In the US, as much as 56% of paper and cardboard ends up in landfills (Bloomberg), largely due to reduced recyclability caused by plastic and wax coatings. Earthodic offers a transformative solution to this issue, aiming to improve recycling rates significantly. The company aims to replace the pervasive fossil-fuel-based plastic and wax coatings on paper products, enabling packaging materials to be fully repulpable and compostable. This innovation not only addresses critical environmental concerns but also provides a cost-effective alternative, positioning Earthodic as a leading upstart in the sustainable packaging industry.
Branch Venture Group is thrilled to support Earthodic as they further develop their suite of coating solutions and expand their team. Here are three key reasons why we see Earthodic as a promising investment opportunity.
Impressive product attributes and deep IP, validated by regulators and industry leaders
Earthodic coatings deliver on key attributes sought after by industry leaders looking for more sustainable and cost effective coating solutions. Earthodic coatings are 100% bio-based, recyclable, compostable, and “circular,” which means the materials are reused and recycled to minimize waste. Derived from lignin, a byproduct of the paper and pulp manufacturing process, this innovative coating embodies the principles of a circular economy, where materials are reused and recycled to minimize waste. Its recyclable nature is underscored by a 97.1% fiber yield in recycling, minimizing waste and maximizing resource efficiency. Moreover, Earthodic’s product can be composted if recycling isn't feasible, preventing landfill contamination.
The company has deep intellectual property, and currently holds several patents, including a granted patent in key geographies around the world. Early trials with key global packaging producers have provided strong validation for Earthodic. Feedback from major industry players highlights the coating's robust performance in critical areas such as water resistance, wet strength, and oil and grease resistance. Furthermore, Earthodic coatings can be seamlessly integrated into existing supply chains without requiring equipment changes, making it a practical and cost-effective replacement for traditional plastic coatings.
Strong tailwinds from market dynamics shaping future of packaging
The market in which Earthodic operates is poised for significant growth and heightened interest. The global sustainable packaging industry is projected to expand from its current level of $271 billion USD to $393 billion USD by 2028, with coated paperboard alone forecasted to reach $60 billion by 2026. Earthodic's innovative coating formulation not only helps the packaging industry meet this increasing demand but also offers a 100% sustainable solution by replacing wax and plastic coated alternatives. President Biden's recent emphasis on bioplastics highlights a shifting regulatory landscape towards sustainability, reflecting broader acceptance and potential regulatory support. Additionally, the Environmental Protection Agency aims to increase recycling rates to 50% by 2030, up from the current 32%, further supporting Earthodic's position as a key player enhancing recyclability in the burgeoning sustainable packaging sector. This positions Earthodic to drive both environmental and economic benefits, leveraging a favorable regulatory environment.
Experienced team and ability to tap into the global supply chain of lignin.
Earthodic consists of a seasoned team with a proven track record of success together, as seen in feedback from customers and prior business relations. The team boasts material science, biotech/pharmaceutical, finance, operations and patent attorney expertise with direct experience in venture capital, lignin technology, and advanced material consulting. With a robust lignin supply chain featuring compatible feed stocks worldwide, Earthodic mitigates operational risks and reduces exposure to the impacts of climate change and deforestation. Earthodic is actively engaging small producers and expects commercial orders in Q4 2024, poised for significant market expansion and leadership in sustainable packaging solutions.
Want to Learn More About Earthodic?
We’re thrilled to support Earthodic’s next phase of growth as they expand their team and further develop their products. For more information about the company visit their website: Earthodic and learn more about their innovations.
If you’re interested in learning more about Branch Venture Group, please reference our Investor page or reach out to info@branchventuregroup.com.
Links:
EPA’s 2020 National Recycling Goal
The US Isn’t Recycling Enough Cardboard to Keep Up with E-Commerce - Bloomberg
EU: stats about current recycling etc: Packaging waste statistics - Statistics Explained (europa.eu)