This post was originally produced for Forbes.
The Food and Agriculture Organization of the UN estimates that “roughly one-third of the food produced in the world for human consumption every year gets lost or wasted.”
Recognizing the journalistic injunction to avoid hyperbole, that truly is an enormous problem.
Justin Kamine, his brother Matthew and his father Hal determined that was just what they were looking for: an enormous opportunity. The Kamines have been developing infrastructure scale-projects since the senior Hal got into the cogeneration business in the mid-80s.
Justin Kamine joined me for a discussion about the company the family founded, KDC Ag, to tackle the problem.
The food waste problem also gives them an opportunity to address social and environmental problems they feel a desire to fix.
Food waste contributes to climate change as all the food that ends up in landfills required substantial energy to get there. Furthermore, the soil we use to grow crops is being consistently depleted; chemical fertilizers fail to restore all of the nutrients lost.
Those chemical fertilizers, Kamine says, are overused. The first 50% of the nitrogen added does 80% of the good; the second 50% largely is lost to runoff, resulting in huge dead zones, especially in areas where runoff is concentrated in the Gulf of Mexico near the mouth of the Mississippi River.
Matthew Weatherley-White, Managing Director at CAPROCK, asked for comment, said, “Petroleum-based fertilizers mean, as Michael Pollan is fond of saying, that we are all eating oil.”
KDC Ag’s board of directors is comprised of luminaries, including former U.S. Secretary of Agriculture, Ann Veneman and philanthropist Howard Buffett.
Kamine cites Buffett as suggesting that conventional farmers need to be “much more environmentally sensitive and progressive.”
Six years ago, the Kamines invested in California Safe Soil, which has been working with the University of California at Davis to develop a process for converting waste food into fertilizer and animal feed. With that technology now commercialized, the Kamines formed KDC Ag to bring the technology to infrastructure scale with a goal of eliminating food waste over the next five years.
The new process mimics human digestion; they sometimes refer to it as compost 2.0. Waste food can be converted to fertilizer or animal food in three hours and is available for use the next day.
The KDC Ag process starts with virtually any supermarket waste food, including fruits and vegetables, meats and baked goods. The food pellets that result taste “like raisin bran,” according to Kamine. The pellets are fed to chicken and pigs. The Food and Drug Administration prohibits feeding the products to cows.
The liquid fertilizer can be added to a farmer’s drip irrigation system providing for precision agriculture that returns a broad range of nutrition to the soil. Food contains relatively little nitrogen so conventional farmers have KDC Ag add nitrogen to the liquid fertilizer. Organic farmers use it as it comes out of the system.
Craig Wichner, Managing Partner of Farmland LP, which invests in conventional farms and converts them to organic production, notes, “Using supermarket food waste to create fertilizer is completely philosophically aligned with organic production. They are taking a known good product (food at supermarkets), and closing the loop on the waste, converting it quickly and efficiently back into food for plants.”
The production process is sufficiently benign to be conducted in urban areas near the supermarkets supplying the food, allowing for an efficient backhaul distribution model employing trucks that deliver food to the stores to return to the farms carrying feed and/or fertilizer.
Because post-consumer food typically contains too much salt for a healthy soil amendment, those food wastes are not good candidates for the KDC Ag process.
Kamine was recently invited to participate in a clean tech competition hosted by the Prince of Monaco. Against 30 invited competitors, KDC Ag won the Clean Tech Equity Award.
What initially appealed to the Kamines, who report having $3.5 billion of infrastructure in their other businesses, is the scale of the opportunity. They hope to be operating in all 50 states within five years.
They earn approximately the same margin on both the feed and the fertilizer, allowing them to adjust according to demand without an impact on the bottom line. The margins are good enough, according to Kamine, to allow the company to invest quickly to scale up the business.
The KDC Ag process will reduce chemical fertilizer use, reduce carbon emissions, increase crop yields 10 to 40% and reduce water consumption all while reducing food waste at a potentially massive scale.
As an impact investor, I’m intrigued. Clear benefits to healthy soils. Equally clear benefits to landfill management and organic waste therein (including landfill-released GHG reduction). Using organic, composted fertilizer on crops is a fantastic benign-by-design chemical replacement. And the potential for scale is certainly compelling: the combination of food waste reduction and ag chemical substitution could be a massive opportunity.
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Devin is a journalist, author and corporate social responsibility speaker who calls himself a champion of social good. With a goal to help solve some of the world’s biggest problems by 2045, he focuses on telling the stories of those who are leading the way! Learn more at DevinThorpe.com!