Friday, October 18, 2019

ORCA: Helping Restaurants Clean Plates

A new collection bin has appeared on the curbsides of New York City.  Small, brown dumpsters with declarations of ‘organic waste’ on their countenance encourage city dwellers to deposit their banana peels and apple cores rather than sending them to the landfill.   New York City sends about 1.3 million tons of food waste to landfills each year  -  the single largest item in the mix.  With landfill space on the east coast quickly getting used up, something had to give.
New Yorkers can give themselves a pat on the back for participating in the drive to reduce landfill waste, but the big food waste problem is not in the home.  It is in the restaurant.  According to the Food Waste Reduction Alliance a half pound of food waste is created for every meal served in a restaurant, from the peelings in the kitchen to leftovers on the plate.  More than three quarters of this waste is sent to landfills and only a small portion is recycled or donated to the needy.
Image result for orca food waste image
Canada-based Orca offers restaurants a food waste solution that eliminates the burden on landfills.  Named for its functions  -  Organic Refuse Conversion Alternative  -  the ORCA system is an on-site natural digester for commercial volume food waste.  Microorganisms digest the food waste into a liquid that can be disposed into municipal or commercial sewer pipes.  The system is fully enclosed by a stainless steel case that helps the system ‘blend in’ with other food service equipment. Customers can choose to purchase or lease.
Orca offers four different sizes of its digester system that make it usable in a variety of situations from campus food services, to restaurants to cruise ships.  Introduced in September 2018, the most recent addition to the product line is the Baby ORCA.  As the smallest system it is capable of recycling up to 360 pounds of food waste each day.  It needs only five square feet of space in a restaurant’s back room. 
Image result for orca food waste imageThe ORCA system saves on landfill space, reduces landfill greenhouse gases, and can eliminate disposal fees. Nonetheless, it does not itself capture any value from the food waste.  The organic material is still sent away from the customer’s establishment as waste  -  just in a liquid rather than solid form.  However, a municipality with some sort of biogas or fertilizer program could increase production volumes from the new inflows of organic-laced liquids. 
There are other similar systems competing with ORCA.  A start up called Power Knot has also developed an enclosed food waste digester for commercial scale kitchens. Power Knot’s LFC system is used by a diverse group of kitchen operators around the world from the fancy seafood restaurant Nobu to the more utilitarian U.S. Army.  Power Knot is headquartered in the United Kingdom and has sales offices on three other continents.

Orca has installations in North America as well as the U.K., Europe, Asia and South America.   The company has collected experiences from a wide array of customers, including restaurants, cruise ships, food services and college commissaries.
The Orca team may have a lot of data on how their customers are doing with the ORCA system, but investors will find few data points on the company.  As a private company Orca has no reporting responsibilities.  Nonetheless, investors who want to support environmental solutions may be well rewarded by watching for news from Orca.  Future plans to expand could serve up opportunities to participate in a private placement of equity capital or that even an initial public offering.  

Neither the author of the Small Cap Strategist web log, Crystal Equity Research nor its affiliates have a beneficial interest in the companies mentioned herein.

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