Circular food economy in the city centre of Utrecht: re-using coffee waste
Municipality of Utrecht, Katharina Prause
Florentine Leeters Vasiliki Kamilaraki Sanchali Bose Arno Foppe Jet ten Berge Sara Benito Inge Smits
Contact information Commissioner Municipality of Utrecht Katharina Prause Telephone number 06-14614803 / 030-2865846 E-mail address firstname.lastname@example.org Team secretary Jet ten Berge Telephone number 06-16645164 E-mail address email@example.com
This report (product) is produced by students of Wageningen University as part of their MScprogram. It is not an official publication of Wageningen University or Wageningen UR and the content herein does not represent any formal position or representation by Wageningen University.
Picture frontpage: copyright ÂŠ Yanko Design 2016
Preface We are a temporary academic consultancy team formed for the course Academic Consultancy training (ACT) at Wageningen University and our backgrounds are very diverse. Our team consists of seven MSc students from the fields of biology, bioinformatics, plant sciences, management, economics and consumer studies, environmental sciences, and organic agriculture. We all signed in for this subject out of concern and interest in a more circular economy where waste is a relic from the past. This report should be seen as a first study on the feasibility of a business cultivating oyster mushrooms on coffee waste in the Beurskwartier. This is part of the exploratory phase, so nothing is official yet. The next step is to actually set-up the business, using this report as a guide. The initiative for this lies at an entrepreneur as well as the municipality. Our commissioner is the Living Lab Utrecht â€˜Slimme en Gezonde stadâ€™1, a collaboration between the municipality of Utrecht, ministry of Infrastructure and Environment, the province of Utrecht and Rijkswaterstaat. One of the four working lines of this program is the circular economy: the conscious use of materials. Because of the great amount of coffee waste in the area, this project focussed on considering the possibility of processing this coffee waste into oyster mushrooms on a large scale in the Beurskwartier. We started contacting several partners that seemed interesting in this case and reading about the relevant aspects in different sources. Based on the gathered information, we made an upscale-able design. We were very happy to find so many of the interviewees interested and enthusiastic about this case. We believe that in future such a business can happen and the stakeholders involved will take the initiation. We like to thank the Fungi Factory for their openness and willingness to share their knowledge and insights with us, the way they run their business has been a big inspiration for this report. Besides, we would like to thank Steven Keulemans (interested entrepreneur) because his view and initiative regarding this topic were of great help for us. Last but not least, we would like to thank our commissioners, especially Katharina Prause, our coach Pieter de Waard, our academic advisor Jan van Dam, and all the interviewed stakeholders who were so kind to share a bit of their time and enthusiasm with us.
Executive summary The topic of this report is growing oyster mushrooms on the coffee waste of the Beurskwartier in Utrecht. This concept, being quite an appealing and practical example of the circular economy, is proposed by the Living Lab Utrecht ‘Slimme en Gezonde stad’ to be investigated further. The present way of handling the enormous amount of coffee waste is mainly by composting it with other organic waste or incinerating it. There are more sustainable options that should be considered and one of them is converting it into a valuable edible product. The process of growing oyster mushrooms takes place in two stages and the only requirements are the proper control of the humidity, temperature, light, and ventilation. Thus, the location of growing mushrooms must meet all the requirements for optimal growth. The business of growing oyster mushrooms is popular and there are six stakeholder groups involved in it: the coffee waste providers, investors, waste collection parties, facilitators, mushroom growers, and the buyers of mushrooms. A shortlist has been framed in this report consisting of the stakeholders we got input from, while the longlist is consisting of all stakeholders considered as potential partners. The market analysis of the business case highlights the fact that the market for growing oyster mushrooms on coffee waste (including side activities) is quite an attractive one. The reason behind this claim is that this industry fulfils the requirements of an attractive industry having few competitors, high barriers to entry, few substitute products, low power of suppliers, and low power of customers. The business is expected to earn a monthly profit of €3500 having a capacity to deal with 128 kilogram of coffee waste per day and producing 27 kilogram of oyster mushrooms per day. The profit also includes among others the compost from the mushroom waste that can be sold along with the oyster mushrooms. There are various environmental benefits of growing the mushrooms on spent coffee grounds as it can save water and electricity by skipping stages of the industrial mushroom growing process. The environmental impact of some extra transportation like importing mushrooms and transporting coffee waste to processing facilities can be avoided. It is also noteworthy that the waste from mushroom production can be a valuable material for further use. Thus, growing oyster mushrooms on coffee waste can be equally productive and profitable as growing them on wheat straw like is common in the Netherlands. At the same time, the amount of coffee waste can be reduced and become economically important. There are various ways to deal with the coffee waste but it is wiser to convert food waste into a valuable and nutritious food product, according to Moerman’s ladder. That is why growing oyster mushrooms on coffee waste is a promising implementation of circular economy.
Managementsamenvatting Het onderwerp van dit rapport is het telen van oesterzwammen op koffieafval van het Beurskwartier in Utrecht. Dit concept is een aantrekkelijk en praktisch voorbeeld van de circulaire economie, daarom heeft Living Lab Utrecht ‘Slimme en Gezonde stad’ voorgesteld dit verder te onderzoeken. In het huidige systeem wordt de enorme hoeveelheid koffiedik voornamelijk verwerkt in compost of verbrand. Er zijn echter duurzamere opties en een daarvan is om het te gebruiken in de productie van een waardevol eetbaar product. Het groeien van oesterzwammen gaat in twee stadia en de enige benodigdheden daarvoor zijn de juiste luchtvochtigheid, temperatuur, lichtintensiteit en ventilatie. De locatie voor de zwammenkwekerij moet aan al die voorwaarden voor optimale groei kunnen voldoen. Het telen van oesterzwammen op koffieafval is populair. Er zijn verschillende partijen die belang hebben of zouden kunnen hebben in een bedrijf als dit, zoals de producenten van koffieafval, investeerders, afvalinzamelaars, faciliteerders, oesterzwammentelers en oesterzwammenafnemers. De belanghebbenden die tijdens de totstandkoming van dit rapport zijn gecontacteerd en aangaven geïnteresseerd te zijn, vormen de ‘shortlist’. De ‘longlist’ bevat alle potentiële partners. Uit de marktanalyse blijkt dat de markt voor oesterzwammen geteeld op koffieafval een aantrekkelijke markt is. Dit komt doordat deze industrie voldoet aan de eisen van een aantrekkelijke industrie, er zijn namelijk weinig concurrenten, hoge drempels om de markt te betreden, weinig gelijkwaardige vervangende producten, weinig leveranciers en de macht van de consumenten is laag. Verwacht wordt dat het bedrijf een degelijke maandelijkse winst van €3500 kan maken met de capaciteit voor het verwerken van 128 kilo koffiedik per dag en een productie van 27 kilo oesterzwammen per dag. Deze winst bevat ook de inkomsten uit de verkoop van het restproduct als compost na de teelt. Er zitten verscheidene milieuvoordelen aan het telen van oesterzwammen op koffiedik ten opzichte van de industriële teelt. Op koffiedrab kunnen een aantal stappen van het industriële proces worden overgeslagen, waardoor water en elektriciteit worden bespaard. Bovendien kan een deel van het transport in het oorspronkelijke systeem, zoals het importeren van oesterzwammen en het transport van koffiedik naar de plaats van verwerking, worden vermeden. Belangrijk om op te merken is dat ook wat er overblijft van het koffieafval na het teeltproces een waardevolle grondstof voor andere toepassingen is. Het telen van oesterzwammen op koffieafval kan even productief en winstgevend zijn als het telen op stro zoals dat gebruikelijk is in Nederland. Daarbij wordt de hoeveelheid koffiedik verminderd en economisch waardevol gemaakt. Er zijn verscheidene manieren om met koffiedik om te gaan, het omzetten van voedselafval in een waardevol en voedzaam voedingsmiddel is volgens de ladder van Moerman een duurzamere oplossing dan wat er op dit moment mee gedaan wordt. Dit maakt het telen van oesterzwammen op koffieafval een veelbelovende toepassing van de circulaire economie.
Table of contents Introduction........................................................................................................................ 9 1 Background information ................................................................................................... 11 1.1 The oyster mushroom ................................................................................................ 11 1.2 Substrate types ......................................................................................................... 11 1.3 Traditional cultivation................................................................................................. 12 1.4 Coffee waste as substrate........................................................................................... 12 1.5 Recommendations ..................................................................................................... 13 2 Stakeholder analysis ........................................................................................................ 14 2.1 Longlist .................................................................................................................... 15 2.2 Shortlist ................................................................................................................... 17 2.3 Recommendations ..................................................................................................... 20 3 Market analysis ............................................................................................................... 21 3.1 Power of current and potential buyers .......................................................................... 22 3.2 Power of current and potential suppliers ....................................................................... 23 3.3 Threat of substitute products ...................................................................................... 23 3.4 Threat of new entrants ............................................................................................... 24 3.5 Policies..................................................................................................................... 24 3.6 Internal competition .................................................................................................. 25 3.7 Potential market for mushrooms grown on coffee waste ................................................. 26 3.8 Recommendations ..................................................................................................... 26 Environmental analysis ....................................................................................................... 27 4.1 Environmental analysis of the growth phases ................................................................ 28 4.2 Other environmental benefits ...................................................................................... 29 4.3 Alternative ways of dealing with the mushroom waste ................................................... 32 4.4 Recommendations ..................................................................................................... 33 5 Technical and financial design ........................................................................................... 35 5.1 Technical design ........................................................................................................ 35 5.2 Financial design ........................................................................................................ 39 5.3 Recommendations ..................................................................................................... 40 6 Conclusion and overall recommendations............................................................................ 42 6.1 Conclusion ................................................................................................................ 42 6.2 Overall impression ..................................................................................................... 42 6.3 Recommendations ..................................................................................................... 43 References ........................................................................................................................ 46
Appendix ........................................................................................................................... 52 A Methodology............................................................................................................... 52 B Interview guide............................................................................................................ 54 C Technical study ............................................................................................................ 58 D Financial study ............................................................................................................ 59
Introduction Resource limitations and the huge amounts of waste are important problems that humanity has to face. Unfortunately, the consumption of natural resources is faster than the production, enhancing the tendency for unsustainability (Pauli, 2011). Since certain resources are non-renewable and because of the high level of their exploitation, humanity is called to find a way to slow down the rhythms of exhaustion and to find an alternative way of using resources. This can be done by for example taking advantage of the huge amounts of waste and reusing them. Using waste as an alternative resource again is one of the characteristics of the circular economy. This is a concept focusing on an integrated approach for the reduction of the resource input, waste, emission, and energy leakage in production systems, by reusing the waste of a (industrial) chain as input for that chain again (MacArthur, 2012). The Netherlands is aiming to reach a circular economy before 2050 (Government of the Netherlands, 2016). Within the Netherlands, Utrecht is one of the cities taking the lead. The municipality of Utrecht, the ministry of Infrastructure and Environment, the province of Utrecht and Rijkswaterstaat together form the Living Lab Utrecht and are working together to achieve the â€˜Circular Region Utrechtâ€™. One of the ideas of the Living Lab is to connect small teams of students and sustainability issues to stimulate the idea of creating a more sustainable city (Utrecht University, 2017). Part of that can be locally reusing a waste stream. An example of an everyday waste product that is available in large amounts in all big cities and that has a potential for reuse is coffee waste. Nowadays, coffee waste is used for multiple purposes and used in different parts of the world. Examples are that coffee waste is collected separately in order to produce compost (Preethu et al., 2007), bioenergy (Caetano et al., 2012) or oil for pharmaceutical industries (Acevedo et al., 2013). A promising application of coffee waste is to grow oyster mushrooms on it (Hoffmann, 2014). As this can be done locally and is a quite appealing and practical example of the circular economy, it is proposed by the Living Lab to be investigated further. A nursery that grows mushrooms on coffee waste collected from the neighbourhood holds an opportunity of having new jobs, economic growth and lower environmental impact in the province of Utrecht. The Living Lab wants to achieve this by stimulating entrepreneurs to start a business like this. There are companies already growing oyster mushrooms on coffee waste, but they are either too small in scale to make an impact on the total amount of coffee waste or they are focused on other areas than the Beurskwartier. There are currently entrepreneurs dealing with circular economy in the province of Utrecht, but their focus is mainly on building materials. Moreover, in the food sector the awareness about the potential of food waste as an important material in the chain of circular economy is relatively low. A business like this on a large scale would be new for Utrecht. A suitable area for setting up this business would be the Beurskwartier. The Beurskwartier area in Utrecht is close to the Jaarbeurs and the central train station, the busiest train station of the Netherlands, serving 88 million passengers per year (Utrecht Centraal, n.d.). Besides, Beurskwartier is home to big companies like banks, municipal authorities, governmental offices, and Dutch Railway offices. Lots of passengers pass through and lots of people work in this area, resulting in a high daily coffee consumption. For these reasons, it is an area of great interest. It is also an area that will be re-developed in the coming years (figure 1), making this a perfect moment to set up a business like this.
Figure 1 Impression of the central station area by 2030. Coloured parts will be newly build. Retrieved from: USI (n.d.)
Presently, the major part of the coffee waste of the Beurskwartier is being segregated along with other organic waste and its fate is either biogas, compost, or incineration (Goh et al., 2015). As the Living Lab is interested in stimulating the circular economy in Utrecht by reusing coffee waste for oyster mushroom growth, the following research questions and sub research questions are set up to get a better insight in potential partners and the upscaling potential of such a business. The methodology used can be found in Appendix A. To what extent is it feasible to set up a circular business that grows oyster mushrooms on coffee waste on a large scale in Utrecht? What is the process of growing mushrooms on coffee waste? Who are relevant stakeholders to be involved in this large scale circular business? What is the potential market for mushrooms grown on coffee waste? What are the challenges regarding the logistics, location, and cultivation process and what are the possibilities to tackle them? What are the environmental costs and benefits of this large scale circular business? What are the financial costs and revenues of this large scale circular business?
1 Background information In het volgende hoofdstuk wordt ingegaan op de biologische achtergrond van de oesterzwam en het telen van oesterzwammen op verschillende substraten. De oesterzwam behoort tot de witrotschimmels. Het genus van oesterzwammen bestaat uit vier soorten, in dit rapport zal met de term oesterzwam echter alleen de soort Pleurotus ostreatus worden bedoeld. Wilde oesterzwammen passen hun groeicyclus aan de seizoenen aan. Bij het telen van oesterzwammen is het daarom zaak om de seizoenen in je proces na te bootsen. Traditioneel worden oesterzwammen in Nederland op stro geteeld, maar het telen op koffiedik is even productief. Het gebruik van koffiedik heeft een aantal voordelen ten opzichte van stro. Koffiedik kan bijvoorbeeld niet als diervoeding worden gebruikt, maar het restproduct van de oesterzwamteelt wel. Bovendien hoeft er aan koffiedik geen extra voedingsstoffen te worden toegevoegd om het geschikt te maken voor oesterzwammen. Bovendien bevat koffiedik stoffen die het milieu vervuilen, de oesterzwammen zetten die om en gebruiken ze voor de groei. De grote oesterzwammentelers in Nederland doen in feite hetzelfde als de kleinere telers die koffieafval gebruiken (figuur 1.1). Voor het opschalen van de teelt op koffieafval hoeft er aan het proces zelf niets te worden veranderd. In the following chapter, background information about growing oyster mushrooms on coffee waste will be provided. First, biological background on oyster mushrooms and their growth process will be provided. Second, different substrate types which are currently being used for growing oyster mushrooms are discussed. Third, the traditional cultivation of oyster mushrooms; on straw is being discussed. As fourth and last point the merits of coffee grounds as a substrate for growing oyster mushrooms is being discussed.
1.1 The oyster mushroom The genus of oyster mushrooms (Pleurotus spp.) consists of white-rot fungi. White-rot fungi are characterised by the fact that they, besides cellulose and hemicellulose, degrade lignin, whereas brown-rot degrades only polysaccharides (Guillén et al., 2005). Cellulose and lignin are the most abundant organic compounds on earth, as they form the main components of all plants and trees. Because lignin is responsible for the strength of the cell walls, white-rot results in typical softened wood and makes trees prone to breaks. Oyster mushrooms grow on living as well as dead deciduous trees. Oyster mushrooms are the second most cultivated mushrooms in the world (Kües, 2007). The genus of oyster mushrooms consists of four species. In this report, however, with ‘oyster mushroom’, only the species Pleurotus ostreatus is meant. This is a commonly consumed oyster mushroom in the Netherlands. Within this species, there are several strains on the market, that have slightly different characteristics and preferences for growth conditions. Wild oyster mushrooms adjust their growth cycle to the seasons. During spring and summer, the mycelium grows and in autumn the fruiting bodies - the actual mushrooms - are formed. When commercially cultivating oyster mushrooms, the key is to mimic the seasons during the process. The mycelium grows optimally at a pH higher than 5.0. At a pH of 6.0 the production of xylanase (an important digestive enzyme) is optimal (Furlan et al., 1997; Qinnghe et al., 2004). At this phase, the fungus performs best in darkness at a temperature of between 25-30ºC (Furlan et al., 1997; Zervakis et al., 2001). Besides, an air humidity of about 60% is optimal. During the fruiting phase, an air humidity of 80 to 90% is required (Manachère, 1980). A sudden drop to a lower temperature of about 10 to 15ºC induces this fruiting phase (Manachère, 1980; Kong, 2004).
1.2 Substrate types Oyster mushrooms grow well on sawdust (Shah et al., 2004). This, combined with the fact that sawdust is a waste product and thus very cheap, makes that sawdust is an often-used substrate for large scale production of oyster mushrooms. But, the oyster mushrooms are a genus that is relatively easy to cultivate, as it does not have very specific wishes regarding its substrate. The mushrooms are therefore cultivated on whatever source high in lignin and cellulose is broadly
available. That can be sawdust, as is used in South East Asia, but also banana leaves, peanut hulls, rice straw or mango seeds. In Europe, oyster mushrooms are often grown on wheat straw (Mandeel et al., 2005). It is cheap and environmentally friendly to grow mushrooms on these waste products. However, some of these products could also be used as animal feed and the demand for it to produce biogas and compost is rising (Mandeel et al., 2005). Besides, mushrooms grow better on these substrates when they are supplemented with extra nutrients (Carvalho et al., 2010). Coffee is the second largest traded commodity of the world and responsible for a lot of waste (Mussatto et al., 2011). A big share of this waste is spent coffee grounds, a product high in lignin and cellulose (Mussatto et al., 2011). In this report, the term coffee waste will refer to only this part of the waste. Organic substances like these are pollutants as they need a lot of time and oxygen to degrade. Besides, this coffee waste contains caffeine and other toxic compounds, which makes it unsuitable to use as animal feed (Mussatto et al., 2011). Although oyster mushrooms become less productive in terms of fruiting bodies on higher concentrations of caffeine, they still produce a high number of fruiting bodies on coffee waste (Fan et al., 2004). While growing, the fungus degrades about 60% of the caffeine and almost 80% of the tannins, making the rest product more suitable as animal feed. This is even more the case because of the high protein content (Fan et al., 2004). The performance of oyster mushrooms on coffee waste is comparable to that on wheat straw, but using coffee waste has several advantages. Coffee waste is for example very nutritious, so no supplements need to be added. Besides, the coffee waste can be dried for later use, without any loss of its value for this purpose (Salmones et al., 2005). Moreover, a polluting waste product is turned into mushrooms and a by-product that is high in proteins. Although only coffee machines with beans provide proper waste, this valuable waste can be collected from a lot of different places.
1.3 Traditional cultivation Oyster mushrooms in the Netherlands are traditionally, like in the rest of Europe, often grown on straw. The straw is chopped in smaller pieces, to make the cells more accessible for bacteria. These bacteria will perform the first part of the degradation process, so that the oyster mushrooms can make a quick and easy start. Therefore, right before the spawn of the mushrooms is added, the straw is heated to kill the present microorganisms. Most traditionally grown oyster mushrooms are grown on large beds of straw, however some producers grow them in large hanging plastic bags as well. The mushrooms are grown in climatized rooms at a temperature between 28°C and 31°C with perfectly clean air to prevent any other fungus or bacterium to settle in the substrate and limit the growth of the mushrooms. After two to four weeks, when the fungus has colonised the substrate, the system is moved to another room with a temperature of about 12-14°C. There, after about six days, the first mushrooms can be harvested. Depending on the type of oyster mushroom, mushrooms can be harvested two to three times over six to eight weeks (Middelwaard, n.d.; Verbruggen, n.d.; Oesterzwammen, n.d.; Kong, 2004).
1.4 Coffee waste as substrate Currently, in the Netherlands, there are a couple of relatively small organisations growing oyster mushrooms on coffee waste and some larger companies that cultivate their mushrooms on a substrate consisting partially of coffee waste. As the smaller businesses share their knowledge on cultivation, most of them follow the same guidelines and their cultivation processes are very similar (Interested entrepreneur, P.C., September 28, 2017). The mushrooms are grown in plastic bags that are brought in different conditions according to the developmental phase of the fungus (figure 1.1). The bags are filled with a substrate based on coffee waste. A big practical advantage of using spent coffee grounds compared to wheat straw, is that there is no need to sterilise it before use, as it is already heated during the preparation of the coffee. Most microorganisms are killed or weakened and will not form a competitor for the oyster mushroom during the first two months of growth (Zadrazil, 1997). Coffee silverskin is added along with the wet spent coffee grounds, as the usage of it will make the substrate less dense (Fan et al., 2006). The addition of chalk increases the pH. The fungus itself is added in the form of spawn, a piece of active fungal culture. The bags with substrate are moved between three different environments, depending on the developmental stage of the fungus. The first one is at room temperature and used to grow the mycelium. The bags stay there for two to three weeks in complete darkness. When the bag is completely colonised (figure 1.2), the second phase starts. For
the second phase, the actual growth of the mushrooms, the bags are placed in a cooler room of about 12-14ÂşC. Small cuts are made in the plastic, so the mushrooms can grow out (figure 1.2). During three to four weeks, the mushrooms grow out and can be harvested two or sometimes three times. During the last week, the mushrooms are put outside to acquire more colour. After two or three harvests, the production of new mushrooms is very low. The nutrients in the substrate are degraded and other microorganisms might take over (Zadrazil, 1997).
Figure 1.1 The growth process of oyster mushrooms. Spent coffee grounds mixed with chalk, spawn and silverskin make up the substrate. During the growing phase, the substrate is being colonised by the fungus. After that, the bag is moved to different conditions and the fruiting phase is induced in which the mushrooms are formed. For the last phase, the harvested mushrooms are placed outside to acquire a darker colour.
Figure 1.2 BĂŠatse, S. (Photographer). (2017). On the left: Growing stage of oyster mushrooms [Photograph]. On the right: Fruiting stage of oyster mushrooms [Photograph]. Utrecht, the Netherlands.
1.5 Recommendations Cultivating oyster mushrooms on coffee waste can be equally productive as the traditional cultivation on wheat straw. Compared to traditional substrates, coffee waste has some advantages in terms of sustainability. Scaling up the cultivation process of oyster mushrooms is rather straightforward. The big, traditional growers in the Netherlands, are basically doing the same as the small entrepreneurs that grow on coffee waste. On larger scale, multiple rooms or containers can be used for each growing phase or bigger locations can be used, but there is no room or need for optimising the growth process itself.
2 Stakeholder analysis De stakeholderanalyse is uitgevoerd om de potentiële partners die in dit proces betrokken kunnen zijn te identificeren. Ten eerste zijn er zes groepen stakeholders gedefinieerd, namelijk producenten van koffiedik, investeerders, afvalinzamelaars, faciliteerders, oesterzwammentelers en oesterzwammenafnemers. Figuur 2.2 beschrijft de volgorde van de stakeholder groepen in het proces, startend met de producenten en eindigend met de kopers. Aan de hand van de groepen is er een longlist met alle mogelijke bedrijven voor potentiële samenwerkingen opgesteld (tabel 2.1). Verder is er een shortlist gemaakt, gebaseerd op de wezenlijke contacten die zijn gemaakt. Hier zijn de bedrijven ingedeeld op zowel hun interesse om op dit moment betrokken te zijn bij het proces als de verwachte impact die ze hebben (figuur 2.3). Ook is er per stakeholdergroep aangegeven op welk gebied ze interesse hebben, variërend van financiën, het milieu, de maatschappij of reputatie (tabel 2.2). De resultaten kunnen gebruikt worden bij het benaderen van nieuwe bedrijven of bedrijven die al betrokken zijn. A stakeholder analysis has been done in order to identify the potential parties in this project. For this, a modular approach was used, which can be seen in figure 2.1 The actors in this project are divided into six actor groups and thereafter ordered in modules based on their perceived importance for this project. The six stakeholder groups are: possible investors, mushroom growers, coffee waste providers, mushroom buyers, facilitators, and waste collection companies. For instance, Albron is a possible potential partner in the stakeholder group of mushroom buyers and Fungi Factory in the group of mushroom growers. Collaboration with at least one stakeholder of every group is needed to set-up this business, so if all actors from the bottom modules participate, a business of a reasonable scale is feasible. The actors from the second module give the chance to this business to become more feasible in a larger scale, by providing a broader network. The third, and by extension the fourth module, refers to more parties that can contribute to a larger scale. Interviews (conducted according to Appendix B) have been used to get a clearer insight on the roles of different stakeholders.
Figure 2.1 Modular approach dividing the actors in relevant actor groups ordered in modules in which the higher the modules are, the larger the scale of business possibilities they represent.
The flow of the process in terms of the involvement of the stakeholder groups is shown below in figure 2.2.
Figure 2.2 The flow of the process in terms of the different stakeholder groups.
The proposed chain shown in figure 2.2 shows that the first stakeholder group that is needed to fulfil the process is the group of coffee waste providers. These are the companies in the Beurskwartier that have bean machines for their coffee and are willing to provide the waste for growing oyster mushrooms. The coffee machines are often rented from an external company that stays responsible for the cleaning and the maintenance or owned by the catering company that is active in the building. However, the coffee machine companies and the caterers are contracted by the companies they are providing their services to, so these companies have to agree on their policy regarding the coffee waste from their building. Once there is coffee waste available, companies need to process the waste. Therefore, the second stakeholder group is the one of the waste collecting companies. The waste collecting companies are currently responsible for the coffee waste. They might not deal with the coffee waste anymore if it is directly collected from the caterers or the machines service by the mushroom growers. A collaboration with the waste collection company is also possible, if they would for example collect the waste first and then hand it over to the mushroom growers. One way or another, agreements with these stakeholders should be made. After the waste is taken, another group is important, namely the mushroom growers. An entrepreneur or group of entrepreneurs has to take the initiative to actually use the coffee waste and grow mushrooms on it. After the oyster mushrooms are grown, they need to be bought by mushroom buyers. These are preferably the catering companies of the companies that provided their coffee waste. If they are willing to do that depends on their own policy as well as that of the company they work for. Furthermore, investors can have an influence on this process by providing money or help, and facilitators can provide knowledge about for example locations or network contacts, which will have a positive effect on the process. Therefore, they are identified as the last two stakeholder groups. In the same order as mentioned above, a longlist is presented in which all possible stakeholders are stated. After that, a shortlist is presented in which the stakeholders that were actually contacted during the research are classified in categories according to their interest and influence.
2.1 Longlist In the longlist, which is shown in table 2.1, the different stakeholders are divided in groups according to the modular approach. This means there are six different stakeholder groups: coffee waste providers, waste collection companies, mushroom growers, mushroom buyers, facilitators, and investors. Below the following table, the stakeholder groups and their importance will be discussed.
Table 2.1 Longlist of stakeholders involved in the production of oyster mushrooms on coffee waste.
For the production of oyster mushrooms in this business case, coffee waste is needed. Therefore, large companies from the Green Business Club Utrecht, such as the municipality of Utrecht, Jaarbeurs, Rabobank and NH Hotels, but also other partners such as ABN Amro, Albron, Rijkskantoor De Knoop, Jacobs Douwe Egberts (JDE) and Volksbank can be important as potential coffee waste providers. Starbucks is a well-established company, which tries to improve the company’s reputation by behaving sustainably, so that is also a possible coffee waste provider. The companies in the Beurskwartier often collaborate with companies that provide them with coffee machines and also take care of their maintenance and cleaning. They also collaborate with waste collection companies. For instance, Selecta provides the coffee machine in Rabobank and collects the coffee waste, and EcoSmart takes the waste from the building. Additionally, there are more waste collection companies that could be interested in being involved in this case, such as SUEZ and Stadsbedrijven. It is important to mention that SUEZ is a big waste collection company that already separates the coffee waste from the organic waste. Mushroom growers have an important function in the embodiment of this business case because they have the experience and the knowledge on the process for this business case. Fungi Factory is a business that uses coffee waste for mushroom cultivation. It is located in the Botanic Garden in the Science Park of Utrecht university. Outside of Utrecht, RotterZwam is a leading business that, next to producing mushrooms, also provides its knowledge about the production process to other businesses, such as ZuiderZwam and WesterZwam. ZuiderZwam is a mushroom growing company located in Tilburg, with a number of partners in that area. WesterZwam is located in Wapserveen, it receives its coffee waste from local businesses and operates in that area. Additionally, GRO Holland is a company that grows oyster mushrooms on a substrate consisting partially of coffee waste. This large company is already established in the market and cooperating with several businesses like catering companies as Albron and Eurest. There are also entrepreneurs in Utrecht interested in starting a business in the field of producing oyster mushrooms, supporting the idea of sustainability and making the world ‘greener’. Mushroom buyers constitute an important stakeholder group for this business case. Potential companies that could buy the oyster mushrooms are Albron, Eurest, NH Hotels, Rijkskantoor de Knoop and Sodexo. Ideal would be if the mushrooms are sold to be used in the
catering of the buildings that also provided the coffee waste, as this strengthens the circularity of the business and limits the transportation distance. Facilitators constitute another interesting stakeholder group. These parties can contribute to finding a suitable location, helping with the network establishment, and sharing knowledge about the up-scaling process of the business. An example is Movares, a company that could be a possible facilitator by providing information about potential parties related to the location, the logistics and energy use. Amongst others the Economic Board of Utrecht, the GreenHouse, Jaarbeurs Innovation Mile, Utrecht Sustainability Institute (USI), MVO, Rijkskantoor de Knoop, the Social Impact Factory, Volksbank and the Living Lab can give solutions regarding facilitation, all based on their own expertise. The last stakeholder group consists of the group of investors. Their main role is the financial support of the business, because investors can provide capital in order to finance the kickstart of a business. Possible investors are mainly members of the Green Business Club Utrecht, such as Rabobank and Jaarbeurs, but also other companies which are not included in this club such as Albron and JDE.
2.2 Shortlist Quadrant The basic idea for the creation of figure 2.3 is based on the need to analyse and posit the companies of the stakeholder groups that are already contacted. The information of these initial contacts is used for mapping these businesses in terms of the level of their interest and influence. This map constitutes an overview based on the team’s perception about the companies’ willingness at the moment of contact. Additionally, this map aims to incorporate the companies in four different quadrants, in order to make a clear distinction of their position in this case.
Figure 2.3 Map that illustrates the influence and the interest of each company. Based on Bryson, (2011).
The companies that are the most important are defined as ‘key players’, due to their high level of impact and interest in this case. As a key player, the municipality of Utrecht has provided the motivation to carry out the case and also because they are responsible for bringing in the contacts. Albron, which is not only a catering company but also a coffee provider and facilitator, belongs to the key players as well, due to the fact that they are responsible for catering some of the large office buildings in Beurskwartier and also due to the fact that they already use their own coffee
waste to grow oyster mushrooms. Eurest is also willing to participate in this business network at this moment. It is a big catering company, which has a contract with the Rabobank for the next five years. Apart from this, Eurest also serves coffee and they put their coffee waste along with the organic waste of the Rabobank which is then collected by Selecta. Selecta, as well as EcoSmart, are the waste collection companies of some of the buildings in the Beurskwartier. They are wellestablished in the market and cooperate with Rabobank and Eurest. EcoSmart is a daughter company of Van Gansewinkel, which develops and produces waste bins, ensuring that waste streams are ready for recycling. JDE is one more key player of the stakeholders’ shortlist. This coffee production company is interested in the idea of circular economy and growing mushrooms on their coffee waste. JDE already collaborates with growing companies in other cities like Tilburg with the company ZuiderZwam and a comparable network could be established in Utrecht. Volksbank is included in this list as the last key player, because according to Volksbank they are open to be involved in a project like this. They are willing to participate in this network by delivering their coffee waste and providing oyster mushrooms in their catering service. It is a big company located in the Beurskwartier area, having a large number of employees and thus large amounts of coffee waste. EcoSmart is responsible for their coffee waste and Sodexo for their catering. There are also companies that could be influencing this process, but do not feel the need to participate at this moment. The quadrant of these companies is named ‘meet their needs’, and it focuses on the partners that could contribute in the case with their knowledge, resources etc., but only if there is something extra in it for them. At the moment, they don’t have the need to collaborate. Rabobank, for instance, has a lot of coffee waste because of the company’s size and they already have a network with waste collection companies. Rabobank contracted Selecta and Eurest and therefore has a lot of influence on the policy of both companies when it is relevant to their building. However, there is a need to take a look at this possible collaboration further, as the Rabobank is not a key player yet. In addition, the possibilities for GRO to participate in the concept of growing mushrooms from the coffee waste is really low at this moment. However, the fact that they collaborate with Eurest and Albron increases the need for its involvement. To conclude, they have a lot of influence, but not enough motivation to be included. The quadrant of ‘show consideration’ includes the Fungi Factory and USI. Fungi Factory, as a mushroom grower and developing business, wants to be part of the network of reusing coffee waste, providing their knowledge in terms of the production process. However, they are less powerful in processing the estimated amount of coffee waste into mushrooms on a large scale. USI has some interest, but with not so much influence in this case. The last quadrant of figure 2.3, the ‘least important’, includes the partners that at this moment did not see the possibility to be involved in the project and do not influence its feasibility. For instance, companies such as SUEZ gave important information for this research, but are not contacted for further collaboration as they might do not pick up waste at companies in the Beurskwartier. Therefore, they are placed in this quadrant. As can be seen in the figure, there are more companies that are not so willing to be involved in this business case at this moment, such as Starbucks coffee company.
Interest in different areas Table 2.2. is created in order to make a clear overview, in terms of the companies that are included in the shortlist (figure 2.3), and to show the degree of their interest in different areas. It is a conclusion that results from the interpretation of the interviews and the classification is an estimation based on common sense.
Table 2.2 Illustration of the areas of interest of stakeholder groups, according to the stakeholders that are included in the stakeholders’ shortlist.
Five areas of interest are presented, namely general interest, finance, environment, society, and reputation. A symbol -blue star- is used to indicate on a scale of one to three stars the degree of their interest. One star means low interest, three stars is the highest interest. The possibility of ‘no interest’ is included as well describing the unwillingness for participation at this moment in time by showing no stars. It needs to be mentioned that there are differences between the specific parties within stakeholder groups, but no distinction is made in table 2.2. The category ‘general interest’ is placed in the first column, describing to what extent each stakeholder group wants to be involved in this business case of growing oyster mushrooms on coffee waste in general. Mushroom growers, such as Fungi Factory, are the most interested (three stars), followed by mushroom buyers. Subsequently, coffee waste providers are motivated by this sustainable idea because they want to exploit the huge amount of coffee waste that is produced on daily basis. More specific, on the one hand, municipality of Utrecht, JDE and Volksbank have shown high interest for collaboration but on the other hand, Starbucks and Rabobank are not willing to be involved in this case at the current situation. For this reason, coffee waste providers have middle interest (two stars). Additionally, mushroom buyers show middle interest due to the fact that, Albron and Eurest, are enthusiastic on this sustainable idea, in comparison with Sodexo and GRO that are not because they already use their coffee waste for mushroom production. Facilitator companies have middle interest as well, because there are companies that are really interested and some of them are not at this moment. The rest of the stakeholder groups, which are investors and waste collection companies, have on average the lowest general interest (one star). It is generally accepted that every business puts effort in the financial part because money and making profit are the driving forces of most businesses. However, the degree of importance for each company differs. Investors are considered to have high interest in the financial part as they are investing to kickstart the business. The stakeholder groups of coffee waste providers, mushroom buyers and facilitators have a middle interest (two stars) in the finance area, because Albron, Eurest and JDE, as big companies, are more motivated by the finance than the municipality that is motivated more by other areas. (Coffee) waste collection companies, such as Selecta and EcoSmart are not so motivated by the financial part because their profits may not significantly differ after their involvement in the network. The mushroom buyers, Albron, Eurest and individual entrepreneurs that are interested in this business case. As it is mentioned earlier, Eurest and Albron companies put effort on the financial part, but small entrepreneurs focus more on other aspects.
Mushroom growers are the most motivated group (three stars) in terms of the environment and the society, willing to cooperate in order to enhance the idea of sustainability and circular economy through the reuse of coffee waste and the production of oyster mushrooms. For instance, Fungi factory created based on the idea of making a more sustainable world, taking advantage of the coffee waste, on a local scale. Stakeholders such as coffee waste providers, mushroom buyers and facilitators have less ideological motives (one and two stars, respectively) to join such collaboration. More specific, Albron, as it is mentioned earlier, reuses the coffee waste they produce and cultivate oyster mushrooms on it, as they want to enhance sustainability. Both JDE and Eurest are also triggered by the idea of sustainability. Sodexo has some interest in the environment, but they will not be involved in the specific case as their interest in other categories is quite low. Starbucks company adapts a more sustainable image, providing small bags of coffee grounds to their clients, but not strong enough to be involved in this specific case. The stakeholdersâ€™ reputation is the fifth area of interest and is important for almost all the stakeholder groups. The companies take reputation into consideration, as they want to improve the business image by acquiring a greener and more sustainable character. For this reason, investors, coffee waste providers, mushroom buyers and facilitators are rated with two stars -middle interest. For the mushroom growers and waste collection companies, the goal of a more sustainable image is not one of the main priorities.
2.3 Recommendations There are several recommendations related to further network development. Firstly, the business should be started by including the key player companies that are mentioned in the shortlist (figure 2.3). They are expected to be the most interested partners and the most powerful compared to the other stakeholders involved. More specific, these are the municipality, Albron, Eurest, Selecta, JDE, Volksbank and EcoSmart. Furthermore, it is recommended to continue the collaborations with the Fungi Factory and USI, and to try to attract the companies that could have a big influence on this business, such as Rabobank. Additionally, entrepreneurs that are interested should be contacted. The stakeholder longlist (table 2.1) can be used to approach other organisations that were not contacted yet and could be interested somehow, to play a role in this project as well.
3 Market analysis De marktanalyse voor een potentieel bedrijf dat oesterzwammen op koffiedik teelt wordt gedaan aan de hand van het ‘Five Forces model’ van Porter. Vijf krachten spelen een rol in dit model en helpen de competitieve positie van een eventueel bedrijf te analyseren. De eerste kracht gaat over de kopers. De markt voor het telen van oesterzwammen op koffiedik is in ontwikkeling, het aantal klanten is laag en de prijzen van oesterzwammen van verschillende bedrijven zijn vergelijkbaar. Daarnaast beïnvloedt de grootte van de bestellingen van de kopers hun macht en zijn de waargenomen verschillen tussen de producten van verschillende oesterzwambedrijven klein. Dit alles zorgt ervoor dat de macht van de kopers relatief laag is. De tweede kracht gaat over leveranciers, waarin blijkt dat een potentieel bedrijf niet afhankelijk zou zijn van bepaalde leveranciers. Ook zijn er genoeg koffiedik en andere materialen beschikbaar. Beide factoren zorgen ervoor dat de macht van de leveranciers laag is. Als derde kracht komen de substituten aan bod, omdat oesterzwammen gesubstitueerd kunnen worden door andere paddenstoelen, vleesvervangers en/of vlees. Daarentegen vallen oesterzwammen die geteeld zijn op koffiedik op door hun uniekheid. Dit maakt substituten tot een relatief lage bedreiging voor de producten van een bedrijf als dit. De vierde focust zich op nieuwe toetreders tot de markt. In deze markt kost het veel tijd en geld voor nieuwe bedrijven om de markt te betreden, maar is kennis makkelijk te vergaren. Er is sprake van schaalvoordelen voor grote bedrijven en bestaande bedrijven hebben een netwerk en daarbij ook al gewerkt aan hun reputatie. Hieruit kan geconcludeerd worden dat nieuwe toetreders een middelmatige bedreiging zijn. De laatste kracht omvat competitie, maar de oesterzwammenindustrie is in dit geval niet heel competitief. Dit komt omdat er momenteel weinig van zulk soort bedrijven bestaan in het Beurskwartier en de rivaliteit is laag, maar er wordt verwacht dat de competitie stijgt komende jaren. De toegevoegde kracht die over beleid gaat is nog onzeker omdat er nog weinig beleid bestaat in deze specifieke industrie. Er kan beleid komen wat nuttig kan zijn, zoals subsidies, algemene support en certificaten of keurmerken. Echter kan er ook beleid komen wat de industrie zou kunnen tegenwerken, zoals beleid over organische certificering. Al met al kan geconcludeerd worden dat deze industrie aantrekkelijk is om een bedrijf op te zetten, omdat het aan de eisen van een aantrekkelijke industrie voldoet: weinig competitie, hoge toetredingsbarrières, weinig substituten en weinig macht van leveranciers en kopers. There are many markets for all kinds of products and services, there is also a separate market for oyster mushrooms grown on coffee waste. Each and every market has its own characteristics, which can be described with different models. It is important to get to know a market to be able to operate on that market, because having information creates a competitive advantage by giving organisations new ways to outperform their competitors (Porter & Millar, 1985). Michael Porter has developed a model to help gaining more insight, in which he describes five forces as a framework for competitive industry analysis (Schermerhorn, 2011). According to Schermerhorn (2011), an understanding of these forces can help managers make strategic choices that best position a firm within its industry. The Five Forces model of Porter will be used in this chapter to analyse the competitive position of the proposed business on growing oyster mushrooms on coffee waste in Utrecht. In the mentioned model the threat of new entrants, the power of buyers and suppliers, the threat of substitute products, the current competitors and policies are discussed. Originally, policies were not a subject of Porter’s Five Forces model, but Gold (2008) added this characteristic to the model in a study on shiitake mushrooms. It is useful to also look into this, because it can positively stimulate a business and nowadays regulations, certificates and funds can play a big role in doing business. The aforementioned potential strengths and weaknesses together determine the potential of the business. This means, that the lower the weaknesses and the threats and the higher the strengths, the higher the potential of the business is. In this chapter, the forces will be explained one by one and applied on this business. In figure 3.1, a summary of this market analysis using Porter’s Five Forces model is given. In this case, the industry is the one where they grow mushrooms on coffee waste, which is situated in the area of the Beurskwartier Utrecht. There are already some players active in this market, such as Albron, Fungi Factory, GRO and several restaurants. Albron is a catering company, that has already set up a chain of businesses which are all involved in the circular process of growing oyster mushrooms on coffee waste. Next to that, Fungi Factory is a business which is acting like a middle man through collecting coffee waste, growing oyster mushrooms on it and
selling the harvested oyster mushrooms (back) to the restaurants. GRO is an exception to the others, because they are a sustainable mushroom grower included in the circular business in Utrecht, but they are not situated in Utrecht. All mentioned businesses are potential competitors of a new business case, but they can also be potential co-operators. The success of a new business is dependent on this division. Although there is not a business established yet, the market analysis in this chapter is about the business which can potentially be established. This means, when there is spoken about â€˜this businessâ€™, this a non-existing hypothetical business for which there is a feasibility study executed.
Figure 3.1 Five Forces model applied to the industry of growing mushrooms on coffee waste in the Beurskwartier in Utrecht. Based on Gold (2008).
3.1 Power of current and potential buyers The power of buyers refers to the pressure that consumers can exert on a business to, for example, get lower prices, higher quality, or better service. High power of buyers leads to lower profitability of a business (Porter, 1979; Schermerhorn, 2011). Several characteristics of the market determine the power of buyers (Porter, 1985). The first influencing characteristic is the number of customers, which for this case will be relatively low compared to for example supermarkets. This business can also sell products to other businesses than restaurants, so the suppliers of coffee waste do not necessarily have to be the ones that buy the mushrooms. Catering companies can also purchase the mushrooms, and there can be even thought about the possibility for individual consumers to buy the product. In case the size of the orders of certain buyers is high, their power is high, but otherwise their power is low. When for example a catering company will purchase a high share of the produced mushrooms, this will make the power of the buyers high. Another factor is the perceived difference for buyers. Only a small difference between the oyster mushrooms of different sellers will be detected, the products are undifferentiated. For this reason, the buyers have a relatively high power to switch and to exert power to the business. But as the price for the oyster mushrooms is the same for all competitors, the buyers have little power to go to another seller, most of the businesses set a price of â‚Ź12 a kilogram and stick to that
(Albert Heijn (n.d.), Jan Linders (n.d.) & Fungi Factory (P.C., September 29, 2017)). So, as long as the price of the mushrooms of this business will be comparable to other sellers, the buyerâ€™s power will be low. In that case, the buyers have the ability to substitute the oyster mushrooms for mushrooms of another player on the market, but the chance that they will do that is low, because the costs of changing and looking for alternatives are relatively high (Pick & Eisend, 2014). This is because potential buyers are probably people who value the ideas of a circular economy, which means the potential buyers have to put effort in searching for another place which also works from the vision of a circular economy. The power of buyers for this business is relatively low, this can also be seen in figure 3.1. In case the suppliers of coffee waste also purchase the oyster mushrooms, their power is higher, but as a wide range of buyers is expected their power will be limited.
3.2 Power of current and potential suppliers The power of suppliers is seen as the ability of resource suppliers to influence the price that one has to pay for their products (Schermerhorn, 2011). Suppliers needed for the process of growing mushrooms are amongst others suppliers of coffee waste and spawn. Of course, also all the equipment for growing the mushrooms needs to be supplied. As multiple suppliers can supply materials as chalk and heaters, the power of these suppliers will be low. For coffee waste, the business is also not dependent on single suppliers, as many companies and restaurants produce coffee waste and want to get rid of it (Fungi Factory, P.C., September 29, 2017; Albron, P.C., October 5, 2017; JDE, P.C., October 9, 2017). As long as the suppliers of coffee waste are not providing a large share of the waste that the growing business is using, the power of the supplier will not be high. This means that all materials needed for the process are available on several places, which are easily accessible (Fungi Factory, P.C., September 29, 2017). Although, to get interesting for some bigger suppliers of coffee waste, it is needed that this business can process big amounts of coffee waste and scales up quickly (JDE, P.C. October 9, 2017). In case something has to be purchased at a big company and no other companies sell the product, the power of the supplier is high (Porter, 1985). An example for this case is when a business chooses to use the Mobile Mushroom Units of RotterZwam (Mobile Mushroom Unit, n.d.). RotterZwam is the only supplier of those complete growing units, so the product is unique and this makes RotterZwam powerful. RotterZwam can decide for what price to sell the units, and this business is dependent on them. The power of suppliers will be relatively low when all the materials needed to grow the mushrooms on coffee waste will be purchased separately in comparison to a situation where the whole containers will be purchased fully equipped. In figure 3.1, this is also displayed.
3.3 Threat of substitute products The threat of substitute products depends on the performance of the substitutes, the costs of the substitutes, the propensity of the buyers to switch to another product and the switching costs (Porter, 1985). In this case, substitutes are mainly oyster mushrooms sold by other businesses like supermarkets, but there can also be thought of other mushrooms like white mushrooms, chestnut mushrooms, shiitake, Portobello mushrooms or beech mushrooms. They have approximately the same nutritional value and are used in the same way as oyster mushrooms (Popular Mushroom Varieties, n.d.). Therefore, they can be seen as substitutes. However, oyster mushrooms grown on coffee waste can be seen as more sustainable compared to mushrooms from the supermarket, they have the added value of being more sustainable. Therefore, the substitutability of these oyster mushrooms will be less. The protein content of oyster mushrooms is not comparable to meat, however it is higher than the content in vegetables (Zadrazil, 1988). But even though the protein content of oyster mushrooms is not very high, they are often seen as meat replacer because of the taste and structure (Pathmashini et al., 2009). For this reason, also other meat replacers could be seen as substitution products for oyster mushrooms. There are a lot of possible substitutes available on the market, for example vegetable burgers, vegetable sausages or beans, like chickpeas or lentils. Also, regular meat could be a substitute for oyster mushrooms for some customers. Because there are so many possibilities, the threat of a substitute is relatively high. Because oyster mushrooms have on average a higher price per kilogram compared to other meat replacers, the other products will have a competitive advantage. However, oyster mushrooms
grown on coffee waste are a specific product which will appeal to a specific group of consumers who will value the idea a circular economy. These mushrooms are unique and their market is a niche, and this decreases the threat of substitute products. In case there will be more competitors that produce oyster mushrooms grown on coffee waste, the threat will be higher. However, when this business will perform properly so that their customers are satisfied, their consumers will be loyal and the switching costs will be too high for consumers to buy another product. This means the threat will be predicted as a low one. Figure 3.1 shows the threat of substitute products displayed in the forces model.
3.4 Threat of new entrants The threat of new entrants, which are potential competitors, entering the market is based on the presence or absence of barriers to entry (Schermerhorn, 2011). There can be different barriers to entry, like time and cost of entering, the need of specialist knowledge, economy of scale and technology protection. First of all, there is the factor which includes the time and cost of entry. In case of establishing a business that will grow oyster mushrooms on coffee waste, the time and cost someone or multiple parties have to put in it are relatively high. This is because you have to buy or hire all materials, like a container or building to grow the oyster mushrooms in and spawn. Besides, you have to establish a network of suppliers and buyers, which will cost time. In contrast, the specialist knowledge is reasonably easy to gain, so this is a low barrier for new entrants. A lot of people want to cooperate and give you information, sometimes in return for a favour. There are businesses, for example RotterZwam and WesterZwam, that provide you all information you need to start a business in growing mushrooms on coffee waste by offering a course where you have to pay for. New entrants can thus choose to either invest their money in taking a course at RotterZwam or WesterZwam, and save time, or invest their time and save money by talking with different people or just do trial-and-error to learn the knowledge you need. As long as there are enough buyers, it is relatively easy to scale up and there will be advantages regarding economies of scale. The bigger your business is, the more mushrooms you can grow and the more revenues you will get. This also means that you need more coffee waste and have to collect more coffee waste. When you have an already established business, with a stable harvest and revenue, it is relatively easy and has economies of scale to buy for example an electrical car instead or an electrical bike to collect the coffee waste. If you have an even bigger business, you can even arrange that all coffee waste is coming to you, which definitely has economies of scale. There are also cost advantages for established businesses, because they probably need more materials like silverskin, chalk and bags, which mean they have more chance to arrange some bulk discount or other deal with suppliers. New entrants can probably not arrange this, both because they do not have the network yet and they do not need that much materials. To conclude this, there are economies of scale for established businesses, which makes it more difficult for new entrants and makes the threat of new entrants lower. This accounts also for this business case, because it makes it difficult to enter the market, but it is an advantage for this business if it is established. A last barrier could be the technology protection, but this barrier is not really present in the industry of growing oyster mushrooms on coffee waste. This is because the technology is not really in-depth, it is more about having the right knowledge and then bring it into practice. The technology is not protected by any patents and can be used by everyone who is willing to pay for it. As can be seen in figure 3.1, the threat of new entrants is relatively low because the barriers to entry are relatively high. Some are easier to overcome than others, but the majority makes it difficult for new entrants to become a player in the industry.
3.5 Policies Policies that are influencing the market can have either a positive or a negative influence on the business. Possible funds or subsidies from companies could positively boost a business. Banks like the Rabobank have several funds businesses one can apply for to get money to start a business or to expand it. One example is the Banking for Food fund of the Rabobank that focusses on sustainable production by producing more with less raw materials (Rabobank, n.d.). As there are not a lot of companies in Utrecht right now that grow mushrooms on coffee waste, those funds are
not used to the full potential yet. However, entrepreneurs differ in their opinion about investors. An interested entrepreneur (P.C., September 28, 2017) told for example that staying independent is something that has to be kept in mind, because otherwise the investors have more power than the business itself when the investors have a higher share in the business. Social investors or green funds could be a good alternative for big banks, because they generally have a higher interest and importance to take part in business cases like this one than big ‘prevailing’ banks. Besides money, support from businesses with networks or knowledge could also help. The municipality or the Living Lab could offer their help in this case (Interested entrepreneur, P.C., September 28, 2017). With more knowledge and power, a business would have a higher chance to become a success, and if so the chances are also higher that the business has the influence to inspire others to follow its’ example and act more sustainable. Certificates or quality marks that indicate the sustainability and quality of the product can also have a good impact. This will show consumers and other interested buyers that the product is safe to use and that there are benefits compared to other oyster mushrooms. Examples of those quality marks for other food categories are ‘Beter Leven’ for meat or ‘Fair Trade’ for tropical products, but the quality marks do not exist yet for this kind of products. Moreover, according to Fungi Factory (P.C., September 29, 2017), getting certification for these oyster mushrooms is not possible at all yet, because they are grown on waste. Those possible regulations on for example forbidding businesses to sell products that are grown on waste would have a negative impact. This is also the case when this business would like to sell to big (catering) companies, because then there are a lot of rules you have to adhere to which include for example HACCP (Albron, P.C., October 10, 2017). Overall, it is depending on further developments in the regulations and policies regarding the industry of growing oyster mushrooms on coffee waste what the influence of this factor will be. There cannot be drawn a conclusion right now, because there is not enough information available to make estimated guesses. However, in figure 3.1 a clear overview is given.
3.6 Internal competition The internal or industry competition includes the intensity of rivalry among firms in the industry and the ways they behave competitively toward one another (Schermerhorn, 2011). Again, there are different factors that can decrease or increase the level of internal competition, namely the number of competitors and industry growth, differences in for example quality, customer loyalty, international or local threats, regional or national market concentration, diversity of competitors, product differentiation and brand identity. First of all, the number of competitors influences the intensity of rivalry among firms in this specific oyster mushroom industry. The more competitors there are, the higher the rivalry will be, because the market share per business becomes lower. In the current situation, there are not yet much businesses that are executing a total business plan in the Beurskwartier. However, this number will probably grow because doing business in a circular way is a rising phenomenon. This means that the industry or market will become more saturated when circularity is getting more common. Currently, the number of competitors is still low, so there is only a low level of internal competition. Differences of quality could become clear in an industry if there is for example made use of certificates or quality marks. This is not the case in the current industry where oyster mushrooms are grown on coffee waste, which means perceived quality cannot be measured. Also, customer loyalty is an influential factor for internal competition, because loyal customers will decrease the intensity of rivalry. This is because customers are not easy to convince for your business if they are already buying from another business. Most probably the customer loyalty is high in this industry, because (potential) customers choose consciously for the business which is, in their eyes, doing business from the best (circular) point of view. This fact makes internal competition relatively low. This industry has mostly local threats and a regional market concentration, because different businesses act in different cities. This is because that makes it easier for the businesses to keep their organisation circular and sustainable. Although it reduces for example the transportation costs (Fungi Factory, P.C., September 29, 2017), it also means that the market gets more easily saturated with all close competitors acting in the same geographical market. So those two factors, the current local threats, and the regional market concentration, both increase the level of internal competition.
The last influencing factors, the diversity of competitors, product differentiation and brand identity, are quite the same among the businesses in the industry. This is because they all are growing oyster mushrooms on coffee waste, which overall results in the same story and product and thus a relatively low level of rivalry. Nevertheless, there are some differences in the extra products or services businesses provide. Some businesses are doing this in the form of education, while others sell their knowledge or provide help with the marketing of the circular image of their coffee waste providers. The Fungi Factory does this by setting up an educational program (P.C., September 29, 2017). Therefore, there is some degree of product differentiation, but not in the fact that all these businesses sell basically the same mushrooms. However, an interested entrepreneur (P.C., September 29, 2017) stated that others that produce the same product should be seen as people to collaborate with instead of competitors, especially when companies have an ideological motivation. With this he wants to say that even though there is some degree of competition, this should not be seen as a bad thing. This is for example also the case with other kind of companies like the waste collectors, because you can collaborate with them instead of trying to make the same service as they have. Another example of such a collaboration would be a collaboration with a catering company (Albron, P.C., October 5, 2017). In figure 3.1 the middle rectangle shows a summary of the internal competition. The overall intensity or level of internal competitiveness is relatively low in the industry which grows oyster mushrooms on coffee waste at the moment of this project, mainly because there are few competitors yet, the product differentiation is low and there are no big international threats.
3.7 Potential market for mushrooms grown on coffee waste Considering the previous paragraphs there can be concluded that the industry of growing oyster mushrooms on coffee waste is an attractive one. This is because it fulfils the requirements of an attractive industry, which consist out of few competitors, high barriers to entry, few substitute products, low power of suppliers, and low power of customers (Schermerhorn, 2011). However, high barriers to entry can also be a disadvantage for this business, which is still a non-existing hypothetical one. Unfortunately, there is no or only little policy for this industry and it is hard to tell how this affects the market. Figure 3.1 shows the whole summary for this chapter.
3.8 Recommendations The market analysis led to several insights, that resulted in the following recommendations. To be a powerful and strong business, buyers of oyster mushrooms should not buy orders of too big sizes, because it is better to have several buyers to not be too dependent on them as sellers. The same applies to the suppliers of the materials; in order to stay independent there should always be a plan B for buying the things you need somewhere. As stated earlier, RotterZwam sells fully equipped containers. However, to be less dependent it might be better for this business to design containers itself. Like that, the business will still be dependent on several suppliers, but to a lesser extent. It is recommended to sell the oyster mushrooms to the same company as the waste is taken from, also because of the point of view of a circular economy, but again independence is important to keep in mind. So, when there is only one provider of coffee waste and that company also purchases the mushrooms, one should be aware of the power of this supplier and buyer. Another thing that is recommended is to use approximately the same price as the rest of the oyster mushroom market to make sure that buyers do not switch to another seller because of the price. However, because the margin on oyster mushrooms is not that big, it is also recommended to earn money with something related to the growing, such as education or paid advertisements in all kind of ways. Like this, the brand identity of the business will also be different from other businesses that sell oyster mushrooms grown on coffee waste, so there will be some kind of differentiation. Some other recommendations would be to frame the product as a niche market product, to scale up to get economies of scale and to apply for funds. A last recommendation is not to see competition as something bad, because collaboration can help a lot in establishing a business like this.
Environmental analysis Utrecht wil groener worden door voedselafval te recyclen, waarvan koffiedik een goed voorbeeld is. Tegenwoordig wordt het afval verbrand of gestort, opties die niet duurzaam zijn. Volgens de ladder van Moermans is het beter om afval te converteren naar een eetbaar product zoals oesterzwammen. Bij het telen van oesterzwammen op koffiedik kunnen de compost- en sterilisatiefase die wel noodzakelijk zijn in de reguliere teelt op stro, worden overgeslagen. Dit resulteert in een besparing van electriciteits- en waterkosten. Hierdoor kan de negatieve impact op het milieu worden verkleind. Daarnaast kunnen zonnepanelen worden gebruikt om de apparaten zoals de luchtbevochtiger en de kachel van energie te voorzien. Het water dat gebruikt wordt om de ruimtes warm te maken, kan gerecycled worden voor de luchtbevochtigers. Een vergelijking van de reguliere manier van paddenstoelen telen en de voorgestelde manier is weergegeven in tabel 4.1. De extra uitstoot van het importeren van de oesterzwammen kunnen worden voorkomen door ze lokaal te produceren. Daarnaast kunnen milieuvoordelen worden behaald door een verminderde uitstoot van methaan en kooldioxide, geen as door verbranding van koffiedik en minder transport als de oesterzwammen lokaal worden geteeld op koffiedik dat lokaal is verkregen. Koffiedik zou ook als compost kunnen dienen, maar hier is al voldoende van beschikbaar. Het overgebleven substraat van de teelt kan ook nog worden gebruikt als compost en is daar, doordat het rijk is aan koolstof en fosfaat, erg geschikt voor. In tabel 4.2 wordt een vergelijking gemaakt tussen deze manier van oesterzwammen telen en de gangbare manier. Ten slotte is het belangrijk om op een efficiënte manier om te gaan met het afval dat overblijft na de teelt van de oesterzwammen. De opties hiervoor staan samengevat in figuur 4.3. The city of Utrecht wants to become greener by recycling their food waste (Utrecht Sustainability Institute, 2017; Healthy Living advisor, P.C., 27 September 2017) and the municipality wants to stimulate this idea. The amount of coffee waste at the Beurskwartier in Utrecht constitutes a very important part of the food waste. Hence, it is becoming increasingly important to think of some alternatives of dealing with the coffee waste so that the waste turns into a valuable material and the carbon footprint can be reduced. According to Moerman’s ladder, it is stated that ‘the use of biological material for food is preferred over the use of biological material as industry feedstock or for energy generation’. According to Moerman, it is preferable to convert the food waste into some food product through processing or reprocessing (Korse, 2016). Figure 4.1 refers to Moerman's ladder, showing the food waste hierarchy. It is shown what is done with the waste now and the technique that we will adopt in this business case. According to the waste collection company SUEZ, the natural resources are becoming scarcer and it is time to start thinking more wisely about the way it is dealt with (P.C., October 5, 2017). Thus, there is a need to understand and analyse the environmental benefits of growing mushrooms on coffee waste.
Figure 4.1 Moermanâ€™s ladder, a food waste hierarchy. Adapted from: Korse, 2016.
4.1 Environmental analysis of the growth phases The idea of growing mushrooms out of spent coffee waste is environmentally sustainable as at the end it will reduce the amount of food waste and will produce an edible and valuable material out of it. The mushroom growth takes place in several stages and it requires a number of optimal conditions like humidity, light, and temperature. Thus, the goal is to reduce the environmental impact of each stage compared to the large-scale mushroom growing industry. The primary action for growing industrially grown mushrooms is composting of the substrates, but the oyster mushroom growing on the coffee waste can be mixed with the substrate without an elaborate composting stage. The substrate is mixed with the spawn and then hung in separate plastic bags (Fungi Factory P.C., September 8, 2017). The mushroom is grown in the bags for several reasons as it prevents contamination of the substrate with the outside air and also the mushrooms grows much faster when the level of CO2 is much higher in the bag. The CO2 being trapped in the bag increases while composting and thus the mushrooms grows much faster. A much higher amount of CO2 is utilised for the industrial composting stage of white mushrooms as it tends to use a lot of energy for the machinery which is used for turning/ aerating the raw materials to prepare the compost (Leiva et al., 2016). Out of the whole process the composting process can account for almost 54.72% impact on the environment which can be avoided in the concerned case (Leiva et al., 2016). A very important stage in mushroom growth is that it requires sterilisation of the substrate because otherwise it can lead to contamination (Fungi Factory, P.C., September 8, 2017). However, this step is not necessary for mushrooms growing on spent coffee grounds, as the roasting of coffee beans sterilises it. But, there cannot be a lot of time gap in between the roasting process and the usage of the coffee waste as a substrate as then the beans lose its sterilised property. Also, the hot water in the coffee machines helps in skipping the sterilisation stage. This results in saving a lot of water (almost 30 gallons of water for producing 60 kilogram of mushroom) and electricity required for running the boilers or autoclaves (Balcony Garden Web, 2017; Stamets, 2000). The sterilisation stage has the highest impact on global warming, namely almost 77.76% of CO2 equivalents of the whole mushroom growing process (Leiva et al., 2016). During the fruiting stage, holes are cut in the bag and at this time ventilation is required to balance the level of CO2, but this can be done by keeping the bags in a well-ventilated room
(Tisdale, 2004; Fungi Factory, P.C., September 8, 2017). The temperature and moisture should be regulated as well with the help of heaters and humidifiers. The packaging stage in the industrial scale has a huge impact on the environment because of the machineries used for packaging and the later disposal of the plastic containers or bags (Leiva et al., 2016), which can be avoided with the usage of eco-friendly brown paper bags which causes less pollution. The equipments required in the industrial growing process like ventilators, humidifiers and heaters are mostly run with electric nets but this is not environmentally sustainable because most electricity is still produced by burning fuels. In the proposed design, there are options of running the system on solar panels. However, this option seems more expensive at this initial stage so more alternatives should be considered in the future. The summary of the analysis of the growing stages with a comparison perspective is given in table 4.1. Table 4.1 Comparison chart between the current industrial technique and the proposed way of growing oyster mushrooms.
Current industrial technique of mushroom growing Requires an elaborate composting process with the help of machineries for turning the raw materials to prepare the compost. Responsible for 54.72% environmental impact out of the whole process. Requires sterilisation of the substrate which utilises almost 30 gallons of water for 60 kg of mushroom. A lot of electricity is also needed for the autoclaves and the boilers. Responsible for 77.76% of CO2 equivalents. Requires machinery for packaging.
Proposed way of growing oyster mushrooms Not required for oyster mushrooms grown on coffee waste. The composting process takes place within the bag.
Ventilators, heaters, and humidifiers are mostly run by electric nets. This spends a lot of electricity and water which can have negative environmental impact.
The equipments can be run by solar panels while the heaters can be replaced by hot water pipes fitted in the room. The water can then be used in the humidifiers.
No sterilisation needed because of the roasting process of the coffee beans. The hot water in the coffee machines also sterilises the substrate.
Not needed in the case. The plastic bags can be replaced by brown papers or corn starch bags.
Benefits of proposed technique Saves the emission of the CO2 from the machineries and does not cause the estimated environmental impact. Saves water and electricity and does not cause the estimated environmental impact.
Can save the electricity for packaging and saves the impact of the plastic bags. Saves a lot of electricity and water and the greenhouse gas emissions from the heaters can also be saved.
4.2 Other environmental benefits The environmental analysis of the growth phases of the mushroom gives an estimate on how the environment benefits from the production of the oyster mushrooms. But there are other benefits associated with it that should be included in an environmental analysis as well. There are several
other arguments for adopting this way of growing mushrooms to be more environmental friendly. The points most relevant for this case are discussed below. Most of the oyster mushrooms in the Netherlands are being imported from other countries, like Lithuania, Belgium, Canada, USA (Interested entrepreneur, P.C., September 28, 2017; Wakchaure, 2011). Growing mushrooms on coffee grounds available locally can reduce the environmental impact of transportation to a large extent (Wakchaure, 2011). The mushroom growing companies if located at the centre of the city will have a problem of extra transportation if they have to fetch the straw and wood chips required for producing the substrate as they are most of the times not available within the city limits. But this would not be a problem with coffee waste as it can be collected within the city borders, which can save a lot of greenhouse gases and fuels. When coffee waste is incinerated or sent to landfills it produces greenhouse gases (GHG) like CO2 and methane (a gas having 20-23% more potential as a GHG than CO2) (Espresso Mushroom Company, 2012; Wakchaure, 2011; Matsakas et al., 2017). According to Moerman’s ladder, incineration and landfill are the last things that should be done with the waste. Through incineration a lot of by-products like heat generation, gas emissions and ash are produced, while in case of landfills a lot of methane emissions, waste water and heat are generated. Landfills can also spread pathogens via the air and the water (Milios, 2013; Korse, 2016; Matsakas et al., 2017). It is estimated that per ton of landfilled food waste can produce almost 435 mL CH 4/g as it consists of a higher percentage of volatile compounds (Matsakas et al., 2017). Through incineration 664 kg of CO2/ton released in the environment after producing electricity out of organic waste (EcoSmart, P.C; October 4, 2017). It can also result in the emission of air pollutants like dioxins and POP’S (Persistent Organic Pollutant). The safe disposal of ashes is also an extra step in case of incineration and this also requires extra transportation (Matsakas et al., 2017). It is observed that most of the time the processing facilities are in the outskirts of the city and thus a lot of transportation is needed to reach the site. However, in case of mushrooms grown on coffee waste it can be done locally. Hence, less transport emissions. Presently, the waste collection companies mostly use diesel trucks, some Liquified Natural Gas (LNG) trucks while very few electric vehicles (EcoSmart, P.C., October 4, 2017). The amount of CO2 released by diesel trucks is 411 grams of CO2 per 1.6 km (Office of Transportation and Air Quality, EPA, 2014). The main problem with LNG trucks is the release of methane throughout its fuel cycle which can be worse than the diesel trucks emitting CO2 in the long term. The figure 4.2. shows the current and proposed processing technique of the coffee waste and their respective effects. The figure is based on the Moerman’s ladder and the incineration and the landfilling are being marked as red as both of them are not the preferred options of waste processing according to Moerman. But converting the waste into mushrooms are one of the preferred options and that is the reason of marking it in green.
Figure 4.2 Current and proposed waste processing techniques. Adapted from: Korse, 2016.
The coffee waste at present is being mixed with other organic waste (Healthy Living advisor, P.C., 27 September 2017) and is being turned into compost for agricultural usage. But, the standard is to not use more than 20% of coffee waste in a pile of compost and not following this standard can lead to degraded quality of compost (Milios, 2013). This in turn when applied for agricultural usage can result in non-optimal growth of crops which eventually is a waste as well. Besides, chlorogenic acid in spent coffee grounds can inhibit growth of some crops. In the Netherlands, composting from other organic material is already happening a lot (Commissioner of municipality, P.C., September 8, 2107) and too much composting can lead to the emission of greenhouse gases and strong odours (Cameron, 2016; Matsakas et al., 2017). Thus, the direct utilisation of coffee waste can reduce the burden of over composting and also prevents producing more waste. According to Healthy living advisor and an interested entrepreneur, the more is communicated about how the waste is being dealt with, the more people will make conscious decisions about their waste. The ways of communication can be improved by showing how the wastes are being divided and collected. It was suggested by an interested entrepreneur, to advertise the concept of growing mushrooms on coffee waste in full public view. This, indirectly will lead to more conscious decisions from the societyâ€™s side towards the environment (Healthy Living advisor, P.C., 27 September 2017; Interested entrepreneur, P.C., September 28, 2017). The summary of the analysis of the environmental benefits with a comparison perspective is given in table 4.2.
Figure 4.2 Current and proposed waste processing techniques. Adapted from: Korse, 2016.
Proposed alternative ways
Production of mushrooms
Growing on spent coffee grounds can be done locally.
Most of the oyster mushrooms in the Netherlands are being imported from other countries, like Lithuania, Belgium, Canada, USA Mixed with other waste to produce compost. The compost is used for agricultural purposes but some plants do not grow properly on this compost. Hence, this can result in more waste. Also, already there is a lot of composting happening which can emit greenhouse gases. Sometimes the way the waste is collected from the buildings is not that well communicated with the public. Also, what is being done with the waste after separation is not communicated.
Benefits of proposed alternative ways Saves transportation emissions.
Now the coffee waste is being turned into oyster mushroom without producing compost out of it initially but later the mushroom waste can be treated as a good compost.
Saves emission of greenhouse gases and extra wastage.
The waste will be now segregated in a proper way and the fact that oyster mushrooms are grown on the coffee waste will be advertised in full public view.
This helps in evoking public consciousness about handling of wastes in a proper way.
4.3 Alternative ways of dealing with the mushroom waste The waste left after growing oyster mushrooms should be dealt with in a more efficient way which can be economically and environmentally viable. The waste can be used as cattle feed which cannot be directly done from coffee waste because of the low pH and the presence of toxic compounds. However, after the growth of the mushrooms it is suitable to be treated as animal feed (Rathinavelu & Graziosi, 2005; Fan et al; 2006). By adding some commercial silage additives in the mushroom waste and packing it into plastic liners within Flexible Intermediate Bulk Containers (FIBCs), a type of recycling container, the product is ready to be used as feed (Rathinavelu & Graziosi, 2005). The waste can also be used as a fertiliser as it is quite high in carbon and phosphate which is a better soil conditioner and fertiliser than most common fertilisers (Owaid et al., 2017; Circular Economy Quarter maker of municipality, P.C., September 8, 2017). The spent mushroom substrate can also be spread on newly seeded lawns as the material can protect the seeds from birds and at the same time has a really good water holding capacity (Matsakas et al., 2017). The substrate can be sold as a potting material in small pots for household gardening purposes. The compost consists of degraded lignocellulosic components which when mixed with animal dung can release a good quality of biogas. If the biogas is being produced near the mushroom factory with a technique ‘combined heat and power’ or ‘cogeneration’ (Matsakas et al., 2017), then it can help in generating electricity for running the equipment in the factory. Thus, in this way extra electricity is not required, reducing the environmental costs and also there is also no need of transporting the waste to some other area (Chang & Wasser, 2017). The fuel pellets made out of the mushroom waste can also replace that of the wood pellets required for burning which are mostly imported (Aurora Sustainability Ltd, n.d.). The compost can be used for the growth of vegetables in the own kitchen gardens of the mushroom growing companies and they can sell it in
the market and increase revenues. The non-sterilised mushroom compost helps in controlling plant pathogens like Lecanicillium fungicola (Riahi, 2012). The water from spent mushroom compost fermented for 7 days can be sprayed on apple trees and potato crops affected with scab disease and late blight respectively and this can help in reducing the infestation (Yohalem, 1996). Some companies in the Netherlands sell their mushroom substrate to the tulip gardens (Inside Flows, n.d.). Thus, in the process of growing mushrooms the waste can be turned into something valuable and even the by-products are not waste. In figure 4.3, a summary of those alternatives is given.
Figure 4.3 Alternative ways of dealing with the spent mushroom waste.
4.4 Recommendations The fact that this method of growing mushrooms is environmental friendly can be argued for by taking a number of aspects under consideration. However, there is still room for improving a lot in this sector. The recommendations that are most important in this context are mentioned in the following text. Solar panels should be considered for generating the electricity needed for the process as it is a renewable energy source. According to an interested entrepreneur, it would be good for the environment to use electric vehicles and heat pumps (P.C., September 28, 2017). Another way of saving a lot of transportation is to collaborate with the present waste collectors so that there is no extra emission and usage of fuels (Interested entrepreneur, P.C., September 28, 2017). It is also not quite efficient to have a separate collection and transportation system for the coffee waste, it could be collected along with other waste by just having a separate compartment (Interested entrepreneur, P.C., September 28, 2017; EcoSmart, P.C., October 4, 2017). The vehicles run on LNG should be checked for its engine efficiency so that the overall release of methane can be reduced. Also, the usage of diesel trucks is not recommended for urban areas as the release of methane increases when the engine cools and restarted and also while accelerating which is done very frequently in busy urban roads (Camuzeaux et al., 2015). It is also recommended that the room can be heated with the help of heated water running through pipes fitted in the room. This water can then be utilised in the humidifiers to maintain the
moisture level in the room. This can prevent from using extra electricity and also there is no wastage of the water. The upscaling of the mushroom growing should preferably be in such a way that it stays local but at the same time has the potential of having significant impact in the market and society (Interested entrepreneur, P.C., September 28, 2017). Keeping it local will help in achieving a much greener business. The plastic bags used for growing the mushrooms can create pollution as well. According to the Fungi Factory, Utrecht University is doing research in alternatives to change the usage of plastic bags (Fungi Factory, P.C., September 29, 2017). An alternative for plastic bags can also be bags made out of corn starch (Aurora Sustainability Ltd, n.d.)
5 Technical and financial design Uit een zoekopdracht bij Makelpunt zijn vijf verschillende mogelijke locaties naar voren gekomen. Skatepark ‘De Yard’ blijkt het meest veelbelovend vanwege de nabijheid bij het Beurskwartier. Containers zijn gekozen als groeilocatie vanwege goede mogelijkheden voor controle van de groeiomstandigheden, zoals temperatuur en luchtvochtigheid. Om de steriliteit van het substraat te waarborgen zijn plastic zakken gekozen om de oesterzwammen in te laten groeien. Uit de mogelijke koffiedikleveranciers die geïnterviewd zou een totaal van 273 kilo koffiedik verzameld kunnen worden. Met een basisopstelling van zes containers kan 128 kilo aan koffiedik per dag omgezet worden in 27 kilo aan oesterzwammen per dag. Deze zes containers bestaan uit één container met gevulde zakken substraat in de groeifase, vier containers met zakken substraat in de fase van vruchtvorming en één container voor het opslaan van de ingrediënten en het mixen in groeizakken. Er zijn twee mogelijke opties voor de energievoorziening uitgewerkt, één met zonnepanelen en één met netstroom. De investeringen, terugverdientijd, maandelijkse uitgaven, inkomsten en winst voor een basisopstelling zijn gegeven tabel 5.1 en tabel 5.2. Met een grotere hoeveelheid koffiedik is het eenvoudig om op te schalen.
As the background information, the stakeholder analysis, the environmental analysis, and the market analysis are being presented, it is now important to give an overview of the technical and the financial part of this case. It is necessary to find a location that fits the needed growth conditions, the amount of coffee waste that could be collected, the capacity needed to process the coffee, the transportation implied in the process and the capacity of possible ways to sell the mushrooms. Based on the possible capacity of the process and the chosen location, the design of the facilities and the specific calculations based on the inputs of the process are needed to come up with the outputs for getting a complete overview for the financial study.
5.1 Technical design Location The process of growing mushrooms on coffee waste on a local scale involves some requirements when choosing a location. First of all, it is important to adapt the facilities to the conditions needed at every stage of the process or choosing a place which meets these conditions itself. The second thing to consider is the amount of space needed for the process. Another important point to pay attention to is the distance from the location to the coffee waste collection points. For this step, the environmental impact and transportation costs involved may be studied. Based on the requirements mentioned above and in order to make the project more sustainable than the traditional growing process, a suitable place to carry out the process would be a location as close as possible to the Beurskwartier. Using mobile containers instead of buying or renting an industrial building would decrease the costs and add flexibility. A search of the different possible areas available was carried out via Makelpunt.nl. There are several possible locations in the outskirts of the city such as De Moestuin, Metaalkathedraal, the Park Transwijk and one place located in the Beurskwartier called De Yard (see figure 5.1) and one location in Fort de Klop which is was not considered and it is not shown in the map due to the long distance to the Beurskwartier.
Figure 5.1 Possible locations to place the containers. Google Earth – Google Earth. (n.d.).
Since the locality inside the Beurskwartier is preferred for transportation reasons, the most suitable place is the area in the Beurskwartier, `De Yard´. This area belongs to the NS train station and has been freely loaned as a recreation park for skating since July 2013. ‘De Yard’ is located 1 kilometre from the municipality of Utrecht and it is next to the Rabobank (see figure 5.2).
Figure 5.2 Location of ‘De Yard’. Google Earth – Google Earth. (n.d.)
There could be plenty space for placing the containers while still leaving space for the skaters who currently use the place. It could lead to a new image and a more efficient use of ‘De Yard’, since the location seemed mostly unused (figure 5.3).
Figure 5.3 `De Yard´, Utrecht. Taken by ACT group. September 29, 2017
In order to find out the availability of this location, it would be convenient to contact both, the NS company and ‘De Yard’ (De Yard, n.d.). In case the location is not available for this purpose, an alternative would be to choose one of the locations found in Makelpunt, in the edges of the city or to try to find some abandoned or useless places provided by private or public facilitators. Even spots on parking lots close to the centre could be a possibility.
Containers Oyster mushrooms have two growth phases, one is called the growing phase and the other one the fruiting phase. The growing phase lasts almost two to a maximum of three weeks and needs dark conditions. In this phase, the mycelium colonises the substrate entirely. After this, the fruiting period starts. In this stage, the fungus starts to produce fruiting bodies. In both stages, strict temperature and humidity control is needed (Manachère, 1980) For this reason, several entrepreneurs find old sea containers good places to grow these mushrooms in (Fungi Factory, P.C., September 29, 2017). The temperature and moisture are easy to regulate in closed and well insulated containers. In those containers, plastic bags are often preferred in small scale growing over growing in beds because of the ease of contamination prevention of sealed plastic bags (Yang et., 2013). Since the temperature and moisture control are quite costly, as much as possible mushroom growing bags should be placed in a high-volume container. The highest volume of sea container has the following dimensions; (12m*2.35m*2.35m). Thus, in this way the available resources are used to their full potential. The bag sizes that will be used are similar to the average size (5L) used for different mushrooms grower (Fungi Factory, P.C., 29 September 2017).
Growing containers For growing, the containers must be dark and around room temperature (Furan et al., 1997; Zervakis et al., 2001). In this stage the bags can be really close to each other. The only thing needed is a heater to keep the temperature around 21ºC. The bags during the growing phase are placed on shelves to save space. The interior of a growing container is designed so that 960 bags of 2.5 kg fit in there. This growing container has a capacity of 640 kg of coffee grounds a week, with the right amount of fruiting containers this has the capacity to produce 134 kg of oyster mushrooms a week. The calculations supporting this design are given in Appendix C.1.
Fruiting containers In fruiting containers, the bags need light, a lower temperature (between 10ºC and 15ºC), a humidity of around 90 percent (Manachère,1980) and a bit more space, because the mushrooms come out of the bags and need some space to grow. In the fruiting stage the bags will be hung in order to have more space. For the fruiting containers an amount of 368 bags was calculated
because of the space needed for the growing of the mushrooms and for the humidifiers. For the calculations supporting these numbers see Appendix C.1.
Final design Since the growing period is maximum three weeks and the fruiting maximum four weeks (Zadrazil, 1997), the in and out flux of bags in a growing container is 960 bags/3weeks = 320 bags/week. For fruiting containers this is 368 bags/4 weeks= 92 bags/week. Thus, for each growing container four (320/92=3.5 somewhat equal 4) fruiting containers are needed. Furthermore, a mixing and storage container is needed to mix the ingredients in a bag and to store the ingredients and the full-grown oyster mushrooms. So, a basic mushroom growing kit following our design consists out of 6 containers; 1 growing container, 4 fruiting containers and one mixing and storage container. scaling up can thus be done by doubling or tripling the number of containers used. The energy needs can either be met with solar panels or with electricity from the net. However, in some temporary locations like ‘De Yard’, the electricity from the net might not be available as the electricity providers might not be interested to provide connections to a place for temporary usage. The whole setup would be much more mobile if the electricity and water comes from solar panels and rainwater catchment respectively. The electricity needs and the design for the electricity and water supply are given in Appendix C.2. Also for sustainability reasons the solar panels are preferred over net electricity. However, the energy needs of the current design are very high and the investment cost for a solar system are very high so in this case it is advisable to look at other more energy efficient ways of providing temperature and humidity control in the containers. Also other energy sources should be investigated more before an option is chosen. The financial comparison and the payback time of the solar panels are given in Appendix D.1 and D.2.
Transportation Decisions on the type of transportation are crucial since the logistics play an important environmental and economic role. The most ideal transportation method and also the most environmental friendly solution is using an electric vehicle such as a bike or a small electric truck with a carriage. Choosing the one or the other depends on the scale of the process, the investment capacity, and the prospects on future extension in a short term. It is expected that an electric truck would fit better for this purpose. One possibility is to buy a truck with dimensions of 3400*1300*1740 mm with a carriage length of 2200 mm. The truck has an autonomy of 140 to 180 kilometres and an estimated energy costs of €0.85 per 100 kilometres. It could be loaded with around 70 to 80 buckets with an assumed capacity of 8 to 10 kg each, so a maximum coffee waste load of 800 kg each time. This capacity is big enough to collect the total amount of coffee waste provided and leaves space for a future extension. The process will be collecting coffee waste every day from the collection points and bring it to the containers. The transportation is going to be bidirectional, this means that the truck leaves every day from the location with mushrooms to be delivered to the possible buyers and comes back with the coffee waste to start a new growing cycle. The idea is trying to reduce time and travel distances by making it as efficient as possible. The estimation of the transportation duration would be around two hours per day with two employees. It is also possible to collect coffee waste three days a week to decrease the transportation time. However, based on the previous estimations, the reduction would not be really high. When it is collected every day, it is not needed to keep the waste in a freezer to store it and also the oyster mushrooms could be delivered fresh every day. Right now, the cleaning staff collects the coffee waste daily from every building and places it in the basement of the building together with the organic waste (Healthy Living advisor, P.C., 27 September 2017; Selecta, P.C., 29 September 2017). Truck drivers can collect it directly from the basement of every collection point, where the truck has an easy access. It is estimated that Rabobank could provide 189 kg per day of coffee waste. They have 126 coffee beans machines. Each machine can provide about 100 cups of coffee per day and each cup contains in average, 15 g of coffee waste (Selecta, P.C., 29 September 2017). Albron estimated that the circular pavilion could provide 19.5kg of coffee waste per day (Albron, P.C., 5 October 2017). For the municipality building only 9 kg per day of usable coffee waste is estimated because of the low amounts of bean machines (Healthy Living advisor, P.C., 27 September 2017). The
Volksbank estimated that they produce 55.5kg of coffee waste every day (Volksbank, P.C., 17 October 2017). So, the total amount which could be collected from these possible partners is 273 kg. The proposed amount of coffee waste collected a day is estimated in chapter 5.2 based on the initial process design.
5.2 Financial design Profit, costs, and revenues A financial model has been made based on the proposed design for the growing containers, the lengths of the growing seasons, some assumptions about the needed working hours, the ratios of the different inputs (Fungi Factory, P.C., 29 September 2017) and in- and output prices derived from different sources. The input prices were chosen after a short scanning of the relevant websites which are able to deliver the necessary goods. The exact numbers of the product inputs cannot be stated here because of confidentiality of some of the sources, however, the outcome of this model can be presented. Choices have to be made on how to make money out of this chain. There is chosen to sell the mushrooms but also charge for picking up the waste. This can be done because of the large scale of companies with which collaboration is sought. Large companies always pay for their garbage to be picked up, so this business can make use of this as a possible income source. Also, small mushroom kits can be sold as another additional income source. The mycelium after it has given one or two flushes of mushrooms can be a really good source for compost so also selling this might be a possible income source.
Figure 5.4 Summary of material flows in the proposed business.
Based on the design with one growing container and the corresponding four fruiting containers and mixing and storage container, 640 kg (wet weight) of coffee-grounds could be handled a week, so 128 kg a day considering five working days a week. In total €134 (0.21€/kg) could be charged for picking up this coffee waste which is the same as the price most companies pay to get rid of it as organic waste now (Gemeente Maastricht, 2014). The model predicts a weekly oyster mushroom yield of 134.4 kg so 27 kg, which could be sold for €1612. 771 kg of restmaterial is left after the production of the oyster mushrooms and as this is very good compost (Matsakas et al., 2017), this could be sold as well for a price of €0.13/kg (Tuinaarde Compost, n.d.). It is expected that a daily drive to one or two companies in the Beurskwartier is needed to pick up the coffee waste when is it still fresh. That would be sufficient to provide the needed amount to produce a daily flow of 27 kg of oyster mushrooms.
The daily collection ride can be done in about two hours. Also 320 mushroom bags have to be filled every week, and the same amount has to be harvested. For the filling 3 hours daily are estimated and for the harvesting an additional 2 hours per day. This makes 7 hours a day for 5 days per week. Other monthly costs are estimated to be €190 for electricity, around €8 for water and €50 for extra materials such as laboratory products for sterilization, buckets, etc. An overview of these costs can be seen in Appendix D.1. When the costs are subtracted from the revenues, a monthly profit of around €3500 (see Appendix D.1). The profit, costs and revenues are summarised in table 5.1 For more details see Appendix D.1. Table 5.1 Costs, revenues, and monthly profit.
Electricity and water supply
Traditional electricity and water supply
Solar panels and rainwater harvesting
Investments and payback time A list of all the needed equipment has been made based on the design of the containers for every stage. The investments have been added in Appendix D.2. There is an optional cost of connecting to the water and electricity network. Another option could be installing a rainwater harvesting system and solar panels. However, the total cost derived from the solar panels is very costly. The needed amount and the costs of the solar panels are estimated by experts from MastersinSolar. The cost of the electricity and water are based on real data from Budget Energy (Budget Energy, n.d.) and Vitens (Vitens, n.d.) tariffs, respectively. The cost of the rainwater harvesting system is estimated by real data from Rainharvesting Systems (Rainharvesting, n.d.). The investment and payback time are summarised in table 5.2 For more details, see Appendix D.2. Table 5.2 Investment and payback time.
Electricity and water supply
Payback time (months)
Traditional electricity and water supply
Solar panels and rainwater harvesting
5.3 Recommendations The calculations for the technical and financial study are based on these first containers and the proposed distribution of them. After carrying out interviews with the possible stakeholders and based on their interests in the project or their willingness to collaborate by proving coffee waste (see figure 2.3), the scale of the project could be upgraded. The upscaling could easily be made by following the design presented in this chapter and the related costs and benefits. It is recommended to start with one growing container, four fruiting containers and one processing and storage container. This way, a good amount of coffee can already be processed and the entrepreneur has the time to look for bigger markets for the oyster mushrooms and stabilise the process. For instance, introducing them in different markets such as selling them to restaurants, local city markets as an ingredient for making bitterballen or other products, etc.
Other ideas to get more benefits from the business case could be, organising workshops, sell mushrooms and kits in sustainable events, offering internships for students, etc. A deeper research about the availability of â€˜De Yardâ€™ area, should be carried out to see if they are open to share their location or if the area will be used for other purposes such as redeveloping the area. It will save a lot of costs if the location is facilitated by a low price or for free. The option of getting energy from solar panels is very costly and it requires a huge investment which leads to a higher payback time. The other possibility studied here is the use of the traditional electricity supply, since the initial investment is not as high as using solar panels and leave the solar panels option for a future upscaling or when more investments are found. However, the traditional method of electricity from the grid might not be the most suitable for temporary sites and other alternatives might be investigated. The rainwater harvesting system is effective and it does not imply a lot more investment than using the traditional water supply as well as it is a more sustainable practice. The bidirectional transportation method is recommended in order to save time and labour costs as well as the idea of selling the compost by being collected in the same location as it is produced.
6 Conclusion and overall recommendations In this last chapter, final conclusions will be drawn and practical recommendations will be given. First of all, general conclusions on this research will be given. After that, an overall impression on the interviews and lastly advice on how to continue this project will be stated. This project is a feasibility study, therefore some of the lessons learned will be emphasised to make clear how this business can actually be started.
6.1 Conclusion Growing oyster mushrooms on coffee waste can be equally productive as growing them on wheat straw like is common in the Netherlands. Using spent coffee grounds has some practical advantages, like the good nutrient composition and the fact that the substrate does not need to be sterilised. On small scale, businesses growing oyster mushrooms on coffee waste already successfully exist. For a larger scale business, the cultivation process will essentially stay the same. Producing mushrooms on coffee waste is a way to convert waste into a valuable edible product. The process saves water and electricity, and also the transportation costs and thus emission is lower because the process stays local. After the use of the coffee waste, the rest waste can still be used for other purposes. When starting this business, there are six groups of stakeholders that need to be considered, namely investors, coffee waste providers, waste collection companies, mushroom growers, mushroom buyers, and facilitators. Companies that can possibly be involved in the network differ in their interest and impact. The industry of growing oyster mushrooms on coffee waste is an attractive one. There are few competitors, high barriers to entry, few substitute products, low powered suppliers, and low powered customers. However, high barriers to entry can also be a disadvantage for this business, which is now still a non-existing hypothetical one that first has to enter the market. For the business, a modular mushroom growing unit of six containers is designed, consisting of one growing container, four fruiting containers and one container for storage. When scaling up, the number of containers should be multiplied while keeping this ratio. A possible location for these containers is the skating park â€˜De Yardâ€™ owned by NS. A feasible business model could be to get revenues from selling mushrooms, selling small mushroom growing kits, charging money to pick up coffee waste and selling compost. If all these income sources are fully utilised a profit of about â‚Ź3500 per month can be made and two people can be employed part time.
6.2 Overall impression With a few exceptions, all companies that have been contacted during the research for this report responded enthusiastic. They were willing to provide information, but they stressed that the initiative should come from the mushroom grower and that he should have something good to offer. In other words, the companies do not need a business like this, but if there is one, they would be interested in a collaboration. Many of the companies that were contacted are already involved in similar green projects, from that it became clear that this business should have an added value and the transition to this new collaboration should be made easy. The business should not only sell a product, but also provide a good image of itself to the partner. As the price of their product will not be lower than the price they pay now, their image is the main way this business can distinguish itself from other businesses. What also became clear is that there are more than enough companies to collaborate with, either to provide waste or to buy mushrooms. However, at some point specific partners have to be chosen and investments have to be made in a good relationship.
6.3 Recommendations Because this project is conducted by students as a consultancy assignment, it is recommended to approach the companies that were already approached during this project with a side note that this was an exploratory research and that it is used as starting point, but that nothing is official yet. The responses to the interviews were quite positive, and no hurdles are expected for further carrying out this project. Next to that, there are some other recommendations regarding this case.
Make use of marketing This project has an appealing story that people can relate to. Many people drink coffee and many people eat mushrooms. This makes this project ideal for a broad audience. If the business is visible, it can inspire the citizens of Utrecht to think about the sustainability of their own behaviour. This can be done by placing the containers in full public view and making them eye catching. The vehicles used to collect the coffee waste and deliver the mushrooms could be attractive as well. Besides, there can be made use of advertisement. Billboards can be placed in the Beurskwartier and the local newspaper and websites can place an article about it. The employees of the companies that are involved in this collaboration can be made aware of that via posters in the office building or a piece in the news mail. The nursery of mushrooms grown on coffee waste can be the image of the whole principle of circular economy and make people enthusiastic.
Approach coffee waste providers When approaching new companies in the Beurskwartier area, it is recommended to come up with a clear idea and business plan. Companies will probably not agree on being involved when the price they will have to pay is higher, even though the product is green. However, it is advised to frame the project as a green project, as the big companies are really sensitive for that. They want to be more sustainable and green, but only when there is something in there for them too.
Approach potential buyers There is plenty of coffee waste available, but the mushrooms also need to be sold. When approaching potential buyers for the oyster mushrooms, there can be either a focus on a broad audience or a narrow focus based on the network of the coffee waste providers. It is recommended to have a broad focus when possible, which would mean that the oyster mushrooms are not only sold back to catering companies serving the food in the place where the coffee waste is received from, but that also restaurants can purchase oyster mushrooms. Another option would be to have a collaboration with the vertical farm that will be realised in the Beurskwartier. They could provide the employees of companies in the Beurskwartier a crate of vegetables once a week, where also the mushrooms could be in. Another possibility of selling the mushrooms to a broader audience is selling the mushrooms on a weekly market in the city centre. For this, the municipality could provide help. However, besides this broad focus the big companies should not be forgotten. When approaching companies, it is recommended to directly involve the catering company as well to find out if there can be a collaboration.
Set up side activities When figuring out how much money this business will make, one thing became clear: it will not be profitable by only selling oyster mushrooms, also side activities are needed. The different companies that are already actively growing mushrooms on coffee waste have chosen different business models to earn money. Education can be a part of that, for example selling specific knowledge on the system to help entrepreneurs or by giving workshops. Besides, merchandise can be sold, such as do it yourself growing kits. Also tours at the location or lectures about the circular economy for companies can be profitable side activities.
Think ahead about the location When mobile containers are used to cultivate the mushrooms, they can be placed at temporary locations. The disadvantage of such temporary locations, is that they can be claimed for other purposes quite suddenly. Therefore, it is important to start thinking about the next location in time. It requires a broad network of partners who can potentially provide a new spot and to keep these contacts warm also during periods that you do not seem to need them.
Find an alternative for using silverskin In this report, it is stated that silverskin will be used to make the substrate less dense. However, using silverskin is only possible if the beans are roasted in Utrecht. When the beans are roasted in the country the beans come from, it would not be sustainable to import them. There are probably only a few places in Utrecht where coffee is roasted, so it is advisable to search for an alternative for silverskin.
Reuse also the waste of the mushroom growth Little attention has been paid in this report to the fact that the growth of oyster mushrooms on coffee waste results in a new rest product, though this is an important aspect of the business as well. After cultivation, what is left of the substrate is colonised with mycelium. Now it is recommended to sell this waste of the mushroom growth as high-quality compost. However, there is limited need of more compost and compost is therefore not very valuable. It will significantly increase the sustainability of the business if another purpose for this waste is found. Luckily, the rest product has a high quality for a lot of different applications that are mentioned in the environmental analysis chapter. It is up to the entrepreneur to choose an option and to involve this in the business.
Create social impact As stated before, by making use of marketing, the citizens of Utrecht can be made more aware of this business. Another way of doing this is organising workshops, promoting the case in sustainable events, offering internships for students, etc. Also, compost can be made available for private use by citizens. Involving the citizens of Utrecht in these activities makes them think about sustainability, which will have a positive effect on the society. Vulnerable citizens can also be involved in the business. This can be done by donating mushrooms to the food bank or by hiring people with a distance to the labour market in the business.
See the broader perspective One can wonder whether processing a part of the coffee waste stream is effective. Of course, the amount of coffee waste that is dealt with in this case is relatively small, but upscaling is possible. Besides, it should be kept in mind that every kilogram counts and that already a considerable amount can be used. In relation to all the coffee waste available in the Beurskwartier or even in Utrecht this would be just a small start, however it will be worth it. Even though the impact on the environment or on the circularity is not directly significant, there is also a large degree of social impact.
Start big enough Try to start with a business of a reasonable scale. If the start is too small, it will be hard to get a lot of attention for it. It is simply easier to make the business visible and taken seriously if it is larger. That will help the business to make an easy start and to continue growing from the beginning.
Just start There are a lot of things that have to be taken into account when starting a business. There are often multiple options to choose from. Every business model has its own advantages and disadvantages. During the making of this report, it became clear that potential partners are more willing to spend time if they got offered a clearer plan of what will be done. However, this plan can only become clearer after there is spoken to partners and the story that will be told to one partner is often dependent on the answers of another partner. The advice is therefore to just start and take the hurdles while running. Do not wait until there is a completely worked out business plan before arranging practical things.
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Stamets P. 2000. Growing Gourmet and Medicinal Mushrooms. 3rd ed. Berkley (CA): Ten Speed Press. SUEZ. (n.d.). Retrieved 2017, September 11, from Suez ready for the resource revolution: http://www.ready-for-the-resource-revolution.com/en/. Tegeldepot.nl. (n.d.). Retrieved October 17, 2017, from https://www.tegeldepot.nl/ Thaler, É. (2012). Oyster Mushroom Cultivation on Coffee: A Unique Opportunity for Urban Agriculture. McGill’s Living Lab. Retrieved from: http://digitool.library.mcgill.ca/webclient/StreamGate?folder_id=0&dvs=1507100096305~647. The Home Depot. (n.d.). Retrieved October 17, 2017, from http://www.homedepot.com/ Tisdale, T. (2004). Cultivation of Oyster Mushrooms (Pleurotus sp.) on wood substrates in Hawaii (Master of Science). University of Hawaii. Tuinaarde Compost. (n.d.). Retrieved, 2017, October 12, from http://www.tuinaardecompost.nl/bemeste-tuinaarde/potgrond Utrecht Centraal. (n.d.) Retrieved 2017, September 20, from: http://cu2030.nl/page/ovterminal. Utrecht Sustainability Institute. (2017). Retrieved 2017, September 12, from: https://www.usi.nl/enGemeente Utrecht. Utrecht University. (2017). Living Lab. [online] Available at: https://www.uu.nl/en/organisation/green-office-utrecht/living-lab [Accessed 6 Oct. 2017]. Verbruggen, John en Wendy. “Paddenstoelen Met Smaak.” Verbruggen Paddestoelen B.V., 2007, www.oesterzwam.nl/home/list?page. Verstand van tuin en dier. (n.d.). Retrieved October 17, 2017, from https://www.welkoop.nl/ Virginia, P. (2017). The world's top coffee consuming nations – and how they take their cup. Retrieved 10 03, 2017, from: http://www.sbs.com.au/yourlanguage/italian/en/article/2017/03/29/worlds-top-coffee-consumingnations-and-how-they-take-their-cup Wakchaure, G. C. (2011). Production and marketing of mushrooms: global and national scenario. Mushrooms: cultivation, marketing and consumption. Directorate of Mushroom Research (Indian Council of Agricultural Research), Chambaghat, Solan, India, 15-22. Welcome to Rainwater Harvesting Limited. (n.d.). Retrieved October 17, 2017, from https://www.rainwaterharvesting.co.uk/ Yang, W., Guo, F., & Wan, Z. (2013). Yield and size of oyster mushroom grown on rice/wheat straw basal substrate supplemented with cotton seed hull. Saudi journal of biological sciences, 20(4), 333-338. Yohalem, D. (1996). The Effect of Water Extracts of Spent Mushroom Compost on Apple Scab in the Field. Phytopathology, 86(9), 914. http://dx.doi.org/10.1094/phyto-86-914 Zadrazil, F. (1988). Nutritive value of mushrooms. Entwicklung und laendlicher Raum (Germany, FR).
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Appendix A Methodology In order to deliver all the outputs required, different activities have been carried out. These activities were the key in producing the final report, the presentation, pitch, infographics and a blog. In this chapter general methodologies will be explained, namely the way literature research will be conducted, the way interviews will be done and the way calculations and models will be made.
A.1 Literature research Literature research will always be the starting point to deliver the outputs. Most of the things that will be studied during this project will include more methodologies than just literature, but it will be the starting point. For doing this literature research, the basis will be Google Scholar and Scopus, where relevant search terms will be used to find relevant literature for specific topics. It is the aim to collect all information needed from peer-reviewed articles, websites etc.
A.2 Interviews Another methodology that will be used often is conducting interviews. The interviews will be used to answer questions on different topics in one interview, for example not only to do the stakeholder analysis, but also to gain knowledge on financial and environmental costs. To give an overview of the feasibility of a business where coffee waste is reused to produce mushrooms, input from different parts of the chain is needed. To make all the stakeholders clear, a modular approach is created (see figure 2.1). To find all relevant information to get a clear overview, input from at least one possible investor, mushroom grower, mushroom buyer, coffee waste producer, waste collection company, and facilitator is needed. These actors are divided into actor groups and ordered in modules based on the operational scale and the possibility that an interview can be conducted. If all actors in the bottom module are willing to cooperate, all the relevant partners are available to make a business of a reasonable scale. If stakeholders from the second module also wish to cooperate, a larger scale business might already be feasible. There is expected to be at least one interview with the bottom module of each stakeholder group. The plan B is that all the information to make a medium size business case is retrieved with only the municipality and the Fungi Factory as partners and that more literature research is conducted. The division and the ordering of the modules is based on our reasoning and expectations in advance. This modular approach is mainly used for the stakeholder analysis, for all other outputs it differs who will be contacted. This will be mentioned in the paragraphs about the specific output. Semi-structured interviews will be used in which a different interview guide for each actor group will be made. The interview questions will be adapted for each specific contact person who will be interviewed. Interviews will always be done with at least two interviewers, so one person can take notes and the other person can ask the questions. A summary will be made of these notes later and this summary will be processed by the method of eyeballing (scanning for and later use the important information). The team is aware that this is a subjective method, but the importance will be valuated with the research questions in mind and will be evaluated by different team members to make it more objective. The answers of the interviews can be used in all parts of the output. The goal of approaching possible interviewees is making an appointment for a face to face interview, but an interview via Skype or phone is possible as well. When the appointments are set, the interview guides will be made and finished before the interview to be well prepared.
A.3 Model on production process Another methodology used is modelling the production process. To analyse the numerical data from the interviews and literature research concerning the production process, the amounts of coffee waste and the possibilities for logistical upscaling, an overview model of the production process will be developed (figure A.3) in which all the revenues and costs of this business set-up will be put. In this way, there will be a picture on the profitability of the case. The result will be a design in which the daily amount of coffee waste can be given as an input, where the amount of mushrooms produced, will be given as an output.
Figure A.3 The process of converting the coffee waste into oyster mushrooms and side products.
The amount of oyster mushrooms produced will depend on the amount of coffee waste collected. After doing a market study to know the mushrooms demand, study the logistics of the process and the location provided, the amount of oyster mushrooms can be calculated as well as the coffee waste processed based on real data. The mushrooms production duration will be taken into account in order to set the coffee waste collection planning and the capacity of the process. It is very likely that the capacity of the process is, at the beginning at least, too small to deal with the huge amounts of coffee waste that are generated a day. In that case, it would be needed to start with a lower input first.
B Interview guide General introduction Good morning /Good afternoon, Our consultancy group is collaborating with the municipality of Utrecht, the Ministry of Infrastructure and Environment and Rijkswaterstaat on the Living Lab project. The main idea of the Living Lab is to connect sustainability issues with small teams of students in order to stimulate the idea of creating a more sustainable world. In our case, Living Lab pays attention to the Beurskwartier area (part of the train station area) of Utrecht and the huge amounts of coffee waste that are produced by the large offices, on daily basis. Based on an estimation, 22 tons of coffee waste are produced per day. Therefore, our main goal is to create a network analysis of partners, who are interested on circular economy and are willing to participate in the project of the Living Lab to grow mushrooms on coffee waste. We would like to ask you several questions to be able to make a feasibility study for a business case to transform coffee waste into mushrooms in the Beurskwartier area. We are trying to establish an overview of the organisations willing to provide the coffee waste, the logistic companies, potential investors, end-users and entrepreneurs. This interview is taking about one hour and if it is okay, we will share your answers with our commissioner and via them with other interested parties. General questions What is your function within this company? What do you know about growing mushrooms on coffee waste? What is your interest in this topic, both personally and in the case of the organisation? What are your expectations from a project like this? More questions can be added here if there is a need for more information
● ● ● ●
Coffee waste providers What type of coffee machines do you have (beans or powder) and how many?
Collection of coffee waste: How much coffee waste do you produce per day? Or otherwise, what is the amount of coffee that is drunk per day? ● How is the coffee waste of your company currently being collected? o Is the coffee waste collected by your company or by an external company? o Do you throw it away separately or do you put it with the other organic waste or the burnables of the rest of the building? o How often is the coffee waste collected?
Waste collection company: After the collection of the waste, who processes the waste further (which waste collection company)? o What are the limits of that contract in terms of minimum or maximum amounts of waste that you deliver? o Would you be willing to change to another collection company if that is a more sustainable alternative? o What do you pay for the collection of your waste (per kg./per trash bin)?
Facilitation: ● Would there be possibilities to change something in this coffee waste system in order to use the coffee waste to grow mushrooms on it? for example: o Would you have space at the general waste collection point in the building for an extra waste bin only for coffee waste or would you be willing to create it? o Would it be possible to hand in only the coffee waste to another company/organisation than the one that is currently collecting the waste? o Would you be willing to pay for coffee waste being collected separately? If this is the case, how much would you be willing to pay in comparison to the current collection?
Collaboration: ● Would there be any other requirements that need to be fulfilled before you can collaborate in a project like this? ● Are there any other constraints that we might not have taken into account yet? Waste collection companies Finance: ● What does the producer of the waste pay for your service? ● What are the transportation costs for you? dependent on gasoline, kg of waste, etc. Logistics: ● How often do you collect the waste at your clients? o How often do you collect the burnables? o How often do you collect the organic waste? ● How much kg. of waste can you collect per time? o How many kg. of waste/containers can you put in a truck? ● How do you collect the waste? o What is the vehicle you use? o What is the fuel you use? Environment: ● What is the CO emission of your company? o What is the amount of CO produced during transport? Transport from companies to factories/ovens. o What is the amount of CO produced during the processing of the organic waste? Burning, letting it rot, etc. ● Would it be feasible, for a company like yours, to collect coffee waste separately? o Would it be possible if the clients would have separate containers for it? o Would it be possible to collect the coffee waste every day or at least within 3 days? ● To what extent are you willing to cooperate with a project/business like this? 2
Mushroom growers Background: ● What was the motivation to start this project of growing oyster mushrooms on coffee waste? ● Why did you choose for oyster mushrooms and not other species of mushrooms? ● In which geographic area are you active? o From who do you get the coffee waste? o To who do you sell your mushrooms? o From who do you get other necessities? Think of spawn, coffee husks, chalk, bags, etc. ● Do you have any certificates or quality marks to show that your product is good? o What kind of certificates do you have? o Are these obligatory or recommended? o Would there be (other) certificates that you would like to get? o What do you need to get certificates? Logistics: ● How do you collect the coffee waste? o How do you transport the coffee waste from the provider to your mushroom nursery? o How often do you collect the coffee waste from one coffee waste provider? o How much coffee waste can you collect per time? ● How do you store the coffee waste? o How long can you store the coffee waste before you start to use it? o Is it possible to freeze the coffee waste and use it later?
How do you distribute the oyster mushrooms?
Environment: ● To what extent do you think the process of growing mushrooms on coffee waste is, in general, a more environmental friendly way to deal with coffee waste? o How much CO do you produce during the collection of the coffee waste? o How much CO do you produce during the process of growing the mushrooms? For gas and electricity for the nursery as well as the emission CO by the mushrooms themselves. o How much CO do you produce during the distribution of the mushrooms? ● What would be other environmental benefits of growing mushrooms on coffee waste? 2 2
Process: ● How many kilogram of coffee waste do you use per growth cycle? ● How often do you start a growing cycle? ● How many kilogram of mushrooms do you harvest per cycle? ● What do you do with the waste of the mushroom growth process? o Is that ideal for you or what would you rather do with it? ● Would it be possible to use your own mycelium as a substrate for the next generation of mushrooms? Finances: ● Where is the income of your company based on? Only from selling the mushrooms or also other branches? ● What are your biggest expenses? o How much rent do you pay now? o How much do you pay for each necessity Think of bags, spawn, humidifier, etc. ● What are your biggest revenues? o Do you ask money for your service of collecting the coffee waste and why? o How much do you ask for the mushrooms (per kg.)? o What are the revenues of your other branches? ● What are the (financial) risks involved in this process? o How do you deal with these risks? Upscaling: ● How many people are working in this organisation now? o How much time do they put in this company? Do they work full time, part-time, or a few days a week for example. o Are all people paid for their work for your organisation? ● What is the potential to grow for your company at the moment? o In terms of potential coffee waste providers? o In terms of space in your nursery? o In terms of available time/people? o In terms of buyers? ● To what extent would you like to scale up your company? o To what extent is it a strength to work on a small scale? o What would be the drawbacks of doing this on a larger scale? o What would be the limit of the size of your company? o How would the growth curve of the different aspects of your company look like if you scale up? In terms of the number of people you need, mushroom cultivation process (more/less humidifiers etc.), efficiency, etc. ● What external help would you like to get now or in the future in order to scale up? o From the municipality? o From investors? o From other mushroom growers? o From other interested parties?
Mushroom buyers ● Why do you prefer to buy mushrooms that are grown in a regular way or on coffee waste? ● How do you decide what products you use for the food you offer? For example the choice for biological products. ● How often do you buy mushrooms and in what amounts? ● Do you currently use oyster mushrooms in your company? ● To what extent would you be interested in processing oyster mushrooms? o If yes: how much mushrooms could you use and sell per day? o If yes: in what form would you want to sell the mushrooms? ● What would be the price you would like to pay for oyster mushrooms in general compared to oyster mushrooms grown on coffee waste? Facilitators ● What facilitating role are you willing to play in this process? o Is this directly or indirectly? Location: ● What are possible locations for the mushroom nursery? ● How far are these locations from the coffee waste collectors? ● How accessible are these locations? Is it easy accessible by car/bike/public transportation? Good connected to Beurskwartier? ● Does the location offer sufficient space for growing the mushrooms? ● If needed, is the climate easy to control? ● What will the costs of the locations be? Network: ● Which organisations in your network, established in the Beurskwartier area, are potentially interested in reusing coffee waste or already working on that? ● If there are any, which collaborations do you have regarding growing mushrooms on coffee waste? Knowledge: ● Which knowledge do you have to establish or help establishing a business case which is growing mushrooms on coffee waste? ● Which advice do you have for scaling up a business case which is growing mushrooms on coffee waste?
C Technical study C.1 Containers design The chosen mushroom growing bags are bags of 5 litres content. They will be filled with 2.5 kg total material (coffee grounds, coffee husks, spawn and chalk) in a prescribed ratios which are confidential. The bags have a diameter of about 25 cm and a length of about 50 cm. Growing Container Four shelves with upright mushroom growing bags take up two meters and an additional 10 cm for shelf thickness. At least 50 cm is needed in the middle of the container as a walking path, this implies that 1.85m is left for shelves (2.35-0.5=185). If the bags are given some space for aeration they can each take up 30 cm. The amount of bags that would fit in the maximum shelf space is 1.85/0.3=6.167. Rounded down this implies 6 bags or 3 bags on each side. The amount of bags that would fit in the length of the container is 12/0.3 =40 bags. In total there is space for 4 shelves on two sides, and 3*40 bags per shelve, in other words 960 bags (=4*2*3*40). Fruiting Container During the fruiting stage more space is needed in between the bags so that mushrooms can grow out. It is estimated that 25 cm distance between the bags should be sufficient to let the mushrooms grow. This means 2 bags would fit per meter width and depth. Still just as much layers on top of each other are possible. A walking path in the middle is still needed. If two bags are put in each layer on each side then strictly speaking only 35 cm of growing path is left. However, when the oyster mushrooms are not fully grown there is still 60 cm left. If the bags which are inoculated first are put in the front of the container and so on, this will not pose a problem when harvesting, because the path is cleared while harvesting. Space is also needed to place a cooling and humidifying device. if this device is put in the middle at the end of the container, it uses the least possible space. One square meter is reserved for the entire height of the container. This means that sixteen bags have to be subtracted from the total number of bags which would fit in one container. the total amount of bags which fits in one fruiting container is thus 368 ((=2 sides * 4 layers * 2 bags/width of layer * 40 bags/length of layer)-16 bags).
C.2 Energy distribution Table C.2.1 Mixing and storage container
5 LED lamps
The energy consumption for the freezer and the fridge is divided by six, since the devices work half hour every three hours (MasterinSolar, P.C., 17 October, 2017). So, every day they work 4 hours instead of 24h. The lighting for the storage and mixing container is only needed during the working hours so, the consumption it is divided by three (24h /3).
Table C.2.2 Growing container
It is expected that the heating will be working 12 hours a day, so the energy consumption is divided by two. Table C.2.3 Fruiting container
5 LED lamps
The cooling system is estimated to work one sixth of the time and the lighting for this stage will be working half of the day. The total energy consumption is estimated to be 1157.87 kWh/month.
D Financial study The units shown in the following tables are estimated according to the proposed design of the process by this ACT group. For some of the ingredients, the units and final cost are not shown because they are confidential. For more information about the missing data, contact Fungi Factory (Fungi Factory, n.d.). The prices of the Materials and equipments are based on a web search conducted by this team. The plastic bags, electric truck, containers, shelves, hangers buckets, and the cooling system prices were found in Alibaba webpage (Find quality Manufacturers, Suppliers, Exporters, Importers, Buyers, Wholesalers, Products and Trade Leads from our award-winning International Trade Site. Import & Export on alibaba.com. (n.d.)). The chalk and mixing container price was found on The Home Depot (The Home Depot. n.d.). The spawn price was based on the Pilz Shop (“Pilz Shop.” Glückspilze.com).The radiator price was found on Tegel Depot (Tegeldepot.nl, n.d). The freezer and the fridge prices were found on Appliance Online (Appliances Online n.d). The cost of the electricity and water are based on real data from Budget Energy (Budget Energy, n.d.) and Vitens (Vitens, n.d.) tariffs, respectively. The cost of the rainwater harvesting system is estimated by real data from Rainharvesting Systems (Rainharvesting, n.d) and the solar panels costs were estimated based on the data from MasterinSolar (Home. n.d). The price for the mushrooms is the same that the price found on different markets (Albert Heijn n.d., Jan Linder n.d. , Fungi Factory n.d., etc.). The price for the mushrooms growing kits was based on the Rotterzwam price (Rotterzwam n.d.). The sale of the compost price was found on Tuinaarde-compost data (Tuinaarde compost n.d.). The amount of money charged for collecting the coffee waste is based on the Gemeente of Maastricht data (Gemeente Maastricht, 2014).
D.1 Profit, costs and revenues Table D.1.1 Monthly costs
Materials and expenses
Total costs (â‚Ź)
0.055 eur/ kW
35 h/ week
*Location, it is expected to be loaned *Total 1, expenses when using water and electricity supplied by the traditional method *Total 2, expenses when solar panels and rainwater harvesting system are used. Table D.1.2 Monthly revenues
Total costs (â‚Ź)
Kits growing mushrooms
Collecting coffee waste
Table D.1.3 Monthly Profit
*Total 1, without using solar panels *Total 2, with the use of solar panels and rainwater harvesting system
D.2 Investment and payback time Table D.2.1 Investment and payback time
Materials and Equipments
Total Costs (â‚Ź)
Cooling system, humidifiers
Hangers and bars
Installation costs equip.
Electricity and water installation
Solar panels with installation (kwh/day)
Rainwater harvesting system +inst.
*Total 1, when electricity and water are supplied by the traditional method *Total 2, when solar panels and rainwater harvesting are used for generating electricity and the water needs.
Payback time (months) 11.1*
*Without solar panels ** With solar panels and rainwater harvesting system
The possible extra time and therefore, extra costs derived from the experimental phase, are not considered in the financial analysis.