Business Is Shrooming: Back to the Roots Grows Gourmet Mushrooms From Coffee Grounds

One man's waste is another man's wage.
Back to the Roots founders Nikhil Arora and Alejandro Velez pose with their DIY mushroom kit. (Photo: Back to the Roots)
Aug 22, 2011· 4 MIN READ
Salvatore Cardoni holds a political science degree from the George Washington University. He's written about all things environment since 2007.

Days before spring break 2009, a pair of Cal Berkeley undergrads decide to grow shrooms in the kitchen of a frat house…

I’m gonna go ahead and pump the breaks on your assumptive noggin right here and now. Where you think this story is headed is not where it ends up.

Oh, Alejandro Velez and Nikhil Arora’s tale is a heckuva trip, that’s for sure. It just isn’t a foray that dead-ends in a dazed and confused, psychedelic haze.

Velez and Arora know precisely what they’re doing—which is using discarded coffee grounds as soil to grow sustainable, gourmet oyster mushrooms. The fungi are sold nationwide at Whole Foods as DIY kits called Easy to Grow Mushroom Gardens, priced at $19.95.

Each week their company, Back to the Roots (BTTR), collects 20,000 pounds of grounds from 32 Peet’s Coffee & Tea stores in and around Oakland, California. The detritus would have otherwise been dumped into landfills.

“Our goal is to collect, divert, and reuse more than one million pounds of coffee grounds in 2011,” says BTTR cofounder Arora, to TakePart.

Of the 10 test buckets of oyster mushroom spawn that we had planted, nine were just completely contaminated. But one had some awesome, gorgeous mushrooms.

The duo’s improbable journey began in February 2009.

With graduation rapidly approaching and with each having already secured well-paying financial sector jobs—Velez as a consultant with PriceWaterhouseCoopers and Arora as a banker for Credit Suissse—it’s a minor miracle either was still attending class with any frequency.

But there they sat in a Business Ethics lecture on the day when a visiting professor happened to mention in passing that women in Colombia and certain sections of East Africa fought malnutrition by growing mushrooms from coffee grounds.

Intrigued by the notion of turning local waste into local food, each followed up separately with their professor, who subsequently introduced the inquisitors to each other. “We met up and started to kick around some ideas,” says Arora.

Within days, a ready-made business, the fruits of which would spoil their grandchildren with untold riches for generations to come, was born.

Well, not exactly.

Their initial attempt at DIY urban mushroom farming, aided in part by the advice of maestro mycologist Paul Stamets, was cooked up in Velez’s fraternity kitchen.

It was a 90 percent failure.

“When we came home (from spring break) it was one of those catalytic moments,” says Arora. “Of the 10 test buckets of oyster mushroom spawn that we had planted, nine were just completely contaminated. But one had some awesome, gorgeous mushrooms.”

Their science experiment yielded tangible results, but did the fresh fungi taste any good?

“I remember asking Alex, ‘Have you tried them?’ ” says Arora. “And he was like, ‘No, why don’t you?’ And then I said ‘No, but what’s the best restaurant in town?’ ”

That very same day, the ambitious twosome—remember, at this point in their venture they had absolutely zero food or agriculture experience—walked right into Chez Panisse, toting their bucket-o-frat-fungi. Founded by iconic locavore chef Alice Waters, the restaurant is consistently rated as one of the best dining establishments in the world.

“Alice actually happened to be there that day,” says Arora. “She called the head chef over and he literally sautéed them up on the spot. He said ‘This is delicious.’”

Bucked up by Waters’ seal of approval, Velez and Arora went for broke—walking the same bucket on over to Berkeley Whole Foods. Was the supermarket interested in their ’shrooms, the fellas asked straight up?

The chain’s Northern California regional produce coordinator, Randy Ducommon, was indeed impressed, both with their determination and their product. And so while that was the “day when the momentum really built,” says Arora, it was also scary since now they had to figure out how to scale-up the production process.

That summer, they used a $5,000 social innovation grant from the Berkeley chancellor’s office to perfect their nascent method.

“It took about six or seven months after that watching a ton of YouTube videos, reading articles online, working in the ecology department, trying to figure out how to take that onebucket that grew and do it on a bigger scale,” says Arora.

By the fall of 2009, BTTR was selling around 60 pounds of mushrooms at the Berkeley student co-op. But there was a problem. Unless you’re an industrial-sized farm, it is hard to turn a profit selling mushrooms wholesale.

So, buoyed by two $50,000 grants—one from Hitachi Foundation and another from Miller Coors—BTTR decided to pivot to DIY mushroom kits, which essentially work like this: you buy a kit, you expose it to sunlight, and you spritz it with water twice a day. And that’s it. In a little more than 10 days, one kit grows one pound of fresh mushrooms. On Earth Day 2011, the kits went on sale in more than 120 Peet’s Coffee & Tea’s around the country—this in addition to the more than 200 Whole Foods stores nationwide they were already available at.

The end product of Velez and Arora's fungi experiment. (Photo: Back to the Roots)

As BTTR’s business grew, so too did their waste.

“First we started to build up a space behind the warehouse, but eventually we had these massive amounts of spent coffee grounds mixed with mushroom roots and our landlord was like you guys need to do something about this,” says Arora.

So Velez and Arora did what any twenty-something entrepreneurs would do in that situation—they put an ad on Craigslist.

“About two weeks after we had a two-month waiting list on all of the grounds,” says Arora. Quickly, BTTR realized that their waste—which, remember, originated as another businesses’ litter—was a premium and nutritious soil additive. The soil amendment—enough to mend 40 household plants—sells for $9.95 a bag at local garden centers and nurseries, as well as online.

For a company founded on generosity—Peet’s Coffee could have very well declined Velez and Arora’s oddball request to collect their trash in 2009—BTTR does well to pay their good fortune forward.

“Our number one thing is the community,” says Arora. “We do a ton of tours of our farm for children and schools. We really want to make our place here in west Oakland a hub of sustainability.”

While Arora says that the company is currently experimenting with growing shitaki mushrooms from three new waste streams—strained grains and hops from a local brewery, spent tofu from Hodo Soy Beanery, and spent tea from Oakland-based Numi Organic Tea—his long-term wish is that BTTR helps to grow the grow-at-home sustainable movement countrywide.

“We think this whole sustainable, grow-at-home movement is very stuck in Berkeley with the hippy stereotype—but there is such a huge potential here to take this business model across the country and make it more mainstream through good design and ease of use. That’s the future.”