Home Depot gives TerraCycle a look

At TerraCycle, a dozen pool- sized vats brew up an organic liquid fertilizer that is packaged in used, recycled soda bottles for sale to consumers eager to speed the growth of their gardens and houseplants.

"I'll bet you've never seen this much worm poop," said company founder Tom Szaky, plunging a trowel in to a vat of worm droppings -- the raw material of his company's nitrogen-rich plant food.

In the two years since he began making organic fertilizer from worm excrement and packaging it in waste plastic bottles, Szaky has become a darling of environmentalists. But the 23-year-old Szaky -- who dropped out of Princeton in his sophomore year to start the company -- has always insisted he is building a business, not saving the planet.

Today, the Trenton-based company will announce a key milestone in its business plan: Home Depot has begun test-marketing the product in 47 New Jersey stores, and if all goes well, Szaky is optimistic the giant retailer will expand distribution elsewhere in the U.S.

TerraCycle is already sold in Home Depot stores in Canada and a number of U.S. retailers, including ShopRite supermarkets and Whole Foods, an organic grocery chain. The company expects revenue of about $500,000 this year, up from $175,000 in 2004, and sales could exceed $1.5 million next year if Home Depot expands distribution, Szaky said.

Home Depot spokeswoman Jen King confirmed the New Jersey test marketing began earlier this month, but would not discuss the company's future plans with TerraCycle.

TerraCycle is considered a "sustainable business" because it manufactures its products without harming the environment. Szaky said his company goes beyond the sustainable model because it reuses plastic bottles and removes them from the waste stream. Also called "green" businesses, a sustainable enterprise has a marketing edge with environmentally conscious consumers.

The penny or so TerraCycle pays for each used soda bottles -- many obtained from recycling centers around the country -- is less than soda makers pay for new ones. The company buys worm excrement from two of the 60 or so suppliers around the country.

"The trick to running a successful sustainable business is to be more profitable than an unsustainable businesses," Szaky said.

TerraCycle's cost are low enough that its organic fertilizer, retailing for less than $4 a bottle, can compete with traditional chemical fertilizers.

"Most people are not going to pay premium prices to buy organic," he said. "There is a future for sustainable business, if it's done correctly."

The private company is funded by private investors, who have put up $1.5 million so far. TerraCycle is now raising another $1.5 million as it expands production.

The company has 30 employees, and many of its production workers live in and around Trenton.

"This is a great labor market; the people we hire often have multiple skills," Szaky said. The company also brings in unpaid college interns, most of them during the summer. This year, the company had 400 applicants for 30 intern positions, he said.

Abe Diaz, a former welder who was laid up with a back injury for three years before joining the company two years ago as head of operations, said working at TerraCycle is an "adventure."

"I designed a lot of the factory -- how we brew the fertilizer, wash bottles, shrink the labels," he said. "Instead of metal, I've learned to work with plastic."

Beth Fitzgerald may be reached at efitzgerald@starledger.com or (973) 392-4111.