It's said that one person's trash is another's treasure, but for a Tempe startup called EcoScraps, that trash is its very business model.

The fledgling business is based on the grocery industry's massive piles of fruits and vegetables that go bad before they can be sold and until now have been hauled to a landfill.

EcoScraps has inked deals with grocers and wholesalers to haul it away and use it as a key ingredient in organic compost and potting soil that it sells at independent nurseries. The company plans to add 88 Bashas' stores and is looking for others in addition to its existing wholesaler supply, said Brandon Sargent, EcoScrap's co-founder and vice president. It hasn't been too difficult to get grocers to sign on, Sargent said, because trash companies charge stores by the weight of what's hauled away.

"In almost every situation, we save them money by picking up their waste," Sargent said. "If they don't understand the eco-friendly aspect, at least they understand the bottom line."

The company opened in Tempe in February after testing the market last fall. Based in Provo, Utah, EcoScraps sold its compost in 12 Valley nurseries to test demand and enjoyed strong sales without having to do any advertising. That justified starting a composting operation in the Valley, rather than shipping product from Utah. Arizona sales are projected at $400,000 this year.

The company takes in five to six tons of food waste a day. It's pulverized and mixed with wood chips. The Valley's poor soil was a part of why the company made its first foray outside Utah, Sargent said.

"People down here buy a lot of soil amendment and it just seemed like a good fit for us," he said. "Arizona is also very conscious about eco-friendly matters and so that was a good fit as well."

EcoScraps has aggressive expansion plans through the west and south. It has started selling in Oregon and Colorado, and plans to open facilities there this summer. It's also eyeing franchise options in New Mexico, Texas and southern California. There's some competition for food waste from hog farmers, but Sargent said the supply is massive.

"Americans throw away 30 million tons of food annually, which is enough to fill up a football stadium every three days," he said. "It's quite a problem."

The idea of EcoScraps was triggered in late 2009, when Sargent and a friend breakfasted on all-you-can-eat French toast at a restaurant. They didn't finish it all and Sargent said he thought about all the wasted food that's thrown away. He began rummaging through trash bins for food waste and experimenting with compost.

Soon, Sargent and two other company founders set up a large-scale operation and dropped out of Brigham Young University to focus on a business that now employs about 20.

EcoScraps joins another waste-reduction program in Tempe. The city is in the midst of a pilot program to collect yard waste for compost, which reduces landfill volumes. Tempe could save $300,000 a year if the program goes citywide, said councilwoman Onnie Shekerjian. Only four neighborhoods are participating now. The city is also exploring whether it can take restaurant food waste to be turned into earthworm food.

Shekerjian said the city is eyeing green initiatives not just to appeal to environmentalists, but to reduce its costs.

"We all realized that in order for people to do good things for the earth, that it had to meet people's economic bottom line," she said.

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