Industry: Food & Beverage
Products: Paper straws
Co-founder Morgan Kelle is looking to solve a big problem with nimble manufacturing and room to grow.
The numbers are staggering: U.S. consumers use hundreds of millions of plastic straws every day. Most of them are dumped in a landfill, and some end up in the ocean.
"I was looking for an alternative for myself," says Kelle. "When was the last time you went to a restaurant, ordered a soda, and didn't get a straw with it?"
Most substitutes to plastic were expensive or unhygienic, or both. Kelle researched the issue and found "the best alternative" to the status quo of plastic was the recyclable paper straw, made with sustainably sourced materials. After working in business development for a national beverage brand, he launched the company last year.
As plastic straws are cheaper and the lead times shorter, Kelle worked to build a manufacturing model for paper straws that addressed both barriers. "We invested in full automated machines to lower the price and cut lead times," he says.
Six people work in production at the company's 10,000-square-foot facility near downtown L.A. The catalog includes 7.75-inch white straws as well as 5.5-inch black bar straws. The paper is sourced from U.S. mills and is "fully recyclable," says Kelle. "The process is eco-friendly. We're 100 percent chlorine-free."
The company worked with an undisclosed manufacturer to make the semi-custom equipment. The current capacity is 10 million straws a week, says Kelle. "We're hoping for 50 million straws a week."
The price is 2.5 cents per straw for orders of 10,000 straws or more -- Kelle says that's about half of domestic competitors -- and the minimum order is 6,000. "We're working very hard to match the price of plastic straws," says Kelle. "Our goal is to make paper straws affordable. Our second goal is to match the price of plastic straws."
The lead time is just a week. "Other paper straw manufacturers in the U.S. have a lead time of 15 or 16 weeks," says Kelle.
U.S. Paper Straw is focusing on California-based restaurants and bars initially, but there are some big national fish that have announced a phase-out of plastic straws: "Starbucks has announced they want to ban plastic straws," says Kelle. "McDonald's has announced the same thing." That translates into billions fewer plastic straws.
Kelle says he hopes to supply smaller chains with the same idea. "We're giving them the solution to do the switch," he says. "It's really like an investment. You're investing in something good."
Challenges: Educating the market. The sheer volume of straw waste has received a lot of media attention recently, and that has helped. "It's becoming easier," says Kelle.
Opportunities: Growth in the $3 billion U.S. straw market, with specific opportunities in cities with anti-plastic straw ordinances. "The laws are changing city by city," notes Kelle. Both San Francisco and Seattle have announced plans to phase out plastic straws. "Once people get a good alternative to plastic, I think more cities will ban them.
Needs: "I think we need more visibility to show that we have a real solution," says Kelle, noting that the marketing involves a mix of digital and SEO strategies, sales reps, and strategic partnerships. "We're reaching out to organizations that protect the oceans to partner with them.