Terravive, a Richmond-based maker of single-use compostable products, has experienced 600% annual growth over the last three years, its execs say, and is now at a crossroads. It must decide whether to continue with contract manufacturing or raise millions of dollars and build a manufacturing plant in the U.S.
The company makes compostable silverware, cups and takeout containers. It sells mostly to wholesalers, universities and large organizations and has seen a huge increase in demand as people have become more environmentally focused. As a result, cities across the country are recruiting the company and trying to get it to locate a manufacturing facility.
“We have been courted by a lot of different cities because of the explosive growth that we’ve seen over the last couple of years,” said Julianna Keeling, Terravive founder and CEO. “Austin [Texas] has been courting us. Pittsburgh has been courting. Other cities across the United States have been courting us.”
Keeling started Terravive in 2015 while still a student at Washington & Lee University. She added Joe Swider as a partner three years ago. He serves at the vice president and chief operations officer. Swider has a background as an entrepreneur and has helped guide the company’s growth.
Terravive contracts out manufacturing its products at 16 sites across the country. Swider said the contract manufacturing served the company well during the pandemic. But during the shutdown, the needs of Terravive’s customers changed. The requirements then changed as the world opened back up and changed again as life has returned to normal. The contract manufacturing gave Terravive flexibility during uncertain times.
So far, the company has not raised any money and has grown through cash flow and traditional banking relationships. Swider is unsure about raising $100 million to build a plant, but he knows that it might need to bring in outside money at some point, especially if it builds a production facility.
“Right now, we are going to last as long as we can with our cash flow and banking relationships,” Swider said.
He said one idea is to raise outside money and purchase competitors to grow the business. But both Keeling and Swider emphasized nothing is going to happen in the short term.
“No decisions have been made, everything is on the table,” Swider said.
In the short term, the company is looking to develop new products. Last year, Terravive was awarded a $72,778 grant from the Virginia Innovation Partnership Corp. for research and development. The company has a research and development operation in Pittsburgh and wants to expand on the 72 products its already manufacturers.
One of the newest items is a clear, compostable bag similar to a sandwich bag. The product breaks down into soil within three to six months unlike plastic.
Keeling emphasized that the company has no plans to move the headquarters out of Richmond. It employs 10 people and estimates about 1,000 people are employed through its contract manufacturing operations. She was not sure about Richmond as the location for the manufacturing facility. The operation needs to be located closer to the source material for the products, and that is agriculture areas that grow sugar cane and corn.
The partners declined to disclose revenue numbers, but said they expect triple-digit growth to continue. A lot of compostable material is manufactured in China, and the supply chain challenges have pushed companies to purchase made-in-America products.
The company ships products around the globe and sees a lot of potential in Europe. The region has pushed initiatives to reduce plastics and other nonbiodegradable products.
“We know what we need to do to accelerate the growth,” Swider said.
