The Big Interview: Joe Frankel, founder of Vegware
I think we're on the edge of a revolution,' says Joe Frankel, mulling over the food service disposable packaging market.
Frankel is founder and managing director of Vegware, which set up its Edinburgh headquarters in 2006 and describes itself as the only company producing completely compostable packaging in the world.
Products cover a wide range, from coffee cups and takeaway boxes to sushi trays and carrier bags, and are made from renewable or recycled materials such as sustainably sourced paper, sugarcane and wood pulp. All products can be commercially composted with food waste.
The Vegware boss sees a “huge” opportunity for the firm to capitalise on increasing attempts to tackle the eye-watering amounts of food packaging thrown away. Global giant Nestlé last week pledged to make all of its packaging recyclable or reusable by 2025, although such plans were deemed by Greenpeace to “lack ambition”, and while the UK Government failed to back a “latte levy” on the 2.5 billion single-use coffee cups binned every year in the UK, the attempt at legislation has highlighted the problem of disposable cups.
The tide is also increasingly turning against straws, with the Marine Conservation Society estimating that 8.5 billion are used every year, and plastic ones are among the top ten items found in beach clean-ups.
Frankel, now in his early 40s, says that while there is still plenty to be done to improve recycling, much progress has been made. “When I was a kid we all just threw glass bottles in the bin, and now you wouldn’t dream of it. I suspect in the next couple of decades we’ll get that way with lots of wastes – because if you make things easy for people and it’s clear, people will do the right thing.”
He calls for government leadership to simplify and standardise recycling, helping make it more efficient. There is pushback on this, he admits, given the necessary time and cost. But he points out that 100 years ago all railways gauges were different and that was fixed. “Surely we can agree what goes in the blue box – how hard can it really be to actually transform this thing?”
There certainly remains widespread confusion among consumers over what can be recycled. Recent research carried out by the British Science Foundation found eight out of ten people believe recycling makes a difference, yet nobody scored full marks when quizzed on what rubbish can be recycled.
Disposable coffee cups were among the most common items wrongly put in the recycling bin, while other frequent errors included not emptying and rinsing food containers, meaning tonnes of recyclable waste ends up in landfill.
And this contamination of packaging by food and vice versa is a major hurdle, according to Frankel, who says bins in outlets such as Pret A Manger or McDonald’s contain a mixture of food waste and packaging that inevitably combine.
“The only way to achieve full recycling is by composting… people are starting to get on board with that, so I guess our product design philosophy is that you can mix as many different materials as you’d like as long as they’ve all got the same recycling stream.”
When it comes to how far infrastructure still has to go to catch up, and the amount of waste still going into landfill, Frankel’s response is: “I don’t want to use the word ‘depressing’, but there’s still lots of opportunity, let’s put it that way.”
The UK Government in February revealed that the recycling rate for waste from households increased in all parts of the country in 2016. However, the rate for Scotland was the lowest by their calculations, at 42.8 per cent, compared with 43 per cent in Northern Ireland, 44.9 per cent in England and 57.3 per cent in Wales. The EU target is for the UK to recycle at least half of household waste by 2020.
Frankel says: “There’s still a journey to be had, and the more that consumers demand it and the more that the Government mandates it, the better.”
He believes that once the systems are put in place to use valuable materials, such as nutrient-rich food waste, the whole business model will be turned on its head, with waste moving from being a cost to a resource that benefits the economy and environment.
Vegware’s sales reached £20 million last year, with £25m in its sights this year. “In the last three months the number of incoming enquiries has doubled, which is very exciting,” Frankel notes.
He acknowledges that such rapid growth puts “a bit of a strain on the team”, which now numbers about 60 at its offices in the Scottish capital – in Melville Street since January, after the company outgrew its previous site overlooking the Union Canal. But the flurry of interest is the kind of challenge any business would love to have, while the talent pool in Edinburgh is “amazingly strong”.
“It’s all good,” he states. “We have the capacity, certainly on the supply side, to keep up with the demand.”
The firm has now launched its own composting collection service called Close the Loop, picking up clients’ used Vegware and food waste to create high-grade compost “in a matter of weeks”.
“We have pretty much full coverage now in Scotland,” says Frankel. The firm uses a site in Blantyre for composting, and plans are afoot to debut the service in England. “The idea is that we go to a catering site, look at what they’re using, and help them switch all of their disposables to being compostable – none of it needs to go to landfill.”
Vegware has also launched its own business in the US, last year taking the wraps off an office in California, where it has five staff. This is in addition to operational bases in Australia and Hong Kong, and distribution throughout Europe and the Middle East.
The growth into the US in a way closes the circle. It was in California that Frankel had the first inspiration for the business when he was impressed by a spoon made of potato and corn that his wife had brought back from a San Francisco farmers’ market. He traced it all the way back to the bioplastic resin producer who created it, had some cutlery made, “and that was the start of Vegware really – I didn’t have any idea of what it could become”.
Frankel’s own evolution included spending his childhood among the palm leaves of Papua New Guinea, with his father, Professor Stephen Frankel, an anthropologist. His mother, Hermione, has been dubbed David Bowie’s first love, leaving home at 19 to live with him, and she was rumoured to be the muse for many of his songs.
The future Vegware boss later moved into academia, building automatic speech recognition systems. Commerce was something he hadn’t really seen as part of his future, but looking back he admits that when he visited festivals, he would be “almost envious of the person selling the sangria or hotdogs or whatever – I didn’t realise till I was 30 that I had ‘business envy’”.
Some of Vegware’s products being made of Areca nut palm leaves gathered in the forests of Kerala, southern India, may nod to his own exotic childhood.
But it is his time in technical research that provided excellent training for the constant hurdles of getting a business off the ground. His voice recognition work focused on converting the spoken word into text, and acclimatising to an environment where “nothing ever works first time… it was that discipline of taking a big problem and breaking it down into little problems and then figuring out a path through them – that’s still my core skill”.
It’s “aspiring to be steely about things – which some days work and others doesn’t”, he says. It still amuses him that his object in starting the firm was that it would give him more time to play music. “That’s kind of dumb, looking back.”
Private equity house Bradenham Partners initially acquired a 20 per cent stake in Vegware, and has since upped its investment. Now, Frankel estimates that company is probably 3 per cent of the total food service disposables market in the UK “and growing at pace”.
Where does he see this heading? “I don’t have a number in mind – but let’s say we are being ambitious.” He sees a major opportunity in the US, where the food service disposables market is worth some $8 billion dollars, amid plans to grow the business overall, while maintaining its “core ethos and culture”.
Vegware – which he deems a “solution-based company first and a green company second” – is also working on further product innovation in a rapidly evolving market of food trends.
As for geographic expansion, the firm is not actively targeting new regions but rather looking to strengthen its presence in existing locations. He adds that the UK, its largest market, is strong, while Europe, which comprises about 20 per cent of its exports, is seeing rapid growth. Activity has also picked up in the Caribbean, with several islands banning plastic (“with good reason – who wants to go snorkelling with a load of plastic bobbing around?”).
“Suddenly we’ve got substantial markets opening up there and the US, and then we’ve got partners working with us in Australia, so between that lot I think we’ve got enough to think about.”
Frankel remains entrenched in both the strategy and day-to-day operation of business, and doesn’t see himself taking his hand off the tiller. “I’m not really a golfer, so I’m never going to be the hands-off CEO.”
He also has no plans to sell the business. In his view, while some people are serial entrepreneurs, he gets the same variety of experience from Vegware, for example by it launching the new waste service and US arms.
“I get that ‘fix’ in the company. I guess, for as along as I’m enjoying it and have a useful function, I’ll keep cracking on.”