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Posted: February 01, 2012

Small biz: Deal enables Waste Farmers to refine its plans

Mike Taylor

Denver-based Waste Farmers started out a little more than two years ago primarily as a compost collection and consulting service. Early clients included Snooze Eatery, Dazbog Coffee and Crowne Plaza. But founder John-Paul Maxfield says the collection aspect was just a means to an end.

The ultimate aim was to become an agriculture company further up the vertical chain that would refine compost - mostly discarded food and manure - into organic potting and planting mixes.

The company moved closer to that aim in mid-December with the announcement that Alpine Waste & Recycling, the largest independent waste and recycling company in Colorado, had acquired Waste Farmers' 96 commercial routes.

Alpine was the first company in Denver to offer commercial composting service, in early 2007, and the company expects these additional 96 accounts to add $312,000 revenues per year.

Even though compost collecting on those routes was generating six-figure revenues for Waste Farmers, Maxfield says, "There's companies that do it better, and we always knew that."

Not only that, but "It was $3,000 a month in insurance and $115,000 for a truck," he adds. "I'm excited to finally be able to highlight the fact that we are and have been from the start a sustainable agriculture company. It's nice to finally be out of the collection side of things."

Maxfield wouldn't disclose the price on the deal with Alpine but he said that money, along with additional capital the company is seeking, will help Waste Farmers to develop its compost refinement process and packaging for sales in lawn and garden stores.

Waste Farmers is selling composted products in bulk now and has a one-acre operation in Commerce City. The facility has been dubbed a "Microbe Brewery," in part because of the microbiological process involved in the compost refinement, but also as a nod to the state's more famous microbrewery industry, since Maxfield also views Waste Farmers as a "craft manufacturer."

Maxfield describes the compost market up until now as a chicken-and-the-egg conundrum: "The compost that's been created has been created by people who receive 90 percent of their revenues from processing and only 10 percent from the product," he says. "So the product's never been very good." Hence, the market has remained underdeveloped.

But, he says, "We're developing it." Among those developments is the introduction of "biochar," or bio-charcoal, in planting and potting mixes. "It comes from pine beetle kill and other recycled woody biomass," he says. "It's really exiting and promising."

Maxfield sees ample potential in a future customer base, pointing out that Colorado boasts the second-most organic acreage in the country. Then there's the growing urban farming movement. That includes the medical marijuana industry.

"I was a little hesitant about that initially, but the bottom line is, these are urban farmers, and they're the only urban farmers making money," says Maxfield, who grew up in a ranching family in Wyoming. "And they're helping to build an infrastructure because they have a cash crop that can allow companies like Waste Farmers and others in the sustainable agriculture industry to innovate, whether it's lighting companies or organic fertilizer companies or whatever, because they can absorb the higher costs. So they're developing the infrastructure for the farmer of the 21st Century."

Maxfield, 31, recently was appointed to Denver Seed, a task force set up by Mayor Michael Hancock to help make local agriculture and urban agriculture a part of the economy. The young entrepreneur says some time ago he wrote down as one of his goals that he wanted to help start a company that "kind of changes the world" before the age of 30.

"I think we're on track," he says. "It's been a long, slow process, but really we're just getting started."
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Mike Taylor is the managing editor of ColoradoBiz. He writes about small-business money issues and how startups are launched. Email him at mtaylor@cobizmag.com.

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