Entrepreneurship can take many forms, but for Bardee founders Phoebe Gardner and Alex Arnold it is the stench of a truck full of food waste dumped at a university carpark on a Friday night, running the scraps through a woodchipper to feed insects and having the whole place clean by Monday morning.
Who said business was glamorous? Especially leading one with a strong social purpose to reduce food waste and greenhouse gases, flipping the carbon ledger into positive territory.
The company today is processing 10 tonnes every eight hours, feeding around one billion black soldier fly larvae that it keeps in eight different labs according to their life cycle, creating protein to service industries ranging from pet food to aquafeed to fertilisers.
That's from Bardee's current 2,500sqm pilot facility in Sunshine, Melbourne, and the concept has been such a hit with customers that production can't keep up with demand from prospective new clients.
Following a $5 million seed raise in late 2021 with Blackbird Ventures and angel investors, designs are currently underway for a facility that will be 30 times larger, which Gardner expects will be able to offset 500 tonnes of carbon emissions daily.
With their team of 30, architect Phoebe and entomologist Alex have come a long way since they started exploring their idea's potential under Bardee's former name Beyond Ag in 2019 - a last-minute name registration before they took part in the Melbourne Accelerator Program (MAP) at the University of Melbourne.
"Alex and I are first time founders. We had no business or entrepreneurial experience before jumping into this - how we started was really just one step at a time, testing if our idea was possible and reassessing at each step," Gardner tells Business News Australia.
The first step was getting a hold of the flies themselves, then testing if they could breed them and turn their manure into fertiliser and bodies into protein that could be used on an industrial scale.
"The black soldier fly is originally from Florida and it’s ubiquitous around the world now, and is commonly found anywhere in Australia north of Sydney. It’s a non-pest, it doesn't eat crops or damage crops, and it doesn't bother livestock," Gardner explains.
"Where you naturally would find this insect is on a rainforest floor, recycling fallen fruit from trees back into soil and nutrients into the ground.
"Alex got in contact with a number of field entomologists around Australia, particularly up north and we asked them to go into their own surroundings and identify if they could find a colony of black soldier flies, to identify them and then select some to send us as samples."
This collection was undertaken by entomologists in different parts of Australia including islands off the coast in order to gain the widest possible genetic diversity of the insect.
"Once they arrived in Melbourne, we started to breed them in a lab environment and assess their suitability to use their amazing transforming capacity to turn food waste into fertiliser and protein," Gardner says.
"We've been building on those traits of that original group of insects ever since, and then we continue to have an insect population health program now where we use breeding the insects to select for specific traits.
"We probably have about a billion flies now, and we have the most productive fly breeding per square metre in the world in our breeding labs," she claims.
To get to this point has been messy to say the least. In 2019 the University of Melbourne gave the startup a space at the Horticulture Campus in Burnley, just next to Richmond, giving them 60 square metres to start testing.
"It was enough to fit a shipping container basically, and Alex and I had our friends and family help us build a science lab there. With my background in architecture we were able to do that," Gardner says.
"Inside that tiny space we were able to process two tonnes of food waste per week into sample products, and we were able to breed the insect in that lab as well and prove out the basic concept."
This is when the startup was receiving the food waste at the university carpark, which at one point escalated to a whole new level with the arrival of fish scraps.
"Their truck arrived with two tonnes of tuna and salmon heads from the Queen Victoria Market, and I didn't realise just how large some food waste items are," Gardner says.
"The actual salmon heads wouldn’t fit through the woodchipper from Bunnings that we were using to process the food waste.
"There were three of us at that stage, and we had to go and get axes and cut up the heads smaller so they could fit in the woodchipper."
Partnering with industry to cut food waste
A report published by Food Innovation Australia Limited (FIAL) in 2020 found 7.6 million tonnes of food were wasted in Australia each year, accounting for approximately 3 per cent of the country's annual greenhouse gas emissions, not to mention the use of 2,600 gigalitres of water - or around five Sydney Harbours - to grow what ends up as rubbish in landfill.
It is a problem that is estimated to cost the economy around $36.6 billion each year. According to the Food and Agriculture Organisation (FAO) of the United Nations, globally about one third of all food produced is lost or wasted, costing around $940 billion.
It is still early days for Bardee to make a dent in those numbers, but the founders - who are partners in life as well as business - have a vision to "reshape the global food system".
"What we want to see is systems like Bardee’s system where you take waste streams from cities, and transform them back into ingredients for food production," Gardner says.
"We want that to become like a utility for all cities, just like running water, electricity or recycling, food waste can go back into really sustainable food production.
"We want to have a Bardee facility in as many cities as possible across the globe to create these sustainable, circular systems."
She says something the pair realised when they started the business was how "deeply unsustainable" current agricultural practices were, and how essential it was to transition over the next 10 years in the face of climate change.
"There are resources like phosphorous that we’re running out of. This type of system, the ability to recycle nutrients back into the food system, becomes critical to achieving that transition."
To date Bardee has partnered with large property trusts such as ISPT and Charter Hall Group (ASX: CHC), as well as food manufacturers, to receive food waste that would have otherwise gone to landfill.
"It’s actually cheaper for them to send their food waste to be upcycled into protein and fertiliser, than to send it to landfill," Gardner says.
"We partner with existing waste logistics companies, so any rubbish truck that you see on the road could actually be coming to Bardee with a load of food waste, and we receive up to five trucks a day at our pilot facility.
"Those property trusts are owned by the big Australian superannuation funds...if we can make 30 per cent of people’s super carbon neutral or carbon positive by getting food waste out of landfill and diverting it to Bardee, that’s the goal."
Circular economy approach yields carbon positive pet food, takes on overfishing
Not only does Bardee have what Gardner claims to be the largest recycling-oriented insect processing facility in the country, but there is an art to the products it produces as well that begins with how the food waste received is sorted.
"We receive all sorts of different food waste, and then we profile that food waste with nutritional profiles with an AI set-up," she says.
"When we feed our insects we’re making a really special recipe for them. We know if we feed them a particular recipe then we can target a really great nutritional profile for a particular product or feed type," she says.
"We could target a specific ammino acid or fatty acid profile for feeding salmon. That's different to how we would produce a protein that's really fantastic for dogs, which we’ll be trying to make low in ash and calcium."
The company has four main product ranges: pet food for dogs and cats, aquafeed, protein meal and oil for poultry operations, and fertiliser that comes from frass - the insect's droppings.
"It's B2B (business-to-business). We sell the ingredient and it replaces unsustainable proteins like fishmeals as an example that are causing overfishing, not just in pet food but we’re working with aqua-feed producers, poultry producers, layer hen feeds," Gardner says.
"It replaces soy which is a really devastating product in the sense that they deforest the Amazon.
"In dog food it's replacing any other protein like beef or chicken, and then it has a carbon positive status."
She adds it is a natural protein so in its nutritional profile it is similar to feeding salmon to a pet, and it is also hypoallergenic.
"It's got high palatability as well so dogs actually really like it. We've done trials on palatability for dogs where dogs have strongly favoured insect protein kibbles and foods over their current or existing kibble.
"The goal is to get pet dog foods on the market and our supermarkets in Australia that are carbon positive, so you could be offsetting carbon by feeding your dog. And every tonne of the insect protein we produce offsets up to 50 tons of CO2 emissions.
"The other thing that we’ve done is we’re providing a mince as well as a meal, so it’s not dried – there’s less energy that goes into producing it, it can be fed as part of a raw diet, and as part of that process we’re also HACCP certified," she says, noting the facility itself uses solar power.
Bardee's aquafeed has been shown to reduce 30 per cent of fishmeal in rainbow trout diets. This is critical for improving ocean health as much of the world's fishmeal comes from vital anchovy shoals off the coast of Peru where illegal fishing is rife.
"Most of our aquafeed customers are in salmon or trout, particularly in Tasmania. There's a lot of focus on sustainability and the impact of those farming practices in the production of salmon," she says.
"We’re working with them to replace unsustainable ingredients in their feed like soy, and other ingredients, with a sustainable natural protein like the insect protein that we’re producing."
On the fertiliser side, she says every tonne produced offsets five tonnes of CO2 emissions.
"We've got organic certification now, and so we’re really excited about being in both the gardens and horticulture space, so that fruit and veg that you might be buying in a supermarket could be grown - and currently is grown in the case of lettuce - with carbon positive fertiliser that’s making our soils healthier, and there’s this big recycling, circular economy effort," she says.
The company is also in pursuit of selling carbon positive eggs on supermarket shelves.
"We're working with a number of egg producers who work with the supermarkets to replace soy and other unsustainable ingredients in the feed for their layer hens," Gardner notes.
It may be harder for most people to bring into their diets, but Gardner also hopes to be able to produce insect protein for human consumption.
"This particular insect isn't FSANZ approved which is the food standard for Australia and New Zealand. We have an application in, we've worked with CSIRO on that application," she says.
"It’s only a matter of time – other insects have been approved already like grasshoppers and mealworms. And now we're going through the application for black soldier fly larvae."
However, for the time being there are many interested parties that simply can't be supplied due to Bardee's limits to production.
"We can process up to 10 tonnes every eight hours at our current facility, and we currently operate from 6am to 10pm every day," Gardner says.
"We're really constrained in supply on our insect protein, which is why we need to move to this much larger facility.
"An order size for poultry might be 150 tonnes for one month and one run of pet food might be eight tonnes, and we’re only able to produce a tonne or so a day - we're currently only able to work with a couple of customers and we have a lot more waiting who we really look forward to working with when we open the new facility next year."
She says the new facility will be able to process 300 tonnes of food waste a day.
"That's a highly automated facility, and that will be able to offset about 500 tonnes of Co2 emissions per day, and then we’ll have an application for carbon credits as well for that facility and our current facility."
Bardee, whose workforce is now 70 per cent women with staff from all over the world, has also participated in the Startmate accelerator program and has received support from LaunchVic, which hopes to propel more ag-tech startups through three new programs in conjunction with Agriculture Victoria - Farmers2Founders, Rocket Seeder and SproutX.
"Victoria is Australia's largest agriculture producer, but our research shows the AgTech sector remains small and underdeveloped, with less than 40 AgTech startups active across the state," LaunchVic CEO Dr Kate Cornick said last month.
"LaunchVic wants to see these numbers change, so we're backing pre-accelerator programs that support people in the agriculture sector with big ideas and early-stage entrepreneurs who want to launch and grow startups.
"Not only does this increase the number of startups in our state, it can provide a new source of income for farmers and create new technology that improves productivity and sustainability in one of our most important industries."
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