Pierce Louis’s award-winning new company based in Portland Oregon is piloting a niche business model that could scale to become ‘ubiquitous’ as part of the next wave of recycling.
Dirt Hugger, which launched in August 2010, collects waste organic material – food scraps from restaurants for example – charges a fee and then processes the material into a nutrient-rich soil product which is sold to garden centres. The dual revenue stream creates economic and environmental value, but the key concept, says Louis, is local sourcing of organic waste management for groceries, hospitals, schools, restaurants and offices.
As part of the founding team’s due diligence they travelled widely to visit other facilities – in most cases to find their competition was a single very large facility, hundreds of miles away from the customer. The minimal capital investment in these facilities was £1m which required 40,000 tons to be processed per annum. Dirt Hugger’s require 5-10,000 tons per annum, and an initial capital investment of £100,000.
‘The most strategically important thing about this market was location,’ says 31-year old Louis. The idea is that by focusing on smaller, rural communities the model is more robust. ‘It’s a tighter closed loop economy rather like what works for distributed energy. That’s the niche’, he says.
‘It’s a fascinating business,’ says Louis. ‘There are lots of questions around recycling and where Dirt Hugger is, is potentially a huge segment, particularly where previously the waste material was going to landfill. This is an over-looked under-served area of the market’
He and his partner Tyler Miller first got the idea from a government agency report on organics management. They identified gaps in the market described by the report, and started working nights and weekends on the business plan before quitting their jobs in an aerospace and engineering company. They funded the business 50 percent themselves, on the profit share from their previous employer’s sale to Goodrich Aerospace, and 50 percent from grants. Dirt Hugger has won three grants, including the UK-based Myoo Create Grant to help launch the business and purchase capital equipment.
Having an MBA helped tremendously with taking the plunge, Louis feels. Mostly because it gave him confidence to let him do what he wanted, and provided exposure to lots of different areas. ‘Before I would have been interested, but would not have gone ahead. The hard skills, like being able to do the financial models, were also very important.’
Dirt Hugger has already composted over 500 tons of material, leading to over 50 tons of CO2 reduction and has ambitions plans to scale up.
www.dirthugger.com