Transforming food waste to gains: A conversation with Divert CEO Ryan Begin

Even more powerful than finding a solution to a problem is turning a problem into a solution.

That's essentially what Divert Inc. — a West Concord, Mass.-based impact technology company on a mission to convert wasted food into energy — is doing.

The company provides an end-to-end solution that it says prevents waste by first maximizing the freshness of food at retail; then recovering edible food to repurpose or donate; and finally, taking food that cannot be consumed and turning it into renewable energy — some of which is used to help grow more food.

“We didn't really know what we were doing when we first started,” Ryan Begin, Divert Inc. co-founder and CEO, told The Packer when we sat down with him on the eve of his keynote presentation at last month's Organic Produce Summit 2023 in Monterey, Calif.

“But we did know food waste was a problem. We also knew that anaerobic digestion — taking organic matter [or, in this case, food waste], breaking it into biogas and rescuing the nutrients within that food — was a really cool, interesting thing," he said.

That was 16 years ago. Since that time, Divert has processed 2.3 billion pounds of wasted food, donated 9.6 million meals to the food insecure and partnered with 5,400 retail locations — including Ahold Delhaize, Albertsons Cos. and Kroger stores — to divert food waste.

Retailers step on the gas

At the end of the anaerobic digestion process, Divert is left with biogas and a highly concentrated compost called digestate. This digestate can be further composted and used as a fertilizer for farms or local gardens.

The biogas can be used to create electricity or can be converted into renewable natural gas by removing impurities, such as water and carbon dioxide. This conversion process leaves an end-product made up mostly of methane, the primary component of natural gas.

While Begin says Europe has been using anaerobic digestion for decades, it's lesser known in the U.S., where in 2007, he considered how to create a business based on food waste technology.

Grocery stores were a natural place to start, he says.

“Retailers have a food waste problem, but circa 2010 it was very much focused on zero waste,” said Begin, pointing to AB 1826 in California, which required businesses to recycle their organic waste on and after April 1, 2016, depending on the amount of waste they generated per week.

“It forced retailers to start recycling,” Begin said. “And that was what led us to Kroger and its Compton, Calif., facility — our first major commercial success. We built a very large facility at their distribution center in Compton. That was the first time we saw all of this food waste coming back from retail locations — Ralphs, Food 4 Less — 330 locations at that time.”

Begin says Kroger and Divert were using reverse logistics — what Kroger couldn't sell came back to the distribution center and Divert would offload it with the Cincinnati-based grocer's pallets.

“What was really fascinating was you started to see what stores were throwing away,” Begin said. “And it didn't matter whether they were in Modesto or San Clemente, [Calif.,] all the waste was there in one location. You could never get that experience driving to individual stores. That was the first time we said, ‘look at all this food waste.'”

Grocery retailers were throwing away more than they thought.

“It was an epiphany for us,” he said. “We realized it couldn't be just recycling infrastructure and it couldn't be just reduction, because there's always going to be food that goes to waste one way or another. So, there was a need for this higher platform. That was really the genesis of where we are now, which is tackling this problem from the beginning all the way to the end and looking at where we can add value and where there are gaps.”

One gap Begin and team saw: lack of store-level knowledge.

In his keynote presentation at OPS, Begin recounted a store visit during which he observed a produce employee pulling iceberg lettuce. Every few heads, the employee would discard one. When Begin asked the employee why he was throwing away the iceberg, the produce clerk replied that he was told to “throw away anything brown.”

Begin showed a photo of the brownish stem on a head of iceberg lettuce.

“We help our retail partners understand how to better run their businesses,” Begin said. “What gets measured, gets managed.”

A physical problem with a hands-on solution

Food waste is a $408 billion problem each year, and only 17 years of landfill capacity remains, Begin said. Divert, which in June announced it had processed over a billion pounds of wasted food since 2021, says 85% of the wasted food it receives is produce.

But it's not just wasted food that's a problem. Packaging is yet another hurdle.

“Retailers have a lot of packaging. When it's a very physical problem, there's not a software solution,” Begin told The Packer. “We knew that to solve this, we had to touch the food. It had to be physically moved and processed. And that, for us, is a competitive advantage.

“Our facilities are taking that material that comes back and we're de-packaging it mechanically,” he continued. “We create two streams — one is a liquid stream that has the consistency of a smoothie; the other stream is all of the plastic — it's the seeds and all the things that won't break down in anaerobic digestion.”

Begin says it's an 80/20 split, with 80% going to renewable energy and 20% comprised of residuals that typically go to incineration or other forms of disposal.

“We're working on this now and think we can get that number down to 15%,” Begin said. “The theoretical max would be about 10% because of all the plastics and other things that are not compatible with digestion.”

As to the 80%, Divert says producing electricity at scale from anaerobic digestion is less efficient than producing renewable natural gas.

At its facilities, the renewable natural gas produced is combined heat and power, or CHP, which it supplies to third-party companies such as British Petroleum. This energy source replaces fossil fuel consumption by creating a renewable alternative to traditional natural gas.

The path to greater profitability

Divert also helps grocery retailers to look at the food waste generated by each of its stores and to compare that waste with stores of similar size. This allows retailers to focus on their top stores for food waste.

“When you start doing that year over year, you can start to see change in a retail space,” Begin said. “Shrink is a massive loss for retailers. It can really make or break a specific store.

“The go-to metric for us is, if we can eliminate wasted food for retailers, we can double their net profit margins,” he said.

Related: Giant Food and Divert process 30.8 million pounds of wasted food