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Wise to the challenge14th Dec 2009
As published in the CIWM Journal, December 2009.
A look at the experience of Biowise in bringing a quality compost to market with its Director, Dan Ingram.
Biowise has been successfully composting biodegradable waste at its licensed site in East Yorkshire since 2001. The business has grown organically year-on-year and with the roll-out of the local authority’s kerbside collection of garden waste, as well as a 60,000 tonne in-vessel composting facility about to start construction, the company identified a pressing need to establish markets for its quality compost. Its business model is shifting as it places more emphasis on selling end products, and achieving maximum value at the back-end, enabling it to offer more competitive gate fees at the front-end.
A dilemma that many composters face is finding commercial markets for their end product - it can seem a formidable challenge. Developing a clear understanding of the wide and varied applications for compost from which to formulate an effective marketing plan is no small undertaking. Fortunately Biowise boasts an agricultural expert (a farmer to you and me), and an experienced business consultant amongst its directors. It also has a biochemist and an ex-media devotee on the team. Nevertheless, they were still grateful to be awarded WRAP funding for an interim manager tasked with identifying and developing local markets. Mark Baker from Walker Resource Management worked closely with the management team over an eight-month period. He explained: “Opening up new local markets and encouraging farmers and local retailers to use compost from recycled green material is always a worthwhile challenge”.
Having undertaken some local market research, the team quickly identified two initial key areas to focus on: the bulk agricultural market and a bagged range of products for distribution in the retail market. Although the two markets presented vastly different requirements in terms of product qualities and promotional efforts, Biowise felt its production and business methods were flexible enough to rise to the challenge.
Surprisingly, it was some of the sheer practicalities of what it was attempting that provided the biggest hurdles. Increased space and storage requirements; more equipment for screening; and bagging and transport that could prove to be reliable day in day out, was essential. The significant investment in time, machinery and resources all presented considerable challenges. Fortunately Biowise achieved BSI PAS 100 and Quality Protocol certification relatively quickly, but there was still a long way to go in terms of identifying the exact recipe for a successful growing media product for the retail market. Trials conducted by Walker Resource Management on their behalf lasted several months but were critical in being able to produce a bagged product that it was absolutely confident would provide the necessary benefits to the gardening public.
Once Biowise started taking its product to market it hit new challenges. The team knew it could provide some extraordinary benefits to local agriculture, if they could just persuade them to listen. Mark Baker recalled: “We needed to be proactive in trying to educate farmers in Hull and East Yorkshire on what true soil amendments are, how to use compost effectively, how to identify what they need and how to ensure they get what they want”. As well as the cost and environmental benefits of moving from inorganic fertilisers to organic compost, the improvements in soil quality are significant, in the long-term allowing easier ploughing, better water retention and longer term nutrient supply. Biowise is now providing compost to a number of farmers in the region on a trial basis from which it anticipates very favourable results and increased future demand.
The retail market was always going to be a different ball game. The company identified a clear gap in the market for something different: a quality, peat-free, organic, locally produced compost, pitched at the modern gardener for whom the environment and sustainability is an important issue. Some composters believe that sales of a bagged product to home gardeners will bring the highest return – sadly this is not necessarily always the case. The competition in this market is fierce, meaning that products typically sell at very low profit margins. This is clearly a major problem for small producers. The costs of product development, production, screening, bagging, labour, storage and transport need to be covered and, although the product could be regarded as superior, the retail price is restricted by the intense competition. Furthermore it is often the case that large manufacturers tie up a garden centre by doing a multi-product deal, leaving little space for other lines.
It has been essential for Biowise to fully understand the needs of the varying end users and applications for its compost lines; not only does the actual product need to meet these needs but it is essential to get the message across. There is a great deal of information, published by the likes of WRAP, identifying the niche markets and their preferred characteristics, which has been invaluable to ongoing sales and the marketing effort. Each member of the Biowise team is becoming conversant in the benefits of organic matter, water holding capacity and conductivity; it is an ongoing learning process that will continue as more and more markets are identified.
There is a lot of work to do before compost is established as a mainstream product throughout the country. “Education” is certainly a buzz-word in the Biowise office at the moment; not only does it need to prove something to the agricultural market, but it must also focus on raising awareness amongst retailers and home gardeners. The government is trying to do its bit – a recent publication, "Safeguarding Our Soils" sets out how it plans to work with farmers and land managers to reverse the degradation of the UK’s soils, but key issues such as the plight of the peat bogs, sustainability and organic fertilisers are all relatively low in the consumer’s consciousness when they purchase compost, and product stigma is still, to some extent, a problem. With that in mind Biowise is planning a series of local training and promotional events to support the launch of its bagged products over the next few months, with the aim of bringing some of these issues to the fore.
In these early days Biowise can only hope that their efforts reap some rewards in the future and not just for its own bottom line, but for the sake of the environment.