EMERYVILLE, Calif.--For a pair of University of California business school graduates, innovation isn't coming in the form of transistors and circuits but rather coffee grounds and mushrooms.
With their new venture, called Back to the Roots, entrepreneurs and accidental farmers Alex Valez and Nikhil Arora are hacking the system. The coffee system, that is.
Here, at a Peet's Coffee & Tea location on Vine Street in Berkeley, Calif., Shift Manager Levi Borras empties coffee grounds that BTTR Ventures will collect to use as the soil base for their mushroom growing kits.
This Easy-To-Grow Mushroom Garden is the fruit of Valez and Arora's labor.
I recently went to Emeryville, just across the Bay Bridge from San Francisco, to see how the BTTR (pronounced "better") program works.
BTTR provides six nearby Peet's cafes with a dedicated bin for the grounds, and the baristas simply dump each day's spent beans and filters in their BTTR bin, waiting for the next morning's pickup.
The beans are then transported to a warehouse to be used as the basis of miniature mushroom farms, which are then sold to consumers.
For Valez and Arora, these grounds serve as the foundation for their business. For Peet's, it's a way to save a little on waste disposal charges, which can run up to hundreds of dollars each month, while contributing to creative reuse of what would otherwise be trash.
More than 2.4 billion pounds of coffee are sold each year in the United States. Each morning, those delicious little beans are roasted, ground, and turned into our favorite warm morning beverage. But what happens to the used grounds? For the most part, they're thrown out.
Valez and Arora saw opportunity in the resulting piles of brown-black mush.
Here, outside the duo's warehouse space, the morning's haul has just pulled up in the company van that's used to collect the used coffee grounds.
The inspiration for these accidental farmers came during an undergraduate business class at the University of California at Berkeley, when a professor made a tangential comment about the ability to grow mushrooms in coffee grounds. With their interest piqued, Arora (shown here) and his eventual business partner Valez each followed up with the professor after class. The professor introduced them, and their partnership began.
During their spring break from classes in 2009, they did some testing to see if the process of growing mushrooms in used coffee grounds was viable.
The pair experimented with mixtures of coffee grounds and inoculated spores. Out of 10 buckets left to sit over the week, when they returned, one was blooming with mushrooms, and they realized their idea was actually possible.
The high pH content of the grounds provides a great base for the mushrooms, says Arora. The commercial viability has been tried before, he says, but agricultural experts told him many times throughout his research that the plan wouldn't work; that the coffee grounds were too dense to grow in, or that the used grounds would become too dry to sustain mushrooms.
But after a few months of experimentation in style and method of growing, the pair found success. With a few tricks, they are turning garbage into a real business.
Inside the work space, in a climate controlled room, sit bags full of pure coffee grounds inoculated with mycelium.
After a few weeks of growth, the grounds harden, the spores having taken root, transforming the once discarded grounds into a tiny mushroom farm, ready to be shipped to kitchens across the country.
Within a few months after their initial idea, the two had secured a $5,000 grant from U.C. Berkeley, which they used to purchase a $1,000 used mini van that Arora says breaks down all the time. The other $4,000 went to rent, and they secured a warehouse space in Emeryville. Arora says none of the surrounding T-shirt companies, artists, or musicians ever expected mushroom farmers to move in alongside them, but the space fit their needs.
Arora says their idea so rapidly turned into a growing business that they didn't have time to plan for anything.
It's a bootstrap operation where everything is DIY--and for now, Arora says, they like it that way. They are learning as they go, with lots of helpful input, Arora says, from Whole Foods, which is consulting with the duo on everything from office organization to design, packaging, and brand marketing. Arora and Valez make all creative decisions, such as use of colors, fonts, and graphic design, and packaging is done in-house.
Initially, BTTR was growing mushrooms on site, in indoor plots. After a few weeks of growth, they shopped the mushrooms around the town. They drummed up interest at well-renowned restaurant Chez Panisse, at Whole Foods, and at regional food markets like Andronico's and the Berkeley Bowl.
But after a few months, they found the large amount of space needed to grow the mushrooms was cost prohibitive in an urban area, and they decided to go a different route.
The pair decided to focus on their kits, the Easy-To-Grow Mushroom Garden, a simple box designed to sit on your kitchen counter.
With a start-up mentality and a business that is beginning to boom, the pair dedicates its few resources to growth.
Here, bags of inoculated grounds wait to be shipped. Currently, BTTR is producing about 600 to 1,000 kits a week.
Nearby coffee shops with free Wi-Fi serve as their office, and Arora says the business is almost entirely run with free Web services, including Google Docs for paperwork and filing, and a Google Voice number as the office phone number, useful for making cheap overseas calls.
It's a learn-as-you-go process, Arora says. The DIY mushroom kit comes with a small spray bottle, which is used to mist the kit with water twice a day. Originally, they ordered a batch of the small water bottles from a distributor, but soon learned they could buy the product straight from the source, and eliminate the middleman.
But with international business relationships came more unexpected hassles. When mist bottles from China arrived at the Port of Oakland, the pair received a call to come pick them up, and were astounded by the barrage of paperwork: duties, customs, fees, and pages and pages of forms to fill out. "I felt like I was signing my life away," Arora says. A few more signatures and forms, and X-ray scans of the containers, and they were on their way. "I see why people choose to deal with the middleman."