The idea can be described as a three step process:
1) Collect excess unwanted shells from local seafood markets
2) Crush and dissolve the shells in a mild acid (such as vinegar) to form a water-soluble, calcium-rich concentrate
3) Bottle and sell this concentrate to local plant growers for use as a foliar spray
Local seafood restaurants produce an abundance of excess oyster shells. These shells are incredibly calcium-rich, being ninety-six percent calcium carbonate. Presently, the restaurants pay to have these shells taken away -- either back to the coast where they are used in oyster reefs, or, more likely, to a landfill.
Farmers, on the other hand, can benefit greatly from the calcium contained in the oyster's shells. Plants treated with a water-soluble calcium (or WCA) spray during their flowering cycles are much less likely to develop a common malady: blossom end rot (pictured above).
The impacts on the Austin community will be manifold:
Oyster shells that are currently disposed en masse in landfills will be put to good use, moving us closed to Austin's zero-waste footprint goal.
Local farmers will have access to a competitively-priced foliar spray that keeps plants healthy and improves crop yield.
Low-skill, living wage jobs will be created. Initially only a handful of employees will be affordable, but the need for manual labor will scale with the company.
Local seafood businesses will no longer be burdened with disposal of an abundant waste product. All of these benefits will be yielded by a company that fills an economic need and increases the efficiency of a market.
This business is capable of incorporating two of the products supplied.
First, the oyster shells provided by Quality Seafood Market. These shells are the source of the spray's calcium, which is what the plants need to prevent blossom-end rot.
Next, the wine bottles supplied by Texas Reds and Whites would be an affordable source of packaging. While the bottle shapes vary, most are 750mL in volume, which is a great quantity for this product.
Costs vary depending on whether we're talking about large-scale or small-scale. Because space is limited, I will focus on a minimal-scale operation. Until revenue or greater funding (beyond ReversePitch) I will be the only employee, so employee costs are not calculated here.
Alright, let's get into the numbers.
Material Costs:
- Crushing Machine (one-time cost): This is the biggest 1-time investment cost. A machine like the JWCE Monster crusher would be perfect, while something like a Hammer Mill would still be usable. The JWCE Monster is $26,000. I've found some smaller hammer mills for $5,000~7,000.
- Oyster Shells (ongoing cost): Free from QSM. Only associated cost is the cost of driving to pick them up.
- Brown Rice Vinegar (ongoing cost): BRV can be purchased online for $28/gal. I've reached out to local pickler Pogue Mahone to ask about using their excess pickle brine as the acid in the process, which would bring this cost to $0.
- Packaging (ongoing cost): Free from Texas Reds and Whites. Only associated cost is the cost of driving to pick them up.
- Shipping to local farms (ongoing cost): Cost of the gas to take drive to the farms.
All up, that's ~$34 per gallon of concentrate product (assuming a "no" from Pogue Mahone. The product is used in a 1:1000 dilution ratio, so fully diluted, material costs are ~$0.03 per gallon.
Competition:
Nutri-Cal calcium foliar spray is priced at ~$1.22 per fully-diluted gallon. Being an unknown brand with no track record, we need to undersell that significantly enough to get farmers to try us out. At $0.12 per fully-diluted gallon, we're still making $0.09 per diluted gallon, or $90 per gallon of concentrate (265% of the materials cost). We may not have to go that low to get farmers to switch.
Although the market viability section above focuses on initial bootstrapping, this business model is highly scalable in the long-term, given the generous input-to-output margin. The potential for growth is immense. There are over 2,000,000 farms in the US alone, and oyster shells are in excess worldwide. Farms contributed $136,700,000,000 to US GDP in 2015. While foliar spray will target fast-growing, flowering plants such as tomatoes, corn, peppers, and generally flowering clone monocultures, other products can be added in time to capture more and more of the market.
The high profit margin of the spray and increased sales volume at scale will offset new costs that arise with scaling, such as:
- Employee recruitment, training and salaries
- Commercial shipping costs
- Warehousing storage for the product
- Marketing / advertising costs
Given the abundance of excess oyster shells, the primary material cost will be mild acid at small scale . As the business scales up, and begins to serve farms ever-farther from the production facility, shipping costs may begin to dominate production cost. As this happens, it will be necessary to open production facilities in different locations around the country. Coastal areas with small organic farms will be ideal.
Initial implementation requires only the crushing machine, which costs $26,000. Everything else is low-cost enough to be self funded at small scale. The spray mixture can be made and stored in-home and delivered via a typical pickup truck. Other small costs such as filing articles of incorporation can also be taken on personally.
To buy the crusher, I would seek a small investment from an angel investor or a crowdfunding campaign to complement the ReversePitch winnings.
Once initial traction is gained, I would seek a small round of funding to rent space at a storage facility, and make some hires, including:
- Truck drivers
- Sales and marketing teams
- Shell processing and product packaging teams
- QC team
The stated materials and employees will be sufficient to serve all of the farms in the greater Austin metropolitan area. From there we can begin expanding to other parts of the country, with Seattle as a prospective initial target.
The product will be attractive to investors for the same reasons the business is viable; there is an established demand for a high-margin product that we can create with very little material cost. Except for the very first funding, needed to buy the crusher, there will be some level of traction proving the concept, and the investment will be used to scale that already-working model.
At the moment, I am a team of one.
I cofounded an ad-tech startup out of college, and learned many lessons about entrepreneurship through that experience. Most of all, I learned how to take ownership and wholly dedicate myself to the mission. While software and agriculture are vastly different, many of the lessons of entrepreneurship are universal.
That said, developing relationships with people who understand the agriculture industry and building a passionate team with expertise in shipping and agriculture will be of paramount importance. I plan to work with the Texas Farm Bureau and the Texas Agriculture Commission to find others who have expertise in these fields, and interest in our mission. These people will form the core of the business leadership.
I've already learned some valuable lessons by speaking with the founders of other local sustainable agriculture companies, and will continue to pursue advice and mentorship from local leaders. I will also reach out to agriculture chemists to learn everything possible about how to improve the product.
WineBlossom will create dozens of living wage, low-skill jobs. Initially (until revenue starts to come in) I will be a solo operation. Once I start to close sales or raise investment, I'll want to hire employees to:
- Pick up the shells from the various seafood restaurants.
- Process the shells and package the product at a production facility
- Drive shipping trucks to take the product to local growers
The truck-driving jobs would require a commercial driving license, for which the company could supply training. These certifications would be a valuable asset to employees in future job pursuits, should they decide to leave WineBlossom.
The other production jobs require little training and fall into the category of low-skill or unskilled labor.
Dozens of mid-skill jobs will also be created:
- Salespeople to contact the supplement producers (initial hires)
- Business-internals (HR, accounting, etc. -- hired as company begins to scale)
Local seafood restaurants will benefit by having their waste shells removed for free, and local farms will have access to an inexpensive foliar spray.
The environmental and zero-waste implications of WineBlossom's mission are enormous. Tons of material is wasted every month, growing our landfills. Our business model captures the vast majority of this waste and repurposes it as an affordable product to keep local produce healthy.
The amount of shell used (and kept out of landfills) will depend on our ability to scale, as will the number of bottles collected from Texas Reds and Whites.
