Growing a Grassroots Effort

Will Pollock

When nature's sometimes furious wrath steals headlines - tornadoes, typhoons or earthquakes, to name a few - the reduction of byproducts into compost could be a comparatively soft-spoken event.

However, with its new, forward-thinking marketing cooperative, Great River Regional Waste Authority, Fort Madison, Iowa, has begun to stir up a storm of interest around the composting business.

Great River's composting co-op forms a base on which both the public and private sectors can build their expertise while sharing equipment and resources, using the latest technology and maintaining a broader pool of end-users.

In Cooperation, They Compost In 1991, Bob Watson, the co-op's marketing director, joined Great River to investigate its composting program. At the time, the authority was working with woodwaste and other compost products, but was stockpiling them without a definitive plan.

The composting pilot program, which later evolved into the marketing co-op, got off the ground when Great River began bagging and selling this stockpiled product - albeit with tempered success.

"About three years into the program, we realized that we didn't have enough product to make it work," Watson explains. "We were able to take care of all of our smaller accounts locally, but to keep the program going, we needed to get more materials and generate more product. So, we invented the marketing co-op, which was designed specifically to give us that greater volume."

The co-op now is structured as a subsidiary of Great River, which is also a founding member. As a co-op member, a company or municipality receives services, such as on-site program assistance, bookkeeping, truck dispatch, monthly order reports and product/technical support, in exchange for the ability to sell and market its compost to a much wider customer base.

As the co-op grows, so does its ability to reduce operational costs for its members. "We are able to purchase in volume now," Watson says. "We can purchase all of our composting bags, shrink wrap and equipment together and receive a substantial discount. When we started bagging, we paid approximately 24 cents per bag, and now we're down to about 11 cents per bag because we purchase in bulk."

The benefits of multiple co-op members also can be seen in a diversified product assortment. Watson is particularly excited about a recent member company from Missouri that has a "significant amount of chickens." "We have begun working with the chicken manure and marketing that product for them," he says. "So, as far as product diversification is concerned, the program really is catching on."

Ringing up Sales to Retailers The program is catching on in other areas, too. In addition to marketing the compost end-product to landscape engineers and nurseries, the co-op has started to target retailers as buyers, which will be a lucrative dimension to the current customer mix.

The key advantage of marketing to retailers - aside from the additional sales volume - is that retailers make purchasing decisions in advance, and often purchase in bulk, Watson says.

"The retail chains know what they need every year," he explains. "By July or August, they know what type of product and how much of it they'll need for the coming year. This helps me in the budgeting process, and it also tells me what type of bagging schedule we should be on."

Expanding the market for compost into the retail sector and beyond will not only make budgeting a more exacting process, but it also will strengthen the co-op's overall mission, says Randy Nykanen, Great River's director of solid waste.

"We want to regionalize Iowa to be able to assist smaller compost sites in joining our program," Nykanen says. "It's difficult for smaller compost facilities to do [by themselves] what our co-op can do for them; they cannot afford all the necessary equipment to bag, apply quality controls and properly screen materials. If we all work together in regions, we can provide equipment sharing as though we were all just one large site."

The benefits to Iowa, as well as for other cities and states, are built into how co-op members must adhere to a high product standard.

"In order to sell the materials, the product must satisfy salable quality standards," Nykanen explains. "Under the co-op, we can set higher standards for these smaller sites in a regional fashion.

"From the state of Iowa's perspective, it's difficult to manage all these little sites while making sure they are providing a product that's safe for public consumption," Nykanen continues. "Hopefully soon, the whole state of Iowa will take the premier spot in the nation as far as being able to compost materials."

A Petition for Membership The quest to take a composting program to a regional and national scale has produced a future co-op member in the city of Hutchinson, Minn., which already has passed two approvals and is on the road to earning regional and state funding.

The city became aware of the co-op through one of its equipment vendors, Louisville, Ky.-based Powerscreen of America.

"[The Powerscreen representative] told us that they had provided equipment to Great River, and suggested that we take a look at its operation," says Gary Plotz, city administrator.

"A few colleagues and I went to Great River and were amazed at its physical size," he continues. "We were particularly interested in how it was bagging and selling its end-product, and getting a premium price per yard. Great River's cost per ton to process waste was the lowest I've seen in a long time."

According to Plotz, the $1 million grant from McCleod County, where Hutchinson is based, and the $1.4 million grant from Minnesota's Office of Environmental Assistance are aimed to help make the city's initiative a reality. Plotz expects to join the co-op officially once these grants are in place, which he predicts will be sometime next year.

"We'd like to join the co-op, but we must have our facility grant approved before we can execute a contract," Plotz explains. "I have a drawn-up contract that [Great River] provided, but I need to be able to deliver the capacity it requires before finalizing.

"Initially, we expressed interest [in Great River] only to view its composting work," he continues, adding that Great River's retailer initiatives made membership in the co-op all the more attractive.

"Once we discovered its success in bagging and having a marketing arm to interface with large retailers and hardware stores, things came into better focus," he says. "A city like ours has neither the marketing expertise nor the time to make contacts and develop rapport to form service contracts."

Once Hutchinson's program is online with the co-op, Plotz expects his location to produce four different types of compost in the area of 300,000 bags per year, with the capability for 500,000 bags per year in the future.

Because hauling compost is costly - especially for such a high product volume - Great River's plan of joint marketing and resource sharing will be a huge selling point to members and customers alike, Plotz says.

"Part of the co-op's uniqueness is that it [is trying to] get a consortium of cities that are strategically located to minimize transportation costs, which is a big factor in selling compost," Plotz says. Members' compost-hauling burdens will be lessened, he adds, if the co-op can "geographically sprinkle those members around."

Watson agrees, noting that hauling compost historically has been the biggest obstacle to overcome in this industry segment.

"The most important issue is freight," Watson says. "The more members we have, the more complicated it becomes. Bagged compost only can be shipped approximately 200 miles to make any money. So, if we have members of the co-op [in many regions], we can offer the type of service the customer wants."

Tapping New Growth Areas If natural selection truly means survival of the fittest, then Great River's service-oriented marketing co-op will not settle for its current exercise regimen. The co-op already has identified other growth areas for composting, including a major, as-yet-unnamed institutional producer of compostable material that would benefit from the co-op's services, Watson says.

"There are industries that have problems getting rid of some of their byproducts," Watson explains, adding that this particular company could make an enormous environmental impact by diverting its materials from landfills. "[This company's] product, 120 tons of egg waste per day, is difficult to get rid of because of its large volume. But it doesn't have to be landfilled. Composting is one of the clear options available.

"There are special needs that go into dealing with such a situation, and that's where our technical expertise comes into play," Watson continues. "We can help this particular industry get rid of what would otherwise be a big problem."

The Great River staff's expertise is portable and transferable, Plotz says. For example, he notes that Watson has paid multiple visits to the city to ensure that the Hutchinson site comes online successfully. "Bob helped design our facility as part of our grant," he says. "He's advised us on everything from the tip floor to how the bagging operation will work and how the boating docks should be designed. He has provided that service in anticipation of entering into an agreement with us."

"Every composting place I've seen generally has had to learn the hard way," says Nykanen, who explains that sites sometimes can benefit the most from the individual attention a marketing co-op can provide.

Nykanen notes that Great River's satellite co-op members no longer have to begin at ground zero. "The Great River co-op saves other companies, cities and states from having to continually reinvent the wheel," he says.