Food waste is gross. It’s also expensive, incredibly bad for the environment, and a logistical nightmare that keeps grocery executives up at night. You’ve probably seen the back of a grocery store—the stacks of pallets, the humming compactors, and the occasional smell of something past its prime. This is where Divert lives. They aren't just another recycling company. Honestly, they’ve basically re-engineered how the biggest names in retail handle the stuff they can’t sell.
Most people don’t think about what happens to a bruised apple or a dented can of soup. They assume it goes to a landfill. In many cases, they’re right. But companies like Divert are changing that math by treating wasted food as a data point rather than just trash. Founded in 2007 by Ryan Begin and Nick Pascoe, the company has spent nearly two decades building a massive infrastructure to intercept food before it rots in a hole in the ground.
How Divert Actually Solves the Grocery Problem
Retailers are in a tough spot. If a shelf is empty, they lose a sale. If it’s too full, they throw away money. It’s a delicate balance that usually results in a lot of "shrink." Divert enters the picture by placing specialized technology directly inside the backrooms of retailers like Kroger, Target, and CVS. They don’t just haul away the waste; they track it.
Imagine a store associate tossing a bag of expired salad into a bin. In a traditional setup, that salad vanishes into a dumpster. With the Divert system, that data is captured. The retailer learns exactly what is being wasted and why. This isn't just about being "green." It’s about the bottom line. If a store realizes they are throwing away 40% of their organic spinach every Tuesday, they stop ordering so much spinach. It’s simple, yet for decades, nobody was doing it at scale.
The scale is actually kind of wild when you look at the numbers. They currently work with over 5,000 retail locations. That’s a lot of data. And once the food is actually collected, it doesn't just sit there. It goes to one of their sophisticated processing facilities where it gets turned into something useful.
Turning Rotten Tomatoes into Renewable Energy
This is the part that feels like science fiction but is actually just chemistry. Divert uses a process called anaerobic digestion. Basically, they put the organic waste into giant, oxygen-free tanks filled with bacteria. These bacteria "eat" the food waste and produce biogas.
That gas can be refined into Renewable Natural Gas (RNG). It’s a circular economy in the truest sense. The truck that delivers the groceries might eventually be powered by the fuel created from the food the store couldn't sell. In 2023, the company broke ground on a massive facility in Longview, Washington, designed to process 100,000 tons of wasted food per year. That one facility alone can significantly reduce a region's carbon footprint.
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But it's not all about energy.
Before the food ever reaches a digester, Divert helps retailers prioritize donation. If the food is still edible, it goes to food banks. Only the stuff that is truly unfit for human consumption—the slimy, the moldy, the expired—gets turned into fuel. This hierarchy is crucial. It’s a nuanced approach that acknowledges we should feed people first and power grids second.
Why Investors Are Betting Billions on Food Waste
You might wonder why a company focused on "trash" is worth so much. In early 2023, Divert secured a massive $1 billion infrastructure development agreement with Enbridge, one of North America’s largest energy companies. That’s a "B" with nine zeros.
Why the interest? Two words: Regulatory pressure.
States like California, Massachusetts, and Washington have passed strict laws banning businesses from sending organic waste to landfills. Landfills are one of the leading sources of methane emissions. Methane is significantly more potent than CO2 when it comes to trapping heat in the atmosphere. By diverting food waste, these companies are helping retailers stay compliant with the law while also meeting their ESG (Environmental, Social, and Governance) goals.
- California’s SB 1383 is a prime example. It requires a 75% reduction in organic waste disposal by 2025.
- Massachusetts has a commercial food waste ban for any business producing more than a half-ton of waste per week.
Divert isn't just a "feel-good" story; it’s a compliance engine. They provide the paper trail that auditors love. When a massive corporation has to prove to the state—or its shareholders—that it isn't destroying the planet, they point to their partnership with Divert.
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The Reality of "Clean" Waste
There’s a misconception that this process is easy. It isn't. One of the biggest hurdles is "de-packaging." Think about it. A grocery store doesn't just have a pile of loose strawberries. It has strawberries in plastic clamshells. It has milk in jugs. It has soup in cans.
Traditional composting fails here because you can't have plastic bits in your soil. Divert built proprietary technology to strip the packaging away from the food automatically. Their machines can take a pallet of expired yogurt—cups and all—and separate the plastic from the dairy with incredible precision. The plastic is sent for specialized recycling, and the organic slurry goes to the digester.
This level of engineering is what separates them from a local compost haulers. They are handling industrial volumes that would overwhelm a standard city's infrastructure.
What Most People Get Wrong About Food Waste
A common myth is that food waste is mostly a consumer problem. You know, the "finish your dinner" guilt. While it’s true that households throw away a lot, the retail and manufacturing sectors are where the massive, concentrated volumes exist.
If you want to move the needle on climate change quickly, you don't go door-to-door asking people to compost their banana peels. You go to the distribution centers. You go to the grocery hubs. By focusing on the "middle" of the supply chain, Divert achieves a massive impact with relatively few points of contact.
Also, people think "renewable gas" is a pipe dream. It’s not. It’s already flowing through pipes. Companies like Enbridge are looking for ways to decarbonize their gas grids, and RNG from food waste is one of the most stable sources available. It doesn't rely on the sun shining or the wind blowing; it relies on the fact that humans will always produce waste.
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The Future of Divert and Your Local Grocery Store
As we look toward the end of the decade, the presence of Divert and its competitors will likely become invisible yet ubiquitous. You won't see their name on the front of the store, but their sensors will be in the back.
The company is expanding rapidly, aiming to have a facility within 100 miles of 80% of the U.S. population. This proximity is key. Hauling heavy, wet food waste across the country is expensive and counterproductive (the fuel burned by the trucks would outweigh the carbon saved). Localized "clusters" of processing facilities are the only way to make the economics work.
Retailers are also starting to use Divert’s data to change their packaging. If the data shows that a certain type of plastic container is constantly breaking and causing waste, the retailer has the evidence to demand a change from the supplier. It’s a feedback loop that simply didn't exist ten years ago.
Actionable Insights for the Business-Minded
If you’re a business owner, an investor, or just someone tired of seeing waste, here is how the Divert model applies to the real world:
- Audit Your "Shrink" with Granular Data: Don't just track how much money you lost; track what it was and why it happened. Was it a storage issue? A cold-chain failure? An over-ordering error?
- Prioritize the Recovery Hierarchy: Always look to donate first. There are tax incentives for food donation that many businesses leave on the table.
- Invest in De-packaging: If you deal with waste, the separation of materials is where the value is unlocked. Contaminated waste is an expense; clean waste is a resource.
- Watch the Regulation: Even if your state doesn't have an organic waste ban yet, federal pressure is mounting. Getting ahead of these mandates is cheaper than scrambling to comply later.
- Look for Circular Partnerships: Think about your waste as someone else’s raw material. Whether it’s spent grain from a brewery going to a farm or old produce going to a digester, those partnerships reduce disposal fees.
The success of Divert proves that the "green" option doesn't have to be a charity case. It can be a multi-billion dollar infrastructure play that makes the entire food system more efficient. It’s about taking the things we usually ignore and turning them into something the world actually needs: data and power.