Think the green movement was just a fad? From tire recycling to biodegradable packing peanuts, these entrepreneurs have turned sustainability into sustainable businesses.
FLIPSWAP FOUNDERS Sohrob Farudi, Cyrus Farudi, Rahmeen Farudi, Andrew Berman and Edo Cohen (from left to right) collect used cell phones and resell them.
FLIPSWAP TECHNICIAN servicing a cell phone.
While the recession might make some businesses wonder if they can afford to implement green and sustainable initiatives, others are making an entire business out of them. Several Inc 500|5000 companies owe their growth to keeping stuff -- theirs or yours -- out of landfills, while some find or use renewable energy sources to power business and offer sustainability. It's a sign of sustainability's increasing migration to the mainstream that these companies are but a tiny sample of those on this year's list that could be considered "green."
"Companies that aren't doing anything or are cutting back due to the downturn are going to be that much more behind," says Ted Ning, director of LOHAS (Lifestyles of Health and Sustainability), a social community for the segment of the population focused on health and fitness, the environment, personal development, sustainable living, and social justice. "What we are facing is limited resources. If people are using virgin materials constantly, and not implementing anything in terms of reusing or repurposing, the cost of those virgin materials is going to increase due to scarcity. Consequently, the end product will be more expensive." Ning calls this "ecoflation," -- a scenario that forecasts a drop in earnings before interest and taxes (EBIT) of 19 percent to 47 percent by 2018 for fast-moving consumer-goods companies that do not develop strategies to offset the risks posed by environmental concerns, according to the World Resources Institute.
But a number of companies on this year's Inc. 500|5000 list aren't waiting for the scenario to play out. Indeed, they are at the heart of the green business movement. Here's a look at some of most innovative:
Liberty Tire Recycling, Pittsburgh, Pennsylvania, No. 1508
Liberty Tire Recycling has kept 100 million rubber tires from landfills -- or the equivalent of 25 percent of the country's annual scrapped tires, according to the Rubber Manufacturers Association. Crumb rubber is turned into artificial turf, playground surfacing, doormats, and mulch. Another big market is tire-derived fuel, which is clean-burning, with a higher BTU than coal, and is used to run power and other industrial plants. The company's major customer, Marshall, Texas-based TieTek, which produces composite railroad ties, is slated to switch all of Chicago's railroad crossties, the planks of wood on either side of the rails, from wooden to Liberty's recycled rubber.
Eco-Products, Boulder, Colorado, No. 270
You won't find Eco-Products' cups, cutlery, and food containers in landfill -- or if you do, they won't be there for long. The products are certified compostable, which means that 90 percent of the material will disintegrate within 120 days and will leave no toxic residue, as defined by the Biodegradable Products Institute. The company sells to Google, Busch Gardens, and Disney and just launched its first retail line, Green Stripe, in 126 Kruger's stores, according to CEO Steve Savage. Solar panels at Eco-Products' headquarters provide 80 percent of the building's power needs.
Flipswap, Torrance, California, No. 81
Flipswap, founded in 2004 by brothers Sohrob, Cyrus and Rahmeen Farudi along with Edo Cohen and Andrew Berman, has collected over 1 million cell phones. The cell phones mostly come through retailers that collect old phones when a customer gets an upgrade, and through an online free-shipping rebate program for consumers. Still, that's a far cry from the 150 million phones that turn over every year in the United States alone, and the 900 million sitting in drawers or improperly disposed of. If Flipwap could get at those, Sohrob says, it could attract larger customers that want big numbers of the same phone model. For now, it resells 98 percent of the phones it collects, mostly to retailers in China, South America, and South Africa -- places where a used but still fancy iPhone is a status symbol, even if it doesn't have a working data plan. For every phone Flipswap can't resell, it plants a tree through American Forest's Global ReLeaf program.
TexasCarpetRecycling.com, Grapevine, Texas, No. 2240
In 2007, after Corporate Floors had been pouring floors and installing carpet for businesses for 13 years, a client asked that its old carpet not end up in landfill. CEO Thomas Holland says he wanted to accommodate, but couldn't find anywhere to send commercial carpet. So he created TexasCarpetRecycling.com, diverting 1,500 tons of carpet from landfills in 2008. The company is on track to double that this year. The service will take any carpet, in any condition and with any type of backing. About half can be reused as carpets, and some are ground into pellets to power cement kilns.
The FruitGuys, San Francisco, No. 2001
Sustainability is in the The FruitGuys' DNA. The business started in 1998, says CEO Chris Mittelstadt, when he called up his friends working in offices in San Francisco and said, "What do you guys need?" They complained of sitting on their butts all day and eating chocolate and soda from the vending machines. When Chris and his team started showing up with fresh seasonal produce from local growers, eventually they started hearing, "The fruit guys are here!" In 2004, after the dot-com crash, a lot of his former customers had dispersed across the country, and wanted to keep getting fruit deliveries. The FruitGuys have now set up hubs in Chicago and Philadelphia to serve more customers without having to ship products more than a couple hundred miles.
Source Technologies, Albuquerque, No. 247
Daniel Sandoval had 12 years' experience working on waste fuel technologies for other companies, but now, as the CEO of Source Technologies, he can also be considered, at least in part, as a matchmaker. Source Technologies has developed patented technology to convert toxic gas into a source of renewable energy. The company is able to match big power users to the waste products that can fuel them. For its biggest customer, Frito-Lay, Source Technologies purchased the gas rights to a landfill not far from its client's Rosenberg, Texas, plant, built a landfill gas-to-energy facility, and constructed a six-mile pipeline connecting it to Frito-Lay's operations, which are now powered solely by this waste fuel source. Dave Haft, vice president of sustainability for Frito-Lay, says his company's renewable energy policies have resulted in reductions in natural gas use by 30 percent, electricity by 25 percent, and water by 50 percent, all by pound of produced product, in the last 10 years. Without those reductions, Frito-Lay would be spending $50 million more this year on those resources.
StarchTech, Minneapolis, No. 2577
"We basically took a Cheeto and reformulated it,' says Ed Boehmer, CEO of StarchTech, a company that produces biodegradable packing peanuts made from renewable resources. StarchTech packing peanuts are made from the byproducts of corn starch and are cheaper and easier to make and transport than polystyrene peanuts. The best part? Once a package arrives safely, the peanuts can be dissolved in water. A condensed version of the peanuts can be shipped in mass to retailers and puffed on-site to shipping size, using a desktop-sized extruding machine.
Alltech, Lexington, Kentucky, No. 3598
Dr. Pearse Lyons, who founded Alltech in 1980, thinks highly of animal health, especially that of livestock: Livestock health correlates very closely to the rest of the ecosystem's health, since they are our food, they compete for our food, and they contribute nutrient runoff, solid waste, and methane to the environment. Alltech manufactures natural ingredients for use in animal, alcohol, and food production, mainly animal feed supplements. The company recently teamed up with Goshen, Cali.-based feed maker O.H. Kruse to develop and launch Green Feed, the company's first whole feed rather than a feed supplement. The horse feed uses locally available ingredients, has minimal grain content in order to use less of the global food supply, contains the optimal amount of supplements to decrease the nutrient content wasted into manure and reduce the risk of groundwater contamination, and is sold in bags made of recyclable materials and printed with soy-based ink. Lyons' goal is for Alltech to be Kentucky's third 'super-brand' -- after Kentucky Fried Chicken and Muhammad Ali.
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