Food Waste In, Renewable Energy Out: Startup Re-Nuble Is Crowdfunding the Local Green Economy
As the memories of rationing and victory gardens fade from its collective consciousness, the United States has become a nation of supremely wasteful eaters. A recent report by the Natural Resources Defense Council (NRDC) found that Americans routinely throw away 40 percent of the food on their plates, which amounts to $165 billion a year in wasted resources. For anecdotal evidence of our prolific wastefulness, look no further than reports earlier this month that middle and high school students are responding to federally mandated healthier lunches by throwing them away. For whatever reason, we just don’t seem to care much about getting the most from our food.
As a result we generate massive streams of food waste–mountains of half-eaten apples and pizza crusts. By throwing away hundreds of millions of tons of food per year, we throw away the opportunity to harness the energy and valuable elements it contains. On top of that, most of the food we throw away is buried in landfills, where it can never again be put to productive use, wasting away next to old microwaves and leaking batteries. And the problem is only getting worse. According to the NRDC study, the volume of food waste generated in the U.S. has grown by 50 percent since the 1970s, and food waste is now the single largest component of solid waste in U.S. landfills. The solution to this problem is clear: separate food waste from the rest of waste generated by cities and towns (known as municipal solid waste or MSW), and find other ways to harness the energy and useful elements it contains.
Enter the Washington, D.C.-based startup Re-Nuble, which offers a localized solution to the food waste problem. Re-Nuble begins by accepting the discarded organic waste (mostly food but also plant wastes like yard trimmings) produced by food processing plants, schools, supermarkets, wholesale food distributors, and other large food waste generators. Re-Nuble digesters then naturally break down the organic waste and, in about three weeks, produce two valuable byproducts: methane gas or “biogas” that can be turned into electricity and organic fertilizer that can be used in organic farming, gardening, and landscaping.
Re-Nuble is the brainchild of CEO and founder Tinia Pina, a native of the D.C. metro area who recently returned to Washington after six years of living in New York City. Impressed by New York’s commitment to sustainability and long roster of environmental initiatives, Pina saw the lack of an organic waste collection program as an important missed opportunity. She noted the limited success of small-scale organic waste collection and began thinking about bigger solutions. “I think like most people, it pains me when I’m unable finish a gallon of milk or bagged fruit before it spoils,” she explains. “This concern, combined with my passion for environmentalism led me to create a model that could combine corporate and community interests.”
Re-Nuble is one of hundreds of small businesses around the U.S. that occupy a relatively new space in the national economy: “social enterprise” companies that deliver benefits to their communities while at the same time providing valuable goods or services that allow them to eventually turn a profit. In the Re-Nuble model, municipalities benefit from more sustainable waste management (e.g. lower transportation and disposal costs that come with reducing MSW volumes) and the economic perks of building and operating an organic waste digester (e.g. job creation). Re-Nuble’s business partners benefit from lower waste disposal costs, lower energy costs, and sustainable operations that can help strengthen community relationships. Additionally, Re-Nuble’s philanthropic-based marketing strategy invites corporate partners to benefit from brand enhancement and have a direct, positive impact on their communities.
Pina created the Re-Nuble concept with the goal of bringing together environmental solutions, social benefit, and private sector profitability in communities around the country. “Being a social enterprise means that our mission is to use the power of business for public benefit. We are committed to improving the lives of residents in metropolitan areas, creating jobs for marginalized populations, and restoring ‘green vitality’ to our communities,” she says. Although social enterprise operations like Re-Nuble are similar to other fledging businesses, their unique goals often require unique approaches to organization and financing. “Our goals are simply not compatible with those of short-term profit associated with traditional venture capital funding,” Pina explained. “We’re trying to harness grassroots interest in making communities more sustainable to help fund our projects, and we believe crowdfunding is one of the best ways to go about that.” Crowdfunding, a close relative of crowdsourcing, involves raising money from a broad base of interested donors or investors, usually through a Web-based campaign. For Re-Nuble, whose campaign launched on Monday on the site indiegogo.com, crowdfunding will hopefully provide the seed money to fund their first organic waste digester, slated for construction with their first corporate partner.
Led by the success of kickstarter.com, which caters to creative projects in search of financial support, crowdfunding is a rapidly growing influence on the U.S. economy. That growth is expected to accelerate in 2013, when the provisions of the Jumpstart Our Business Startups (JOBS) Act take effect. The JOBS Act passed through Congress with bipartisan support and was signed into law by President Obama in April of this year. Among other things, the law relaxes regulations on how small businesses can seek out funding and investors, with the explicit goal of making crowdfunding more accessible to startups. The law is expected to give a significant boost to small renewable energy companies taking a different approach to greening the American energy system–moving away from large-scale, centralized generation and long-distance distribution and toward small-scale generation from renewable sources. Huffington Post blogger Andy Mannle predicted that the policy changes in the JOBS Act will speed up a much-needed “paradigm shift” in the U.S. energy sector and help create an energy system “that is as localized, diverse and networked as the Web; where people can produce, store, share and sell energy the way we currently do with information on the Internet.” As a potential small-scale generator of renewable energy, Re-Nuble is well positioned to play a role in that shift.
According to Pina, the JOBS Act and the expanded crowdfunding it will enable also speaks to the recent trend of active and interested micro investing. “People are increasingly interested in building personal connections to their investments,” she observes. “The JOBS Act facilitates this by creating local jobs and measurable impact while giving regular people and not just Wall Street bankers a chance to become investors.” In addition to planting itself in the space carved out by shifting investor attitudes and regulatory reforms, Re-Nuble’s model allows it to skirt the potentially controversial issues of accepting government funding and relying on tax incentives. This election season, the bankrupt solar energy company Solyndra has become a barbed case-in-point argument against government funding of big renewable energy projects. Solyndra’s spectacular failure that came after it received hundreds of millions of dollars in federal loan guarantees has soured potential investors on the renewable energy market. But smaller-scale, crowdfunded operations like Re-Nuble offer lower risk and the opportunity for donors and investors to see exactly how their contributions are improving their communities. Pina, whose professional background is in finance, is well aware of Solyndra’s missteps and is incorporating lessons learned into her company’s planning and fundraising efforts. “Our goal is to scale with demand and not ahead of it while incorporating a capital-efficient rather than capital-intensive business model,” Pina says. “Re-Nuble was created to provide localized activism and solutions and to serve ‘local first’ goals.” This focus on efficiency and local benefits allows Re-Nuble to remain nimble and avoid becoming a bloated renewable energy boondoggle, she elaborates. Pina and her colleagues are eager to “prove that we can establish credibility of our model and scale without relying on government subsidies.” The community-oriented nature of the business also allows Re-Nuble to ensure there will always be local demand for their valuable end products of green energy and organic fertilizer.
While today’s political debate pits solutions to environmental problems against economic growth as a zero-sum proposition, startups like Re-Nuble are quietly coming up with sustainable and economically viable ideas. Situated at the intersection of social consciousness, environmentalism, and old-fashioned American entrepreneurism, Re-Nuble could prove to be one of the founding members of a localized green economy revolution powered by crowdfunding, ingenuity, and renewable energy. Tinia Pina, for one, believes that the country and the world are ready for this revolution. “The market and more importantly the community is ready to adopt this type of business model,” she says. “We are hoping to build a loyal community of evangelists and customer base that believes in our mission.”