June 7, 2011 | Jeremy Ogul

In spring 2009 Nikhil Arora and Alex Velez were in their final semester at UC Berkeley’s Haas School of Business headed toward careers in consulting and banking when a remark made by a professor about the potential for growing mushrooms with used coffee grounds piqued their interest. With a desire to create a socially responsible and sustainable business that could make use of the millions of tons (~24 million tons per year) of used coffee grounds that go almost entirely to waste each year, the two classmates decided to further investigate the idea. What emerged from their research and consultations with mycology experts was Back to the Roots Ventures (BTTR), a startup company focused on sustainably farming gourmet mushrooms in used coffee grounds. 

From fraternity kitchen to Chez Panisse and Whole Foods Market

After developing a formula in their fraternity kitchen for growing Pearl Oyster mushrooms in recycled coffee grounds, the two classmates took the bold step of taking their very first locally and sustainably grown crop over to Chez Panisse, a restaurant famous for inspiring California cuisine and the fresh, local organic food movement. Alice Waters, the restaurant’s founder, had her sous chef sauté some of the mushrooms on the spot and gave them her approval.

That same day, Arora and Velez took a sample over to Whole Foods Berkeley, where they received a warm reception from the store manager. Following a humorous email exchange between management about “some Berkeley kids selling ‘shrooms,” a regional buyer decided to offer them the opportunity to sell their produce in all 30 Northern California Whole Foods Markets. With the help of a $5,000 grant from UC Berkeley, the pair quickly scaled their indoor mushroom farm to meet demand.

The science of growing mushrooms in coffee grounds

Pearl Oyster mushrooms can grow on almost any cellulose-based material, provided that it has been treated correctly, said Matthew Smith, a postdoctoral researcher at Duke University. They are usually grown on oak wood products such as logs and woodchips. They can even grow well on wet paper.

So what’s so special about coffee grounds?

“The reason that coffee grounds are so good is because boiling water is passed over them, which gets rid of most of the other organisms,” said Smith, a postdoctoral researcher at Duke University. “The coffee grounds are not exactly sterile, but they are very clean, and when you add the fungus it has the entire substrate mostly to itself (no other fungi will really be present, but bacteria will be there).” Another thing that makes coffee grounds great for growing Pearl Oyster mushrooms is that used coffee grounds are wet, giving the fungus plenty of moisture to grow.

BTTR Ventures sources all its coffee grounds from Peet’s, a coffee shop chain headquartered in the San Francisco Bay area. Arora said BTTR Ventures is on track to recycle 1 million pounds of coffee grounds from Peet’s this year. “At our core, we’re waste collectors,” Arora said. “We’re taking a waste stream and adding value to it.”

The company has even found a use for the leftover mushroom root-enriched coffee ground waste generated by its processing operations, which it packages and distributes as a premium, chemical-free soil amendment.

A sustainable urban mushroom farm in every home across America

A desire to extend the concept of recycling and reusing waste streams beyond their urban sustainable mushroom farm and into every single home across America led BTTR Ventures to make the decision to shift its focus from commercial produce sales to the development and sale of consumer friendly home mushroom kits. The company began selling the kits under the brand name Easy-To-Grow Mushroom Garden in early 2010 and sales have been brisk ever since.

Retailing for $19.95, the Mushroom Garden is essentially a box that contains a plastic bag filled with recycled coffee grounds. The grounds have been specially inoculated with the spores to grow pearl oyster mushrooms. All you have to do is open the box, mist it twice daily with an included mister, set it on a windowsill, and let nature work its magic. After about 10 days, the mushrooms are ready to harvest. The first crop will yield up to a pound and a half of mushrooms. The kits are sold at over 250 Whole Foods stores across the US as well as at science and nature stores, nurseries and online at http://www.bttrventures.com.

The company has already reached break-even revenue, though Arora said that BTTR Ventures is less interested in making a profit than in uplifting and educating people about food and sustainability.

“For us, it’s not even about the mushrooms,” he said. “It’s more about the experience and educational part of getting people involved in growing their own food. Anyone who is interested in food can get excited about this. Our biggest and best response yet is from kids, which is exciting because we’re getting kids interested and involved in growing their own food.”

The future

In the near term, BTTR Ventures is looking to diversify its offering by producing Shiitake and other mushroom varieties. Smith, the mushroom expert from Duke, noted that Shiitake mushrooms are harder to grow because they are more “picky” about their growing environment and often not good at competing with other fungi in the same space. “For example, Shiitake logs that are grown to close to lots of Oyster Mushrooms will often be colonized and overtaken by the Oysters,” Smith said. Nonetheless, Arora said BTTR Ventures is determined to add more mushroom options to its product line.

BTTR Ventures is also looking to diversify the stock of food waste it uses. The company is working on establishing a partnership to collect soy pulp from a tofu factory in Oakland. Other possibilities for stock include spent grains and hops from an Oakland brewery and tea waste from an Oakland tea factory.

Having recently moved into a 10,000 square foot warehouse in Oakland, Calif., the biggest barrier now for BTTR Ventures to strengthen the connection between people and the food that they eat is getting the word out about their products.

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