Peanut Profits
StarchTech Inc. greens up the packaging industry with a new line of eco-friendly “peanuts.”
The next time you open a package that arrives in the mail, don’t be surprised to find a note that reads:“This Product is Protected by Biodegradable Loosefill.”
If StarchTech Inc., a Golden Valley-based producer of biodegradable products made from—you guessed it—starch, has its way, consumers will be finding that sort of note more and more frequently in the years ahead. The company has made a name for itself with its Clean Green PackingTM packaging materials, a line of environmentally friendly “peanuts” that dissolve in water and can even be composted, unlike the more common polystyrene foam peanuts.
For more than 10 years now, StarchTech, founded by chemical engineer and current CEO Edward Boehmer, has produced its self-proclaimed “packing peanuts that saved the world” by capitalizing on starch technology. “We blend corn and potato starch with other biodegradable polymers and send it through an extrusion process” says Dean Bartels, the company’s director of sales and marketing.
Sounds simple? It is. At StarchTech’s 34,000-square-foot manufacturing facility, a cornstarch-like powder is shoveled into a single-screw extruder which churns out small pellets that resemble flattened pearls. The pellets are then shipped to distributors or loaded into another extruder that functions as an industrial-sized hot air popcorn popper and expands the pellets into the peanuts.
“What’s really taken off is distributing the pellets,” says Bartels. “We set up our distributors with their own extruder, which runs between $50,000-$75,000.” This arrangement has considerably reduced transportation costs and enabled StarchTech to expand sales across the United States, Canada, and as far away as Australia.
The results are showing. In the last few years, the market share for biodegradable peanuts has climbed to 15 percent of the total packing peanut market (polystyrene peanuts make up the other 85 percent).
“In 2005, we sold nearly 10 million lbs. of our pellets,” says Bartels. “That’s up almost 20 percent from the previous year, and we expect this trend to continue in 2006.”
Bartels says StarchTech is venturing into other biodegradable product areas as well, including cutlery, dog bones, and golf tees. Still, he emphasizes, “we’re paying the bills with pellets and peanuts.”
—Sarah Finley