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Firm employs worms to create its prime product
Published in the Home News Tribune 02/5/05
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| HOME NEW TRIBUNE/2004 |
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| Top, red worms slither their way through composted organic waste at TerraCycle's production plant in South Jersey last year. Above, the packaging for TerraCycle Plant Food. |
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By KEN TARBOUS
BUSINESS WRITER
A Trenton-based organic-fertilizer maker has hit the retail big time.
TerraCycle Inc., founded in 2001 by a Princeton University dropout and some classmates, has sealed a deal with Wal-Mart Canada to sell TerraCycle Plant Food at 256 of the big-box stores.
"This means not only making our whole business model of taking products and making them completely from garbage valid, but it starts getting us very close to total break even," TerraCycle's 23-year-old CEO Tom Szaky said by phone yesterday. "That, from a startup perspective, is a very important deal."
Szaky expects $3 million in sales in '05, far surpassing '04 sales of $250,000.
He and some friends founded the "eco-capitalist" firm in Princeton, based on a business plan developed as part of a university course.
The company expanded to a larger facility in Trenton last year.
Marketed for use on flowers, house plants and vegetables, the fertilizer ? a manure tea ? is made almost completely from waste.
The raw materials for the plant food are paper sludge, coffee grounds, beer hops and other select raw organic material otherwise destined for landfills. The packaging uses end-run sprayers, misprint boxes, and old soda bottles. The shrink-wrap labels contain more than 80 percent recycled plastic.
The waste is fed to millions of red worms, and in about three weeks they poop out the product, according to TerraCycle.
With 30 full-time employees, the upstart fertilizer manufacturer will ship the first Wal-Mart order from TerraCycle's Trenton production facility on Monday, Szaky said, and the bottles should be in stores three days later.
Getting into the mix of products sold at Wal-Mart wasn't easy for TerraCycle, but matching the price needs of the retail giant was a bit simpler.
"It was exceptionally difficult to get the meeting," Szaky said. "The unique thing about our product is, for example, we procure bottles at half-a-penny a bottle . . . and because everything is made of garbage we're able to price our product very low and give Wal-Mart high margins."
Greater customer interest in environmentally sensitive products, and the grass-roots movement toward local laws in Canada regulating chemical-fertilizer use, helped TerraCycle's pitch to the retailer, Kevin Groh, a Wal-Mart Canada spokesman said.
"And it's a great product," Groh said.
Wal-Mart Canada will sell a 20 oz. bottle of TerraCycle's Indoor Plant Food for the equivalent of $4.99 U.S., he added.
The product's primary consumers are women 30-60 years old, Szaky said, but the green-business approach has generated excitement in all demographic segments of the population, especially in Canada.
A Canadian TV documentary on TerraCycle airs tomorrow evening, and Szaky will pitch the plant food on QVC in March, he said.
Szaky grew up in Canada, and TerraCycle, headquartered in Trenton, has locations in Toronto, Ontario, and Ithaca, N.Y. The company hopes to add to production capacity at its 20,000-square-foot Trenton facility.
TerraCycle's Plant Food is sold at a limited number of Loblaw Cos. Ltd. supermarkets and will be available at 200 Zellers Inc. discount stores in Canada in the summer, he said.
"Our goal now is to really make sure the product sells, and if it does well then, hopefully move it down to the U.S. in a big way."
Ken Tarbous:
(732) 565-7319;
ktarbous@thnt.com
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