From improved inventory management to composting, restaurants can implement several strategies to reduce food waste, says Winson Wong, co-founder of Afterlife Ag. In practice, however, “the vast majority of this food still ends up in landfill,” he says.

New York-based Afterlife Ag (slogan: “Don’t let waste go to waste”) originally tried to address the problem by setting up a hyperlocal composting network, but gradually changed course, says Wong, who founded the company (then known as Peat) in 2021 with Sierra Alea and Ryan Freed.

“Composting is challenging. It requires a lot of space, it’s very manual and it’s a lot of work. The reality is that if it really had a good return, people would invest a lot more in it.”

The three then moved on to a more creative solution: they used the food scraps from restaurants that they couldn’t compost as a substrate to grow mushrooms on, which they could then sell to chefs. This created a circular solution.

‘We are trying to find out how we can make food waste more valuable’

Growing specialty mushrooms on beds of food scraps is of course not for the faint of heart, admits Wong, one of six recipients of funding through the new ReFED Catalytic Grant Fund, an initiative to tackle food waste in restaurants.

If it were really that obvious, every commercial mushroom grower would do it, he admits, since companies pay you to pick up their waste.

“A lot of investors asked me why no one else is doing this (using food waste as substrate in commercial mushroom farming)? Probably because no one is dumb enough to do it,” he says. “But our goal wasn’t to build a mushroom farm, it was to figure out what to do with food waste, so we’re approaching this from a different angle. We’re trying to figure out how to make food waste more valuable.

“We have spent a lot of time experimenting and testing on our mushroom farm and that process is still ongoing, because different wastes contain different compounds and nutrients and it is not always consistent. Therefore, we have to combine the waste with some wood waste and add some amendments to control the acidity. In addition, we have to sterilize everything.”

He adds: “It took a while, but we have now been able to create our own patented formula for multiple types of mushrooms and all types of waste, mainly kitchen prep waste, a lot of fruit and vegetables, but it is quite fresh because we collect it six days a week.”

‘People who give us their waste love that they get something in return’

Afterlife Ag, which grows its mushrooms on stacked shelves in a facility in Queens, uses an autoclave to sterilize the materials, a mixer and grinder to blend the food waste until it’s relatively consistent, and an automated process to inoculate the substrate with liquid mycelium.

According to Wong, “The only thing we haven’t really automated yet is harvesting, because we have so many different varieties. There are companies that are doing that and eventually we will work with them, but for now it’s still a bit early.”

After about four weeks, depending on the type of mushroom, Afterlife Ag delivers the mushrooms back to the restaurants, Wong says. “Our circular model is the reason retention is so high, because people who give us their waste love that they get something in return.”

The mycelium-rich substrate is donated to local farms, parks and gardens, Wong adds. He currently grows about 1,000 pounds of mushrooms per week. By the end of the summer, he plans to scale that up to about 3,000 pounds per week and early next year to 15,000 pounds per week.

Financing

So far, Afterlife Ag has raised just over $3 million in venture capital and “a couple hundred thousand dollars in grants,” Wong says. “I think people are excited that we can use food waste, which doesn’t get enough attention, so I think we attracted funding because we had a circular business model that could also be adapted in many different places around the country and around the world.

“The other reason is that interest in mushrooms, and especially in special mushrooms, is growing very quickly.”

Scaling up

How scalable is Afterlife Ag’s model?

According to Wong, “Right now, over 60% of the mushrooms (produced in the US) are grown in and around Pennsylvania, so there is room to build more local farms in partnership with local businesses that generate waste that can be reused and in return buy fresh local produce from us.

“Our raw materials are free, our process is quite automated, and the margins on mushrooms are quite good, so we can be very competitive,” he says. “And the great thing is that restaurants that buy the mushrooms back from us can tell their customers about the circular approach. We could try to sell the mushrooms directly to consumers and tell this story ourselves, but we don’t want to spend our time on B2C marketing, which takes a lot of resources.”

The business model

Because none of the three founders had experience growing mushrooms, the company brought in people with expertise along the way, Wong says. “We have people who used to work at (indoor farming company) Bowery, people who used food scraps to feed insects, so that’s been really helpful. Ultimately, building a startup is all about finding the right people to work with and people who share the same mission.”

Right now, he says, his focus is squarely on driving operational efficiencies and growing a consistent product on a substrate that isn’t 100 percent consistent by nature: “We also spend a lot of time talking to other waste management companies to make sure every step is as efficient as possible.”

He adds: “But I also think strategically about where do we go from here? What’s the right model? We could potentially run a cash flow business and we’ll be fine, but that’s not my goal here, that’s not why we’re doing this. I really want to have an impact from an environmental perspective, so really thinking about what the future business model looks like is important. And to be honest, I still don’t know exactly what that is. It’s something I’m still exploring by talking to a lot of people.

“But as the farm continues to grow, it will give me more opportunities to meet larger partners and see if we can build something together across the country. I think that’s really important and the next step of what I’m trying to achieve. So I’m very focused on building relationships with hospitality companies, waste management companies, other farmers and local government.”

‘When you work with living organisms, things can sometimes go wrong’

What kept him up at night over the past few years, he says: “There were days, especially in the beginning, when certain mushrooms just wouldn’t grow and we didn’t know why. It felt awful to have to tell a customer that you can’t deliver on something you promised.

“But now we have much more control. We understand the variables that can affect growth and we track everything. But at the end of the day, when you’re dealing with living organisms, things can still go wrong.”

Afterlife Ag blue oyster mushrooms growing Image credit Afterlife Ag
Imagery: Afterlife Ag

The last batch of recipients who received funding through the ReFED Catalytic Grant Fund Involving:

  • Afterlife Ag: Providing a circular solution that allows restaurants to prevent food waste and purchase mushrooms grown from food that would otherwise be thrown away.
  • Centre for EcoTechnology (CET): We provide technical support to food companies in the field of reducing, recovering and recycling food waste.
  • ConnectedFresh Company: Sensors and AI help restaurants with inventory management and waste registration.
  • Food Rescue US: Make donating food to restaurants easier through an app.
  • Green Eating Alliance: Helping restaurants implement and maintain food waste reduction strategies.
  • Prism: Development of a storage system for restaurants that uses a controlled atmosphere to extend the shelf life of fresh produce.