Innovation

GrubTubs is a new kind of waste company. GrubTubs is collecting food waste from various Austin restaurants and turning it into animal feed. The company gives the tubs to the restaurant to collect scraps and other food waste. When the tubs are full, the restaurants seals the tubs and places them outside. It is while the tubs are sitting there that the food begins breaking down. Once the restaurant is ready to switch out the tubs, it schedules a pick up/ drop off time with the company. Once the compost is ready, it is sent to local farmers to be feed for some animals and they can use this compost to also farm insects, grubs, which can be fed to chickens, pigs, and other farm animals as a good source of protein and nutrients. GrubTubs sells small vials of baby insects at a fraction of the cost so farmers can farm the grubs animals can eat. The compost can sit at the farms for several weeks to be used by the farmer at any given point. During the interview, Mr. Olivier calls the GrubTubs “nutrient batteries”. Later the farms can sell the locally farmed meat back to the local restaurants and the process continues. The information about the innovation was obtained from an interview with Founder, CEO, Mr. Robert Olivier.

Robert Olivier developed the business model and his entomologist father is responsible for the idea to use the larvae of the species hermetia illucens, better known as the black soldier fly. This insect fits GrubTubs needs perfectly as the larva are often used for composting and are one of the bests sources of sustainable protein for animal feed.

GrubTubs’s mission has three major parts. The first goal is to reduce waste wherever possible. The second goal is to create better feed which will create better farmers and better food for us. Their final goal is to make domestic farmers more competitive on a global scale by providing them a more cost-effective way to feed their livestock.

Inspiration

Mr. Olivier has a lengthy background in doing work that is considered green, when asked what led to that he said, “A business that can do good for the environment and at the same time make money doing it, you get employees and customers that stand behind you. It's important that people love you for what you do. It makes things easier because it can separate you from competitors.” When asked what the motivation or purpose for the GrubTub innovation specifically, Olivier answered, “Because it makes sense. Do good and eliminate waste.”

According to Robert Olivier, the idea of turning food waste into animal feed has been around for a long time. The reason the idea wasn’t pursued was because it wasn't profitable. He experienced this first hand when he wrote a business plan for a feed mill to turn food waste into animal feed in 2006. It quickly became apparent to him that it was not a profitable business. However, with the help of his team, his father, and a lot of mistakes, Olivier discovered a way to use food waste to offer local farmers animal feed that was sustainable and affordable, all the while creating profits for his business.

Overall impact

GrubTubs is a Platform Company similar to Uber. Uber is a taxi service without any cars. Grubtubs is similar in the way that they are a trash business without a landfill, a feed business without a feed mill, and a delivery service without their own fleet of trucks. Platform companies create value for two parties, in this case, the restaurants and farmers. Restaurants are more profitable than the farms but because Grub Tubs creates value for both restaurants and farmers, there is a self-reinforcing principle at play. The more farmers they get the more restaurants they get and visa versa. In the United States, 40 percent of food today goes uneaten. Americans are throwing out the equivalent of $165 billion each year and all the uneaten food is sent to landfills. Food waste is the single largest component of U.S. municipal solid waste and accounts for a large portion of U.S. methane emissions. Hundreds of thousands of restaurants in this country paying about 4 billion a year to send 25 million tons of food to landfills. Having an innovation like this could significantly reduce the amount restaurants spend on trash while also recycling the food waste. Farmers in this country have been going bankrupt because the cannot compete with the prices of foreign farmers. For the farmers, however, working with Grub they save about 1000 dollars a month for every 1000 birds that they have to feed. Mr. Olivier believes, “If something is truly good for the environment it is going to bring value back to the places that we operate.”

Business benefit

GrubTubs has proven to be profitable. With this company, the innovation of repurposing the food waste from restaurants into animal feed for local farmers is the business in its entirety. GrubTubs has business benefits from both sides, but the company profit more from there interactions with the restaurants. When talking with Mr. Olivier, it was made known that the restaurant side has a gross margin of about 40%-50% compared to 10-15% for the feed side. There is a cycle to this innovation in the sense that GrubTubs can’t have one side without the other. Mr. Olivier is also connecting local farm and local restaurants which can have business benefits for both the restaurants and farms.

Social and environmental benefit

GrubTubs promotes sustainable agriculture within its community. The animal feed being produced by GrubTubs reduces the costs local farmers spend on feed while also eliminating the current feed that is being used that is environmentally unsustainable. This innovation also allows smaller family farms, that prefer to grow food without chemicals and oil dependencies, to better compete with global and multinational farming practices. One of the largest environmental benefits presented by GrubTubs is its effect on landfills. GrubTubs has turned many Austin restaurants into zero-waste business, ultimately reducing the amount of waste sent to landfills. Landfills are the single largest source of methane, a greenhouse gas, so reducing the amount of waste present in landfills can help to combat climate change.

Interview

Robert Olivier, Founder and CEO