Entrepreneurs

Back to the Roots



Changing the World One Mushroom at a Time

     Inside this unmarked, nondescript West Oakland warehouse, the roasty-toasty aroma of coffee percolates throughout every corner. Thanks to the gumption, determination and ingenuity of two youthful University of California at Berkeley graduates, this is the place where mountains of discarded coffee grounds from morning lattes and evening espressos are resurrected into a new life with a socially conscious mission.
     After graduating two years ago from the Hass School of Business, Nikhil Arora, 24, and Alejandro Velez, 23, turned their backs on lucrative job offers in investment banking and business consulting to get down and dirty instead. They embarked on creating an innovative agricultural-food enterprise, Back to the Roots, which produces DIY home kits to grow gourmet oyster mushrooms from spent Peet’s coffee grounds.
    With the invention of these simple $19.95 kits now sold on the Back to the Roots website (www.backtotheroots.com) and at Whole Foods nationwide, the two have created local jobs, and given greater credence to the burgeoning grow-your-own-food movement sweeping the nation. Moreover, they’ve turned 20,000 pounds of coffee waste a week that would have gone to landfills into something not only useful,
but valuable.
    Their achievements already have prompted Business Week to name Arora and Velez among the most promising social entrepreneurs in the United States, as well as among the country’s top 25 young entrepreneurs.
    “Do we want to change the world one mushroom at a time?’’ ponders Arora with a proud smile. “Yes, we do.’’
     Arora, born in Southern California of Indian heritage, and Velez, a native of Columbia, might seem a most unlikely duo to do that. Neither comes from a professional food or farming background. And neither imagined that mushrooms, of all things, would play such a pivotal role in their lives.
    The jeans-and-sneakers-clad entrepreneurs didn’t even really know one another in college, despite sharing classes together for four years. But in their last semester, during a business ethics class, they both found themselves captivated when a visiting lecturer spoke about how women in Columbia and East Africa were growing mushrooms in coffee grounds to fend off malnutrition. Intrigued, each approached their professor separately afterward, only to have him suggest they work together on the idea.
    In the kitchen closet of Velez’s fraternity house, they started experimenting by filling 10 plastic buckets with mail-order mushroom spawns and scrounged coffee grounds, rich in nutrients and sterilized from hot water brewing. Nine ended up completely contaminated, but when they peered into the remaining bucket, they found lovely oyster mushrooms had sprouted.
    Without blinking, they lugged this dirty looking bucket to someone who they hoped could determine if their mushrooms were any good. That would be Cal Peternell, co-chef of Chez Panisse Cafe, who sautéed the mushrooms on the spot and pronounced them fabulous. It didn’t hurt that the Chez Panisse founder, Alice Waters, a pioneering champion of local, sustainable and organic ingredients, also happened to be at the restaurant that day to give the guys a pat on the back.
    With that encouragement, Arora and Velez visited their neighborhood Whole Foods in Berkeley, where Randy Ducummon, regional produce and floral coordinator for its Northern California and Reno stores, spotted them poking around the mushroom bins. When they explained that they were growing oyster mushrooms, he told them to come
back when they got their first big crop because he might be able to do some business with them. They did just that, returning with an amount of mushrooms so modest that Ducummon had to weigh them on a meat scale for accuracy.
    Despite the fact that Ducummon gets bombarded regularly with pitches for new products and accepts only one out of 20, he saw promise in these two guys, whom he’s grown so fond of that his co-workers jokingly refer to them as Ducummon’s sons.
    “These guys were just so passionate and energetic,’’ Ducummon says. “We’ve helped them along the way. But really, these guys did it, themselves. They are good, hard-working kids who do what it takes.’’
    After maxing out their credit cards to get the business off the ground, Arora and Velez secured a $25,000 micro loan from Whole Foods, as well as a $5,000 social innovation grant from their alma mater.
    Arora and Velez worked with Peet’s to get employees to set aside the coffee grounds separately, instead of throwing them in with the regular garbage. Although, Arora and Velez used to drive around in their stripped out, repurposed Super Shuttle van to 14 East Bay Peet’s cafes each week to pick up the grounds for free, Peet’s now pays them to do so.
    “I think of all the choices young grads from Berkeley could make, yet they chose to go into something that’s good for the environment and the community,’’ says Shirin Moayyad, Peet’s director of coffee purchasing. “I am hugely proud of them.’’
    Nowadays, Whole Foods sells upward of 300 of the Back to the Roots kits a month in its 35 Northern California and Reno stores alone, Ducummon says. Not bad for a product once considered too hippy-dippy for mainstream shoppers. But Arora and Velez have made the kits fun and easy to use. Open the flap on the box, cut open the plastic bag and mist the coffee grounds twice daily with water. In about 10 days, you’ll have a pound of oyster mushrooms to enjoy. Flip the box over. Repeat process. And you’ll get another crop. Don’t throw out the grounds afterward. Instead, mix it with your backyard soil to get your garden to flourish. The soil amendment has proved so popular that Back to the Roots now sells it in Whole Foods floral departments for $10 for an 8-pound bag.
    Arora and Velez have certainly come a long way. This spring, they moved the company from a warehouse in Emeryville to the current one in Oakland that’s 10 times larger. They have 14 employees, many of whom were hired specifically because they are parents who had been unemployed for at least six months. The company has reached the break-even point, allowing Arora and Velez a salary for the first time — $300 each a week.
    Although, they used to sell fresh mushrooms to Whole Foods, they have phased out that component to concentrate solely on the kits. By the end of this year, they expect to collect and reuse 1 million pounds of coffee grounds. They’re also now toying with new mushroom growing kits, using soy waste from next-door Hodo Soy Beanery, as well as from recycled leaves from nearby Numi Tea and spent hops from Linden Street Brewery
Despite 15-hour days in a still grueling economy, Arora and Velez couldn’t be more stoked about what they’ve accomplished.
    “What’s the most gratifying?’’ Arora contemplates. “That from one bucket of what was waste, we created all these jobs. That is just the coolest thing.’’
 

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