has expanded and buyers are becoming more sophisticated, demanding more performance guarantees," McNelly says.

"Today, more than ever, composting is accepted as a viable waste management alternative and economically viable industry," Alexander agrees. "This is because composting is being treated as a manufacturing process and because more effort has been made in market development. Composters have seen that they can make good money in composting if they produce a good product and make the effort to sell it."

Composting operations can vary greatly in size and scope. Yet the same essential process that takes place in backyard compost piles and windrows is found in industrial composting - just on different scales.

Setting up a serious, large-scale composting facility requires specialized equipment representing capital investments that can reach several hundred thousand dollars. Consequently, choosing equipment with "the right stuff" is one of the first steps in designing a successful composting operation.

A full-scale compost facility usually includes a grinder, front-end loader, windrow turner, a screen and, if the market demands, a picking station and a bagging plant.

Grinders come in all shapes, sizes and styles. But most compost facilities use a hammermill style machine in a tub or a horizontal grinder form. Each has advantages in terms of production, ease of maintenance, material containment, cost, etc.

For example, a tub grinder with a self-contained cab and loader can make more product and free up your front-end loader for other work. On the other hand, a loader operator can run a horizontal grinder by remote control, eliminating the need for a tub grinder operator.

A rubber tired front-end loader is the utility infielder of composting operations and is used to move, load, mix and sort materials, as well as to load trucks hauling your finished product to market. One with a bucket in the 7 cubic yard to 8 cubic yard range should be adequate for most composting start-ups.

Compost turners are used to aerate, or "fluff up," and turn compost windrows allowing oxygen, water, microbes and bacteria to reach all parts of the pile evenly. Turners are available in many styles from tow-behind units to self-propelled machines.

A screen is required to separate oversized material and material that has not yet decomposed to assure that consistent material meets the market specifications required. Whether you choose a trommel or flat screen, you want to be able to change screen sizes quickly to meet market demands. A standard soil amendment or potting soil, for example, may require no particle larger than 51/48-inch to 11/42-inch minus in size, while a golf course may demand very fine material, such as 11/44-inch minus with no wood residues.

A bagging system may not be necessary if you are planning to market your compost in bulk - you may need just a loader and a trucker. However, if you want to market the product in bags at your local garden center, you will need to look into one of the many available bagging systems.

A picking station (essentially a large, elevated conveyor belt) also may be helpful if you plan to take in municipal yard waste in plastic bags. Some producers use a special trommel screen equipped with knives to rip the bags open and screen out the fines. Then, manual laborers "pick out" the plastic, metal and any other contaminants from the stream before grinding.

As if you haven't already faced enough decisions, here are a few more to consider:

* Size. How large is your operation going to be? More importantly, how big will you grow one, three and five years into the future? Leave a comfortable growth margin, say 5 percent to 10 percent per year, and plan your equipment needs accordingly. The projected incoming volume that you will need to process will determine the size of the grinder, screen, etc.

* Production rates. Reputable manufacturers will tell you the production range you can expect with a given machine. Better yet, ask for a machine demonstration at your site and measure the volume for yourself.

* Durability. Composting equipment takes a pounding. Lighter machines might cost less initially, but may not hold up. Compare weights, shafts, bearings, hydraulic systems, etc. When in doubt, go with the machine that may seem over built. It may save you money in the long run.

* Cost. Of course, look at price, but also look at owning and operating costs. Most manufacturers have a formula to determine the exact cost per hour of operating a given machine.

* Parts and service. Will you be able to get your hands on the right parts quickly? Can you count on service people when you need them?

* Reputation. Talk to people in the industry. Find out which companies are reputable.

* References. Ask your equipment salesman for the names of other facilities that are doing similar jobs with the equipment you are considering.

Doing all this research takes time, and no matter which machine you end up buying, equipment is a big investment. However, if you do your homework thoroughly, the equipment you select for your composting operation will give you a return on that investment in the long run.

With the help of a new standard, manufacturers, composters, end-users, consumers and regulators now can determine whether plastic products will biodegrade in composting facilities. The standard, D6400-99, Specification for Compostable Plastics, was issued by the American Society of Testing and Materials (ASTM) Committee D-20 on Plastics, West Conshohocken, Pa.

According to the standard, biodegradable plastic products must:

* Biodegrade at the same rate and to the same extent as known compostable materials such as yard waste and paper, and leave no persistent toxic residues;

* Disintegrate during active composting so that no distinguishable pieces are found on the screens; and

* Have no ecotoxicity that will affect the ability of the compost to support plant growth.

Prior to the standard, no widely recognized scientifically based specifications were available in the United States for identifying compostable materials and making claims about biodegradability and compostability in the plastics industry.

"These specifications will provide manufacturers the tools for developing resins and products that will compost satisfactorily," says Ramani Narayan, chairman of subcommittee D20.96 on degradable plastics. "This specification is comparable to what is being developed by CEN (European Committee for Standardization) in Europe today, and in harmony with the German standard (DIN V54900), moving the industry closer to global standards."

The standard is based on the results of five years of research by the ASTM's Institute of Standards Research (ISR), which tested the performance of biodegradable plastics at full-size composting facilities, as well as under laboratory conditions.

The specification also will serve as the basis for a certification and logo program being developed jointly by the U.S. Composting Council (USCC), Bethesda, Md., and the International Biodegradable Products Institute, Montreal.

"There are many products being sold today that don't biodegrade to the extent they suggest or in a rational amount of time," says Ron Alexander of R. Alexander Associates Inc., Cary, N.C., and market development co-chair for the USCC.

When the new logo is finished, it "will help composters, waste haulers and consumers quickly identify plastics that will biodegrade completely and safely when composted by municipal and commercial facilities," adds Sharon Barnes, president of the USCC. "Also, it will help eliminate the confusing claims that have existed over the past decade."

"ASTM Standards Pertaining to the Biodegradability and Compostability of Plastics," the document which contains specification D 6400-99 and the test methods for biodegradable plastics, is available by calling the ASTM's customer service line at (610) 832-9585, or through the ASTM website: www.astm.org

For more technical information, contact Ramani Narayan, Michigan State University, A2527 Engineering Bldg., Dept. of Chemical Engineering, East Lansing, MI 48824. Phone: (517) 432-0775. E-mail: [email protected]

Agricultural Composting Assoc. Call: Judy Gillan, (413) 323-4531.

Arizona Organic Products Committee. Call: Daniel Musgrove, (602) 944-0083.

Assoc. of Compost Producers. Call: Pam Linder, (760) 365-9015.

Biosolids Recyclers of So. CA. Call: Don Rebeck, (949) 489-7676.

CA Compost Quality Council. Call: Matt Cotton, (530) 305-2060.

CA Organics Recycling. Call: Rick Hartner, (760) 439-9920.

Carolina's Composting Council. Call: Cindy Salter, (919) 544-5324.

Compost Advisory Council. Call: Jody Slagle, (512) 929-1016.

Composting Assoc. Ryton Organic Gardens. Call: Michael Walker, (011) 44-1203-303-517.

Composting Assoc. of DE. Call: Nancy Gogg