2016 Leadership award winner for Vision

Nikhil Arora and Alejandro Velez

Back to the Roots
2016
Vision

These two entrepreneurs who met each other in college have not only created an unusual and thriving mushroom business, but are spreading the word with their home mushroom growing kits.

Inspiration

“One sentence, one moment changed our lives,” says Nikhil Arora of how he and Alejandro Velez founded their company, Back to the Roots. In 2009, the two men were in their last semester of college at the University of California, Berkeley, ready to commence careers in consulting and investment banking, respectively. A professor in a business ethics class was lecturing on sustainable ideas and touched on how mushrooms can be grown in recycled coffee grounds. He went on to address other topics but Arora and Velez had stopped listening, both of them transfixed. Mushrooms can be grown in coffee grounds?

Even though they had shared classrooms for the past four years, Arora and Velez, now 28, had never spoken to each other. Separately, they researched the idea and both emailed the professor to ask for more details. He told them they should connect.

Reconnecting people with real food became their mission. Arora and Velez decided to team up, watching ecology videos and growing test buckets of mushrooms in Velez’s fraternity’s kitchen using coffee grounds they’d scrounged. They experimented with air flow, light, water, and temperature.

“Nine out of 10 buckets were contaminated and nasty,” Arora says. “But one had a beautiful crop of oyster mushrooms. Why?”

They didn’t know the answer at the time, but they took that one bucket to one of the best restaurants in Berkeley, Chez Panisse. They had never eaten at the legendary restaurant, nor made an appointment, but Alice Waters happened to be there. Her chef, Cal Peternell, cooked some of their mushrooms up and was delighted with the flavor. So were Arora and Velez, who hadn’t tasted their mushrooms until that point.

“They signed us up on the spot,” Arora says.

That same day, Whole Foods in Berkeley was intrigued enough to commit as well.

Two weeks before graduation, Arora and Velez got a $5,000 grant from the university. They used it to buy a $1,000 van from Craigslist and rent a 100-square-foot room in a warehouse out by the Oakland airport in order to grow more mushrooms.

“Alex and I hit it off so much,” Arora says, “we’re like brothers. We could never have done this by ourselves. We had no clue what we were doing early on. It was serendipity and luck.” They figured out how that one bucket of mushrooms had turned out right and within their first year of business, they were producing 500 pounds per week.

Impact

In 2010, Back to the Roots expanded to a 5,000-square-foot space and began inviting people in for farm tours. Visitors were so fascinated about growing mushrooms from coffee grounds that they asked if they could take some home and try it themselves.

“It was the biggest turning point, realizing this movement could go beyond a five- to 10-mile radius,” Arora says. Instead of just selling mushrooms through restaurants, farmers markets, and local stores, they developed a grow-your-own model, Organic Mushroom Farm kits, that now sell in more than 14,000 outlets nationwide.

Their principles of sustainability have kept pace with growth. Arora says the company was upscaling 3.5 million pounds of used coffee grounds by 2013 and transitioned to using agricultural waste like corn and rice hulls, wheat bran, and sawdust. Packaging is 100-percent recyclable. Additional Back to the Roots products are proving popular, including ready-to-eat stone-ground cereals, organic breakfast toppers like Dates, Coconut & Chia Seeds, and Garden-in-a-Can kits to grow organic basil and cilantro.

“The most exciting part of our whole drive is to connect kids to where their food comes from,” Arora says. Back to the Roots donates a kit to a classroom each time a customer uploads a photo of one of their products on social media. It’s called the “Grow One, Give One” campaign. So far they have donated 10,000 growing kits to schools; at more than 2,000 elementary schools across the country the kits have become part of the curriculum.

The Future

“We want to reach people who aren’t foodies,” Arora says. “We want our brand to be accessible, fun, and playful, to build it into the Pixar of food, something that a four-year-old and a 40-year-old can enjoy.” To that end, a new product is Garden-in-a-Jar, designed so kids can visibly see roots grow. He added, “There’s nothing more personal than what people put into their bodies and we believe in radical transparency. We give away our formula on our packaging because you shouldn’t have to be a food scientist to read a label.”

By the end of 2015, Back to the Roots’ revenues were expected to reach $8 million, up from $4.6 million the year before. “We want to keep our food super simple, but use technology to distribute it,” Arora says. “Food should remain in the kitchen, not in labs.”