Dirty Business
Thanks to a horde of ravenous worms, TerraCycle is turning garbage into dollars. By Chris Warren
Tom
Szaky is convinced that he’s found a miracle substance that will both
make him millions and save the world: worm poop. Yes, it may sound
laughable, but don’t be too hasty to judge. Szaky, a scruffy
25-year-old Princeton dropout who founded TerraCycle, a small company
based in Trenton, New Jersey, that makes organic plant food by using
worm excrement (known as castings) as the key ingredient, can weave a
pretty compelling case.
See, to Szaky, there are some
fundamental, perhaps even fatal, flaws in the way our capitalist system
currently functions. Most companies, he says, are concerned only with
profits and are more than willing to pollute the environment and create
mountains of waste for others to clean up if doing so means boosting
the bottom line. Szaky believes that companies that go against that
paradigm — in other words, those that are socially responsible —
usually have to raise their prices and lower their profits. “That’s
why, in general, organic foods, fair-trade foods, eco-friendly products
cost more,” he says.
Not only do those products cost more,
Szaky says, most people just aren’t willing to pay a premium for them
simply because they’re green — which is why TerraCycle’s
worm-poop-fueled plant food is no more expensive than similar
nonorganic products. What Szaky sees as necessary for the future, and
what he believes TerraCycle is an example of, is a new model for doing
business: eco-capitalism. Forget recycling and trying to reduce
Americans’ consumption, he says. Instead, get rid of the idea of
garbage and waste altogether. Do that on a worldwide basis, and
pollution goes away, the environment is healed, and people can still
buy and consume what they please. “Waste is a man-made concept. In
nature, waste doesn’t exist,” he says. “The only reason waste is waste
is because we haven’t figured out what to do with the material once we
use it the first time. If you can find uses for waste, you can
eliminate the idea of waste.”
BY “WE,” OF COURSE,
Szaky really means everybody else. He and his colleagues at TerraCycle
have done just fine jettisoning the whole concept of waste. Their plant
fertilizer, which is available in the United States and Canada at
Wal-Mart, Home Depot, Target, and Whole Foods Market, is packaged in
soda bottles collected by what TerraCycle calls its Bottle Brigade,
made up of school groups and nonprofit organizations around the
country. The groups collect bottles and send them to TerraCycle, which
pays them for their efforts. It’s a virtuous circle: The groups get
cash, and TerraCycle raises its profile, generates goodwill, and, most
importantly, gets the bottles it needs. The containers aren’t the only
secondhand goods TerraCycle uses; the company’s computers are castoffs
from corporations, and some of its furniture came from Princeton
University dorms that were undergoing an upgrade.
Then there’s
TerraCycle’s product, which itself is waste-based. A good way to get
Szaky, who grew up in Canada after his parents fled then-Communist
Hungary, fired up is to ask him about the virtues of red worms. Night
crawlers, which are what most of us see when we dig up a spade full of
soil, are all well and good, he says, but they burrow and don’t eat all
that much, which is not cool if the success of your business is
dependent on huge volumes of worm excrement. Red worms, on the other
hand, don’t burrow and are, to say the least, eating and pooping
machines. “They eat [the equivalent of] their body weight every day,
and they double in population every 90 days,” says Szaky, with more
than a little enthusiasm. “They’re fantastic for this type of process.”
While
Szaky won’t disclose exactly what his worms are fed (think of it as
Coca-Cola’s secret formula), he will say that about half their diet
consists of nitrogen-based items, like grass clippings and coffee
grounds, and the other half consists of carbon-based items, like paper
products. The important thing to remember is that the food the worms
eat is essentially garbage. So in one swoop, TerraCycle takes garbage
people want to get rid of and feeds it to worms in order to make a
product it can sell. Waste, indeed.
BEFORE THE WORMS
feast on it, their grub is composted and cooked in a vat. The food and
the worms are placed together on a conveyor belt, creating a feeding
frenzy that would make Homer Simpson sick with jealousy. “On one end,
you put in cooked material, and the worms eat that, and [when it’s
gone], they’ll move out of their own poop and into new food,” says
Szaky. As the worms eat, the conveyor belt moves in the opposite
direction of their travel at the pace of their ingestion, about an inch
every five hours. “They’re on a perpetual conveyer belt — food at one
end and poop out the other,” he says.
The poop alone isn’t the
product, of course. To get the actual plant food, which is technically
known as vermicompost tea, TerraCycle adds oxygen and water and then
brews and stirs the mixture for 48 hours. “We make this really potent
organic tea, and the liquid becomes our plant food,” says Szaky. The
brew then goes into the recycled soda bottles, which have been cleaned
and wrapped in a colorful TerraCycle label, and is sent to retailers.
In keeping with the mission of the company to create no waste,
TerraCycle takes the by-product created by brewing the tea and uses it
as the raw material for other products like potting mix.
None
of this would mean much if the resulting plant food, though ingenious,
were ineffective. But judging by sales — which have grown from just
$70,000 in 2004 to $1.5 million in 2006 to $2.5 million for the first
half of 2007 — plenty of consumers think it works. Szaky insists that
the 70,000 microorganisms living in it are what make it so powerful;
picking up a bottle, then, means buying something that is, in effect,
still alive and kicking. “These microorganisms help fight disease; they
help bring nutrients to the roots — it’s like an ecosystem,” he says.
“One of the big problems people have, especially in America, is they
douse their garden with chemicals, which wipes out all the bugs that
live in your garden. But the bugs actually help your garden.”
SZAKY COFOUNDED
TerraCycle in 2002 with one of his Princeton roommates. With the
company’s growth has come a maturation. What started as little more
than a collegiate lark has slowly evolved into a more serious
enterprise, albeit one whose founder wears a uniform of a baseball cap
and jeans and whose employees at the company headquarters in an
inner-city area of Trenton never don a tie. As the business has added
staff, Szaky has brought in people with a lot of experience at large
corporations. His leadership style has also evolved, although Ellen
Gaughran, TerraCycle’s head of human resources, says one of the bigger
challenges for the company’s more seasoned executives is to keep Szaky
focused. “Because of his entrepreneurial energy, he wants to do so
much, and we have to rein him in,” she says. “He wants to produce 25
new products next year. Well, it’s almost physically impossible to do
it. It’s about harnessing his energy and passion, because he’s got so
much of it.”
Szaky’s passion for changing the world through worm
poop remains undiminished, and his approach to eco-capitalism continues
to lure new people to TerraCycle. While he’s happy to talk about how
green the company’s products are, he feels like he’s already making
progress, because so many of his customers don’t know a thing about his
philosophy: “People are buying it and don’t even realize how
eco-friendly it is, because they’re buying it [based] on price and
performance,” he says. “Isn’t that the best reason to buy it? It should
just be made that way anyway, and then when people find out how green
it is, it’s awesome.”
CHRIS WARREN is a Los Angeles–based freelancer who also writes for the Los Angeles Times Magazine and Forbes.