VOX terra, o.z., registered social enterprise
Ing. Miroslav Žabka, PhD.
Circular economy – agriculture, mushroom production
Slovakia
Ground to grown, Mushrooms as an answer to coffees and restaurants waste
CIRCULAR BUSINESS MODEL
Circular supply chain
Recovery and recycling
We are a small social enterprise dealing with alternative protein, food, and feed sources that are not commonly used for production. We have been doing research on operating an insect farm, RAS ( Recirculating aquaculture system) for trout farming, and a mushroom growing platform. We are trying to bring new innovative solutions to the sector and combine information technology with agriculture to optimize and automate the majority of processes in the field.
During our research, we came across multiple problems connected to the circularity of the local economy and waste generation, and we were able to identify that the usage of coffee and, in the end, also municipal offices’ coffee waste can be used as a growing medium for mushroom cultivation, which was the core of our project.
Since we have a good connection with local businesses and municipalities, we suggested that a study and a pilot operation should be set up to test the hypothesis of collecting coffee grounds for mushroom production, and since it was met with positive feedback on more than a few occasions, we decided to try and apply for this kind of project.
The overall mission was to reduce waste and produce local fresh mushrooms, which could be used in local restaurants while offering some variety in mushroom types. Mostly button mushrooms are available in restaurants, so we tried providing oyster mushrooms and lion’s mane.
What motivated you to make your business more circular?
There are 3 main things that motivated us:
1. Environmental awareness
During our research, we came across multiple good practices from abroad which has already taken the initiative on using other businesses’ waste as their input material, and we already had this experience with an insect farm, so we tried to apply the same principles in mushroom farming.
2. Input materials costs
Mushrooms are generally farmed on wood chips or wood waste from other sources. This has become increasingly expensive due to many factors:
- Wood prices have risen during COVID and have not fallen since.
- Hardwood chips or sawdust have to be used for the majority of mushrooms other than oyster.
- Wood processing businesses already sell their waste to companies making wooden pellets and bricks, which are used as fuel,
- Carpenters generally work with materials other than wood, which contain glues and other chemical compounds that can not be used, and even if they use wood as well, they do not separate their shavings based on the material they are working with, making the entire waste chips unsuitable.
3. Existing supply and potential demand
We were in contact with a few local coffees and over 15 municipalities which has already stated that they do have organic waste in the form of used coffee grounds, and that they are willing to participate in collecting it for reuse if it is not too much trouble for them.
During the project, we also communicated with local restaurants, which were willing to participate in the future as a potential demand side of the operation, which led to selecting Lion’s mane mushroom and pink Oyster mushroom as more visible, appealing alternatives to other mushrooms.
Implementation process
What were the main objectives of your feasibility study?
Main objectives were:
- To identify if the coffee ground business model is viable from both a financial and technical standpoint.
- To test the possibility of growing Lion’s mane and Oyster mushrooms on this substrate.
- To analyse, test, and compare productivity based on substrate mix and mushroom type.
- To analyse the market, competition, and leading mushroom producers in Slovakia.
- To conduct financial analysis and predictions for running this kind of operation.
- To identify opportunities, threats, bottlenecks, or technical difficulties for this kind of operation.
- To evaluate the impact of the approach from an environmental standpoint.
The following indicators have been set:
SDG 12 Responsible Consumption and Production: Decrease in waste generation through prevention, reduction, recycling, and reuse.
The operation has the potential to decrease waste generation through prevention, reduction, recycling, and reuse, at a rate of 2,5t/year in the case of coffee grounds as waste. (Scalable to 10t in the future).
SDG 8 Decent Work and Economic Growth: Improvements in resource efficiency and in decoupling economic growth from environmental degradation.
Since the organization is a social enterprise, the actual operation is estimated to generate 0,5 FTE employment opportunity (scalable to 2 FTE).
SDG 13 Climate Action: Reduction of GHG emissions, e.g., striving fora 55% reduction of GHG emissions by 2030 in line with the EU’s “Fit for 55” and Green Deal targets :
Adoption of using mushrooms in the diet and in restaurants within the region may have a positive impact on GHG emissions compared to meat consumption. In the best-case scenario, if we supplement 900 kilograms of meat with mushrooms, it has the potential to offset 21,270 kg CO2equivalents compared to meat (calculations were made for substitution for 300/300/300 pork/beef/chicken meat), which is a significant reduction.
Meat‐Substitution Emission Savings
Substituting 900 kg of meat with mushrooms offsets 21,270 kg CO₂-e, i.e., roughly 23.6 kg CO₂-e avoided per kg of mushrooms produced.
Coffee-Grounds Diversion Emission Savings
Rather than landfilling or industrial composting, repurposing coffee grounds for substrate avoids their decomposition emissions. A conservative emission factor for spent coffee grounds decomposition is 0.10 kg CO₂-e per kg of grounds (Faostat/Higg Index).
SDG 7 Affordable and Clean Energy: Improvements in energy efficiency can be measured with a ratio of energy consumption per economic output.
Since the operation only substitutes input material, direct impact on energy savings is not present. However, if a newly established operation in a controlled environment container is to be set up. Renewable energy sources should be considered for energy requirements of the operation, preferably in combination of solar and wind power.
Suggested solution:
- Rooftop Solar Photovoltaics (PV 5-10 kW)
- Small Wind Turbine (1-2 kW)
- Battery Energy Storage System (BESS – 20-30 kWh)
- Energy-Efficient Equipment (LED lights, Heat pump, variable speed fans)
Current vs Future targets:
0,5 FTE vs 2FTE
2,5t waste reduction vs 10t waste reduction
12 500 annual revenues vs 30 000 annual revenues
61t CO2 reduction vs 122t CO2 reduction
Power grid reliant vs Renewable energy optimized
50kg/week production vs 100kg/week production
Not BIO certified vs BIO production certified
What activities did you carry out during your project?
- Research on mushroom cultivation techniques and coffee grounds as a substrate
- Identify stakeholders and establish communication channels
- Set up the project team and delegate responsibilities
- Conduct market research, competitors, and market positioning
- Evaluate the technical feasibility of using coffee grounds as a substrate
- Establisha partnership with suppliers
- Develop preliminary production plan and cost estimates
- Develop a technical specification for the operation
- Assess the scope of the operation and production mix, and capacity
- Conduct a financial analysis
- Assess risk and mitigation strategies
- Determine financial viability and ROI
- Establish brake-even points for the desired amounts
- Conduct an environmental impact assessment
- Ensure compliance with relevant regulations
- Develop waste management strategies
- Analyse uses for spent substrate
We did involve partners in the form of municipalities, which became the most stable source of used coffee grounds.
What feedback did you receive from stakeholders (customers, suppliers etc.)?
To summarize, the initiative was received mainly positively. However, the private sector was more concerned about the impact it might have on their operation, considering the additional steps necessary to ensure usability of the substrate, which included either drying it out or storing it in a fridge/freezer.
Municipal offices were easier to cooperate with and also provided a steadier income from the resource, since their operation doesn’t fluctuate so much based on season (summer, winter), or other external factors (holidays, etc.) We adapted accordingly.
On the demand side of the analysis, it was important to provide visually attractive produce, which in the end came down to a short supply chain and being able to process and deliver the produce asap, before it deteriorates. Visual appeal also means focusing on different strains of oyster mushroom (pink/blue oyster) and lion’s mane, since these are harder to find and more attractive for customers in the end.
We also adapted the grow mix based on the yield and ease of preparation for cultivation, based on wood supplements we were able to obtain from a local woodworker’s shop.
Impact & Outcomes
What were the main results and outcomes of the project for your company?
The study aimed to assess the feasibility of using used coffee grounds as a substrate for growing mushrooms. There were quite a few outcomes or issues that were tackled and potentially solved:
- Coffee grounds spoil easily and fast; for further use, they need to be stored appropriately or dried.
- Pure coffee grounds are not an excellent substrate material, and for better usability and easier usage, they should be combined with wood pellets/sawdust or chips to reduce spoilage and achieve stable yields.
- Used coffee grounds from coffee and restaurants are prone to seasonal and other changes, which means uneven supply. This is significantly reduced when combining with municipal offices which have much steady supply.
- Visals are most important for customers as well as for freshness.
- Competition in the field is strongly present on national level by few large players but is absent on a local level.
- Growing conditions and time management are crucial for steady yields.
- Different mushrooms grow vastly differently on coffee grounds, and mushroom selection needs to be adjusted accordingly.
- Scaling and automation are possible and necessary for financial growth since an increased profit margin can be achieved by scaling up the operation.
Did you detect a positive impact of circular transition for your company and for the environment?
The main takeaway is the reduction in wood pellets and bricks usage in the company, which can be cut in half or even to 25%. The significant impact however is the usage of what otherwise would become waste as a resource for further cultivation of mushrooms.
Have you already implemented any changes?
We have implemented the coffee grounds/wood chips mix into the growing process, as well as the collection of the ground coffee from local municipal offices, but further investments are necessary to scale and optimize the process. We are working on acquiring the required resources to do so.
Lessons learned
What key lessons did you learn regarding circular innovation?
Networking, it is important to develop and maintain connections with your suppliers and customers in the region. Probably the most important issue is to have a good network behind you so you can carry out your business successfully.
What surprised us was the positive approach of local municipalities and some of the suppliers and potential customers.
On the other hand, the fact that coffee grounds will spoil in hours if not treated/stored properly also surprised us a bit.
Did you encounter any challenges?
Training people on both sides to do the necessary work was a challenge. Technical challenges also arose and are, to a degree, connected with financial ones. The more controlled and precise operation you want to carry out when growing mushrooms, the larger the investment will be, since it is important to keep things clean, sterile, and in the best-case scenario, in a controlled environment.
If you could do your project again, what would you do differently?
We would begin training people sooner, and prepare for the material spoilage better. We would also most likely set up a larger space for testing the substrate.
Future plans & recommendations
What are your next steps towards circular transition?
We are currently searching for options to create a controlled environment grow room and laboratory and a supply chain for hardwood sawdust/shavings to improve the entire operation. We intend to purchase 2 modified shipping containers for this purpose.
Is there any advice you would give to other SMEs looking to adopt a circular business model?
Analyse your operation step by step and brainstorm with more people about the changes you can make which are oriented on circular models.
Be ready to build on your failures, thats what pushes you towards solutions. (In our case, the coffee grounds collection supply chain).
How can policymakers or financial institutions better support businesses in adopting circular practices?
In Slovakia, many bureaucratic regulations are slowing down the process of adopting certain circular practices, especially when you intend to use materials that are considered waste by law. These processes are slow and difficult for small enterprises.
Do you have any additional comments or reflections about your participation in the Up2Circ project?
It was a nice experience and we would definitely do it again. However, we would most likely go directly for the operation grant instead of the feasibility study.