Techopia, Insider Only Top Stories

Food Cycle Science raises millions in fresh financing to fast-track ‘table-to-farm’ tech

June 13, 2024
4:16 PM
ET

Founded in 2011, Food Cycle Science sells a portable device about the size of a couple of large crock pots that grinds up food waste such as fruit and vegetable peelings, meat, bones, pits and shells and converts it into a dry, odourless fertilizer containing nitrogen, phosphate and potassium.

Already an Insider? Log in

Get Instant Access to This Article

Become an Ottawa Business Journal Insider and get immediate access to all of our Insider-only content and much more.

Learn More and Become an Insider

An Ottawa firm that specializes in “table-to-farm” appliances that turn food scraps into fertilizer has landed a multimillion-dollar investment to fund its ongoing R&D efforts and expansion into new markets. Founded in 2011, Food Cycle Science sells a portable device about the size of a couple of large crock pots that grinds up food waste such as fruit and vegetable peelings, meat, bones, pits and shells and converts it into a dry, odourless fertilizer containing nitrogen, phosphate and potassium. The company announced this week that Toronto-based private-equity firm Power Sustainable Lios, which specializes in backing agrifood enterprises, has given it millions of dollars in financing. While Power Sustainable Lios wouldn’t divulge how much it’s investing in Food Cycle Science, managing director Jonathan Belair told Techopia the organization – which he described as a $300-million fund backed by “large North American institutions” – writes cheques ranging from $25 million to $50 million. Belair said the company has been researching the food waste recycling industry for about three years looking for the right opportunity to get in on the fast-growing sector. It ultimately singled out Food Cycle Science as “the leader in the space from a business model perspective and go-to-market perspective,” he added. “The fact that they have been successful at demonstrating a track record of growth, of sound operations, profitability and access to multiple channels internationally gave us a tremendous amount of confidence,” Belair said, explaining he believes that Food Cycle Science has “the right building blocks to successfully execute” its strategy. Now at 50 employees, Food Cycle Science has made steady inroads in key markets such as municipalities that are trying to figure out how to shrink the amount of food waste that gets dumped into landfills. About 130 Canadian cities and towns now rely on its signature FoodCycler appliance to compost food waste – up from 90 a year ago, when municipal contracts comprised a quarter of the company’s sales. While many of those clients are relatively small communities such as Smiths Falls and Nelson, B.C., chief executive Bradley Crepeau says he sees huge potential for growth in bigger metropolitan areas like Ottawa that have struggled to achieve widespread usage of green-bin programs, particularly among residents of highrise apartment buildings and condos who typically have to haul their scraps to central bins. “We see a real opportunity there to continue shaping this program to be part of a city’s infrastructure,” Crepeau said, adding his firm has had “encouraging conversions” with City of Ottawa officials about integrating its technology into the capital’s waste-collection and recycling process. The company is also starting to break through in foreign markets. Most of its revenues still come from direct-to-consumer sales, and Crepeau said the FoodCycler, which is sold by Vita-Mix Corp. in North America, is making headway in countries with high population densities where landfill space is at a premium, such as Japan, South Korea and Taiwan. “I think there are other markets that share similar qualities to those where we believe we can be successful as well,” he said. The FoodCycler can hold up to five litres of food scraps, using heat, air and agitation to reduce the weight and volume of the contents by up to 90 per cent in a matter of hours – as opposed to the weeks or months it takes a traditional backyard composter to do the same job. While Food Cycle Science had a first-mover advantage when the product first hit the market in 2017, the food recycling space is more crowded nowadays. New competitors have cropped up in recent years, including the Lomi kitchen composter and California-based Mill Industries’ Kitchen Bin. Crepeau believes Food Cycle Science – which placed 19th on OBJ’s 2024 list of Ottawa’s top-20 fastest-growing companies with three-year revenue growth of more than 120 per cent – still has the inside track, but he also knows the firm can’t afford to get complacent. With that in mind, Crepeau says much of the new investment from Power Sustainable Lios will be devoted to R&D as well as expanding the firm’s sales and marketing teams. He hopes to build on current programs such as Food Cycle Science’s campaign to develop a system that will rapidly break down plastics made from natural substances such as vegetable oils and convert them into a nutrient-rich byproduct that can be mixed with garden soil. Backed by more than $1.65 million in funding from the Canadian Food Innovation Network, the Westboro-based firm is working on the technology with biochemistry researchers at Carleton University. “This hasn’t been done before, so there’s a lot of innovation that we still need to do,” Crepeau explained. “This can’t be a complicated process. I want ours to be the most convenient and user-friendly option available. If we can achieve that, I think we have a real good chance of tapping into some sort of mass adoption of this type of product.” Noting that up to 40 per cent of all food produced in Canada is wasted, Belair calls the FoodCycler a “game-changer” in an industry he says has traditionally suffered from a lack of innovation. He welcomes the emergence of new competitors to the Ottawa company, arguing it’s a sign that a sector that’s still “very new” is starting to come of age. “As we look at this opportunity from an industry perspective, it will benefit everybody to have multiple players that are innovating, investing and executing on strategy,” Belair said. “What’s so appealing about this business is the amount of white space that exists. Brad and his team have developed a wonderful business with a fantastic mission and great followership, and we’re here to simply add fuel to that and accelerate growth.”