Cheers to the Environment: PurposeEnergy Aims to Make Brewing More Sustainable
When Eric Fitch decided to start his own company a few years back after working on a string of other startups, he knew clean energy was the way to go. “I couldn’t escape the gravity of this renewable energy thing,” he says.
He thought the industrial and manufacturing arenas would be the best targets, as industries such as transportation were already teeming with renewable energy innovators. Luckily for Fitch, he had friends in the right places, one of those being Boston’s Harpoon Brewery. Fitch, a home brewer himself, knew firsthand how much waste beer production creates. Harpoon let him come in and analyze its operations, allowing him to build a model of its energy use and output—and to begin brewing up ideas about how the organic waste produced in the system could be converted to renewable energy.
“While it’s quirky and cute, it’s also a good business model,” says Fitch, who has his bachelor’s and master’s degrees in mechanical engineering from MIT and a decade’s worth of experience at startups in industries as diverse as biotech, sports equipment, and software under his belt. “The beer brewing industry is the best marketing industry in the world,” he explains. Fitch’s aim is for his company, Arlington, MA-based PurposeEnergy, to excel in the beer market, and then let its first customers become the startup’s loudest advocates as it expands into other industries.
Brewing and bottling beer creates organic byproducts at almost every step of the process, from spent grain and yeast to protein deposits. The resulting waste is mostly water with a high concentration of solids, which companies have to pay to transport offsite to treatment facilities that charge by the pound to make the water safe enough for disposal.
PurposeEnergy, incorporated in 2007, has come up with system that uses a process called anaerobic digestion to turn the byproducts from brewing into renewable fuels. Installed on-site at a brewery, the “PurposeEnergy Biogas Facility” would convert much of the organic waste into methane, the main component of the natural gas that most breweries use to fuel their plants. In doing so, it would cut costs for energy and byproduct remediation by about 40 percent at its first brewery partner, according to Fitch, PurposeEnergy’s CEO. Fitch developed the technique as a hybrid of a few different anaerobic digester methods mostly used in farming, a world that Fitch is familiar with, having grown up in Wyoming.
Fitch has initially sought to market PurposeEnergy’s technology to New England breweries that produce at least 50,000 barrels of beer a year, a volume greater than what the smaller microbreweries make but less than what the Anheuser-Busch-sized giants churn out. Harpoon itself couldn’t go with the PurposeEnergy system because of real estate restrictions, Fitch says. The company’s pilot project is at Magic Hat’s Vermont brewery and will cost about $3 million in its first phase, Fitch says. The startup has planned a later phase of the project to accommodate Magic Hat’s plans to increase its beer production from about 150,000 barrels a year to 400,000 barrels a year in 2013.
PurposeEnergy fully owns the facility it is building at Magic Hat, and will pay the brewery a token $1 annual rent for the land. For its part, Magic Hat will pay Purpose market rate for methane and byproduct remediation, reaping savings by avoiding the costly organic loading fee typically charged by a municipal water treatment facility. Purpose is scheduled to complete the first phase of the Magic Hat project this May. Fitch says the startup will be profitable once the Vermont project gets to full scale, or when a second project is online.
PurposeEnergy has raised more than $2 million in equity-based financing since its launch nearly three years ago, including $415,000 it raised towards a $750,000 round in December. Most of the financing comes from individuals Fitch describes as “uber-angels,” many of whom are entrepreneurs themselves. The startup’s first investment came from a woman who Fitch volunteered alongside at a church soup kitchen for years. Fitch said she asked him if he had started the business that he had been talking about for so long, and offered a $20,000 investment, only asking in return that he do the same for another startup once his became successful. Fitch used the money to get a lawyer, incorporate the company, and establish a corporate bank account. He started meeting with Magic Hat soon thereafter.
PurposeEnergy has around seven full-time employees, including those who work those hours on contract. Fitch works out of his home in Arlington, where he recently moved offices from the “dungeon” (basement) to the “penthouse” (upstairs guest bedroom). He’s working on targeting his next larger set of potential brewery customers, which includes Boston’s Sam Adams, as well as Sierra Nevada, New Belgium, and Yuengling.
Once PurposeEnergy captures the attention of beer companies, it plans to expand its efforts to other industrial and manufacturing sectors. Because the startup’s technique hinges on a large output of organic solid waste, Fitch says it will most likely stay in the food and beverage production spaces. “The beer piece is such a small sliver of value that we can provide. There’s huge opportunity worldwide in helping people be more efficient.”