After selling the tech business he’d built over 15 years, Eric Walter wanted to do something more rewarding. “More fulfilling spiritually,” he says. “Out from behind a desk and outside.”
His Chicago tech business, Gorilla, had Patagonia as a client. “Sustainability infused everything they do,” says Walter. “That changed something for me.” After considering a few different environmentally sustainable business ventures, Walter founded a food scrap-composting facility and compost-hauling business.
“I’d always been a recycler,” he says. “And I liked that composting physically turns waste into a cool end product.”
Black Bear Composting, which launched in 2011, remains the only local commercial composting business. Though the company partially closed in 2016, Walter brought it back from the brink of extinction by adjusting his business model and working with his clients to build a company that is sustainable, in all senses of the word.
The beginning
Although Walter had entrepreneurial experience, he was new to composting. He hired Craig Coker of Coker Composting and Consulting as a technical advisor, and Coker helped Walter figure out what kind of facility he wanted to open, and how much space it would need. They settled on “turned windrow composting,” which involves piling organic waste in long rows, which are turned to improve porosity and oxygen content as well as control moisture and temperature. The method is well-suited to large volumes of compost.
Coker also helped Walter navigate the permitting process at Virginia’s Department of Environmental Quality. Walter met department officials to share the company’s intentions, operational plans, and approach. “Our regulators wanted to see composting facilities succeed,” says Walter. “Establishing a good working relationship is critical.”
Black Bear Composting would serve Charlottesville and the central Shenandoah Valley, which included four small cities with a combined population of about 150,000. The area also had a large potential market for the finished compost in agriculture and land development businesses.
Walter and Coker went looking for land on which to build the facility—30 to 40 acres with good buffers from neighboring properties. Walter met with economic development offices in several counties to introduce his business concept and get advice about appropriate locations. “The officials steered us clear of areas already intended for future development, shared their GIS resources for programmatic search, and even identified local businesses that might benefit from our services,” says Walter.
Many property owners were wary of having a composting facility nearby. So Walter went door-to-door with his plans and photographs of similar facilities to assuage neighbors’ concerns. Still, the first location Walter wanted to buy fell through after a public hearing.
It took a year for him to find the 47 acres in Crimora where he eventually established Black Bear. The land was zoned agricultural, but required a special-use permit because commercial composting is not listed as an approved agricultural activity. The permit mandated a public hearing; despite Walter’s outreach, many people raised objections to the facility. Walter feared the panel of elected supervisors would not allow him to buy the land.
Then a director from the regional Department of Environmental Quality stepped forward to speak at the hearing. He addressed the concerns that had been raised and explained that his office would closely regulate the operations of the facility. If anything went wrong, his office would deal with it, the regulator said. “Had it not been for our regulator foreseeing the need to speak at this meeting, Black Bear Composting would never have had the opportunity to start,” says Walter.
Black Bear Composting had to start small; the facility was only big enough to process 2,800 tons per year. (That’s a lot of weight, but it’s not that much for a commercial operation—a “medium-sized” facility often processes 10,000 tons per year.) The tractor did double-duty as a loader and pulled a windrow turner. Walter kept equipment to a minimum and bought secondhand when he could.
Instead of buying a watertight truck specially designed for composting, he decided to use 65-gallon wheeled carts that could be driven around in a stake body truck.
Now Walter just needed to find clients who wanted their organic waste hauled away. Because there weren’t any other local commercial composters, he had to start from scratch.
In October 2011, Black Bear Composting officially opened, but it had no clients, no organic waste to work with, and no finished compost to sell. Luckily, Walter got an out-of-the-blue call from the University of Virginia, which became his first big client. The university’s sustainability efforts have been lauded in the past few years as exemplary among American universities, and far more ambitious than the city’s own sustainability efforts. In 2011, the Board of Visitors made a commitment to several environmental goals, including responsible waste management—it seems that the UVA Office of Sustainability was waiting for a business like Walter’s to open.
The breaking point
Four years later, Black Bear Composting’s clients included two state universities, a college, three public school systems, several private schools, three hospitals, several restaurants and corporate offices, a couple grocery stores, a few local festivals, and a national park. The company also had a residential compost collection program whose popularity was growing by word of mouth. Black Bear Composting had a great reputation, and the company’s finished compost—rich soil that is excellent for growing plants—always sold out. Small farmers, home gardeners, and natural turf and lawn professionals were big fans.
The facility had composted more than 7,900 tons of material since its inception. About 50,000 students at the schools that Black Bear Composting served had learned about the ecological benefits of composting through the company’s outreach.
“Sounds great, right?” says Walter.
In reality, revenues often didn’t cover the company’s capital and operating expenses. His business, Walter realized, was really two businesses: a composting facility and a hauler. The facility side wasn’t profitable. There wasn’t enough organic waste; they weren’t even at the 2,800 tons-per-year capacity that the land could handle.
What had gone wrong? Charlottesville produces an estimated 90,000 tons of food waste per year, according to a 2010 waste characterization report created with a GIS tool at Virginia Tech. (That’s enough organic material to fill Black Bear’s facility more than 32 times.) Instead of going to Walter’s facility, some of that food waste went to feedlots. Grain from local micro-breweries went to cattle feedlots. National supermarket chains had contracts with large-scale haulers that brought organics to feedlots.
More importantly, disposing of waste in landfills is cheap and easy in Virginia. Local landfills are accessible and charge between $45 and $65 per ton. Black Bear Composting couldn’t undercut landfill pricing. “Virginia is the second largest garbage importing state,” says Walter. “Landfills are big business here.”
Most significant of all, there was little political will to make commercial composting economically viable in Virginia. Though localities have targets for recycling, there are no consequences for failing to meet those targets. Unlike many neighboring states, Virginia doesn’t even ban disposing of yard trimmings in landfills.
In December 2016, Black Bear Composting’s facility stopped accepting new organic material. Walter planned to stay open to sell finished compost until Memorial Day or until it sold out, whichever came first.
Rebirth
Walter told his clients that he would keep the hauling side of the business open for as long as he could. But he’d have to bring their organic materials farther away, which would be more expensive, and they’d have to pay other facilities—which had higher fees—to take the materials.
“We were in limbo for a year,” says Walter. He kept hauling for his core clients and brought their materials to transfer points that eventually sent organic waste to facilities in Lynchburg and Waverly. “That experience taught us our true costs. And it also taught us that some of our clients were willing to pay those higher prices because they believed in composting.”
It was through Walter’s core clients that he was able to reopen. He had to raise his prices, but his clients stuck by him. “It’s a one-day-at-a-time process,” says Walter. “I’m doing everything I can to keep costs down, be more efficient. Automate and optimize where I can.” But in many ways, the composting business requires the human touch. Composting is very susceptible to contamination and machines can’t sort through organic material.
These days, Walter likes his daily work. “I’m never in an office. I don’t even have one,” he says. “I’m on the road or at our facility or testing products or taking samples to labs or helping manage the windrows.” Walter often drives a truck and goes on a collection route. He likes talking to clients.
And what do Walter’s clients think? Mike Keenan, who founded The Juice Laundry, met Walter at the C’ville Eco Fair in 2013, before Keenan opened his first retail location. Because Keenan knew that composting services were available, he planned ahead to make certain that his business would be as sustainable as possible. “In addition to bottling all of our juices in reusable glass bottles, we use only plant-based, compostable cups and bowls for 100 percent of our smoothies, soups, and acai bowls,” says Keenan. “Absolutely critical for businesses that purchase and use compostable materials is having an industrial compost facility like Black Bear that can actually compost all of these items.”
Keenan partly attributes The Juice Laundry’s ability to be zero-waste to Black Bear Composting.
The City Market has a composting booth that Laurie Miller staffs for Black Bear Composting. “People who visit the compost booth are excited that the city offers this service,” says Miller.
Black Bear Composting’s residential clients number around 300 in Charlottesville, Staunton, Albemarle, and Augusta. The company has four employees, including Walter. It has three trucks, though Walter is looking to buy a new one, an industrial-sized truck with a watertight tank uniquely designed for organic material.
“Because organic waste is water-based, a lot of it disappears as you process it,” Walter says. At the facility, every ton of food waste needs to be mixed with two tons of wood chips or leaves. “Half of it is water, so it goes up into the air as steam. By the end, you only have 40 percent of it left as finished compost.” In the beginning, Walter thought that it might make sense to take the organic material for free and just charge for the finished product. “But the more realistic business model is to make sure that you can cover your expenses by charging for removal and processing,” he says. “Sale of the finished compost is profit, hopefully.”
Walter is upbeat—a surprise, considering the challenges of the past few years. “I feel strangely liberated by the near-death experience of the business,” he says. “I spent years being afraid of what would happen to our employees if we went under. It’s not a high profit margin business and it’s never is going to be.” But he was able to carry on even when the worst happened. “There are no guarantees. We do a good job. Our clients are fantastic. That’s pretty much all I can ask for.”