Divert Scales Food Waste Reduction Plans Across North America

What will it take to meaningfully chip away at a pervasive food waste problem in the U.S.? That’s the roughly 100-million-ton-a year question that municipalities and industry have been trying to answer for years. Divert is among the private-sector players in this space, strategizing ways to turn mega volumes of would-be rotting organics into product, beginning with targeting grocery store waste. The Massachusetts-based operation is making good headway.

Its retail customer base grew nearly 35 percent in 2022 to include nearly 5,400 retail stores (such as Ahold Delhaize, Albertsons, CVS, Target, and Kroger), with more contracts slated for 2023. The latest lifts are an offtake agreement with bp and $1B from Enbridge to build out infrastructure to make renewable natural gas (RNG).

Kroger became Divert’s first customer when the tech company built and operated an onsite anaerobic digester at the grocery chain’s distribution center in Los Angeles. Owned by Kroger the operation works through reverse logistics, allowing inventory that can’t be sold or donated to be brought in from over 300 stores.

Trucks deliver fresh groceries to stores, along with bins that stores fill with food that otherwise would be tossed. It’s sent back to the distribution center, where it’s consolidated and processed.  Operators screen out containers with depackaging technology and send those containers to landfill or for incineration. Processed liquid, which comprises most of the mix, is fed into the digester to ultimately produce renewable electricity and for heat used on site.

“That was our first commercial success story. We built a similar facility for Stop & Shop in Massachusetts. Then we realized that building these facilities at customer distribution centers was a slow process because you are asking a lot of customers, and there are limitations due to [an operation’s] size,” says Ryan Begin, CEO and co-founder, Divert. 

He and his team began down a new path to capture more unsellable food.

What’s different is that while the first partners, Kroger and Stop & Shop, own their plants and Divert only runs them, Divert funds and owns the newest operations, and these plants are no longer dedicated to just one chain. That means more organics from more sources, while the food retailers who provide feedstock still reap the sustainability benefits of diversion and monetary benefits of avoided landfill disposal costs.

A liquid slurry made from what’s collected moves on to third-party anaerobic digestion operators, enabling Divert to scale fast without building out a fully integrated system of its own. The evolving model is resulting in a big jump in food recovery. Begin believes that number will climb to 5 percent of U.S. food waste (excluding farm waste) once the company scales to 30 markets as planned in the next eight years.

He does not name specific regions other than Washington and Pennsylvania, two states where the tech company already operates but is permitting more locations.

Activity has picked up since Enbridge invested $1B for infrastructure and since an April groundbreaking in Turlock, California of a plant to service unnamed food retailers. The company will be producing RNG and double its food processing capacity in California.

The search is on for more packaged food and, in time, possibly food from other kinds of generators.

“Food packaging is seen as some of the most difficult material to process as it’s heavily contaminated and hard to sort. But it’s our bread and butter. We want the food waste with contamination, as we do not need for it to be separated since we do it mechanically,” Begin says.

Commercial and residential markets could be future targets, he says, especially residential given that there would be no compliance issues around packaging, produce stickers, or other contamination-related pain points for compost operators.

While organic waste is money to businesses like Divert, the team thinks about how to not fuel an already hulking problem.

“We do not want to create incentives to make more wasted food. Rather it’s up to us to help folks understand where waste goes, and we want to play an active role in reducing it.”

Part of that is awareness. Divert leverages technology to capture images loaded to the cloud and provide data showing customers what they are tossing, lending insight enabling them to reduce waste at the store level.

Inevitably there will be some food that can’t be sold or donated, but at least partner retailers are changing in their thinking and their practices.

“[Historically] they opened the back door and threw food in dumpsters, and that was the end of it. But when you start to look at what you are throwing out, and when you take time to separate it [for collections] you look at food differently. You look at what you throw away and why,” Begin says.

As far as offtakers, he sees the voluntary market that’s investing in renewable energy as strong partners. They are not mandated to buy an alternative to fossil fuel but may have internal requirements to meet ESG metrics.

“They are working to achieve these goals, and we are interested in partnering with them—groups like bp who we contracted with in the fall of 2022 for our first three facilities. They are excited about the voluntary market,” Begin says.

The $1 billion agreement with Enbridge should serve as a catalyst to go farther. The Canadian-based energy infrastructure company, which moves about 20 percent of the natural gas in North America, acquired a 10 percent stake in Divert for $80M. The collaboration includes an agreement for wasted food-to-RNG projects across the U.S.

Enbridge has been in the RNG space in Canada since 2011 through its utility/natural gas distribution business, and has looked at infrastructure opportunities in the U.S.

“RNG gas is a key pillar as part of our energy transition strategy. It’s a drop-in carbon-negative fuel that can replace conventional natural gas on a one-to-one basis in our pipelines,” says Caitlin Tessin, vice president, strategy and market innovation, Enbridge.

“When it comes to the feedstock to create the RNG, Divert is absolutely a leader in wasted food management, with a 15-year track record working with some of the largest grocers in the U.S., including to donate food, which is attractive to us in terms of the ‘S’ in our ESG, and then to keep food out of landfills and reduce methane that way,” Tessin says.

Divert’s mid-term future ambition is to set up operations within 100 miles of 80 percent of the U.S. population by 2031.