The explosion in e-commerce means Americans receive more home deliveries than ever and that trend shows no signs of slowing.
According to Statista, over 20 billion packages were delivered in the U.S. in 2020, which was an increase of 37 percent from 2019. The average American receives 21 home-delivered parcels each year, according to data from Packola.
At the same time home deliveries are proliferating around the world, there’s also increasing demand from consumers and companies for increased use of more sustainable materials. The convergence of those issues is helping fuel market opportunities for an innovative Minnesota company.
NewStarch Solutions, based in Plymouth, produces a range of sustainable, biodegradable packaging materials made from plant starches. NewStarch Solutions was founded in 2016 by three partner-owners, Dean Bartels, Matt Niles and Don Niles. Bartels and Matt Niles worked with starch at a previous company before starting their own venture.
“We saw the benefits of starch from a sustainability standpoint and wanted to start a company that would use it as the primary ingredient to create products to replace non-eco-friendly plastics while being competitively priced,” Bartels says.
Sustainable Solutions
Bartels says starch makes a good base material for their products because it is sustainable, plentiful, economically priced and comes from products grown regionally.
All of the NewStarch Solutions products start with resin.
“We blend starches together then run them through an extrusion process to form resin,” Bartels explains. “The resin is packaged in 2000-pound supersacks, then loaded on a container or semi-trailer 20 at a time and shipped to customers worldwide to make our finished products.”
Products derived from the resin include starch packing peanuts or loose fill. Packing peanuts are typically used for the protection and cushioning of fragile products.
“Traditional packing peanuts are made from polystyrene or Styrofoam, both of which are not good for the environment,” Bartels says. “Our packing peanuts are sustainable because they’re made from starch.”
NewStarch Solutions also produces starch spheres that Bartels says are similar to packing peanuts, but with a spherical shape. These spheres can be used in a range of products from stuffing in a dog chew toy to packaging solutions for shipping sheets of paper or film.
The newest product from NewStarch Solutions is a starch sheet with application ranging from medication delivery to food delivery. Boxes or envelopes can utilize the sheeting as it provides both protection and insulation.
“This is a huge market that is growing,” Bartels says. “It’s largely Styrofoam that lines these boxes, but with a focus on sustainability and the environment, consumers and companies are looking for an eco-friendly alternative. Our starch sheet provides this alternative at a cost that is competitive.”
NewStarch Solutions operates with a unique business model. In addition to providing companies with the resin to make the sheets, NewStarch Solutions also sells the equipment needed to make the sheets. They train customers on how to make the products and then provide parts and service agreements to keep the equipment running.
AURI Assistance
NewStarch Solutions enlisted the Agricultural Utilization Research Institute’s (AURI) help to develop the biodegradable starch sheet. AURI engineer Riley Gordon worked to help determine the process necessary for production. Gordon conducted various testing needs around product performance while the company tested the sheets for their insulative properties.
The market opportunities for biodegradable sheets that provide both protection and insulation is large and growing. “You can use the sheets for applications like shipping electronics, appliances, medical supplies or other things that need to be kept warm or cold,” Gordon says. “It could be interesting to see all the different markets that could open up with this type of product.”
“We worked with some large packaging companies that are very interested in their products,” Gordon says.
Gordon is also helping NewStarch Solutions navigate the process for becoming green certified. “Once they’re certified, they can then use the Biodegradable Products Institute logo,” Gordon explains. “Customers want that certification because it holds a lot of clout in the marketplace.”
“AURI has been instrumental in helping test our products for thermal insulation and cushioning,” Bartels states. “They also helped us with grants from the Minnesota Department of Agriculture and the Minnesota Corn Growers Association.”
Biobased Opportunity
Interest in biobased products is growing. AURI’s Executive Director Shannon Schlecht says the U.S. Department of Agriculture added 412 new companies to its BioPreferred certification program in 2021. To date, more than 3,300 companies from 49 countries have secured the BioPreferred certification.
“AURI sees a high degree of interest in biobased, renewable, non-plastic and lower carbon intensity products as well as circular approaches,” Schlecht says. “Packaging continues to be a high interest area for new innovation and NewStarch Solutions falls in the middle of these trend areas, leading me to believe that they and other Minnesota innovators in this space have a bright future if they are solving a consumer or industry problem with a biobased product.”
“The opportunity is global,” Bartels says. “The key is to make it cost competitive with the plastic-based products. When you have both sustainability and cost competitiveness, then you have businesses that are willing to invest time and money into this solution.”
Ag Innovator of the Year
Since 2002, AURI has recognized a Minnesota company or entrepreneur each year for its innovation and contributions to value-added agriculture through the Ag Innovator of the Year Award. AURI selected NewStarch Solutions as the recipient of the 2021 award.
“New Starch provides an innovative solution that is on point in terms of industry need and consumer trend,” Schlecht explains. “The gap they identified, and solution they explored to produce a biobased packaging material has tremendous potential and they have already seen early success with their efforts. E-commerce and packaging needs have accelerated in the last two years and are expected to grow, while consumer desires for sustainable products are also trending upward. This creates a huge opportunity for early innovators in this space to capitalize on these two trends to rapidly grow market share. It’s great to see agriculture-based starches move into these types of industrial products as an opportunity area that can grow in parallel with the increase in protein demand.”
“NewStarch Solutions is very innovative, and I like their business plan because they have the protection on the process to manufacture their products coupled with them making the resin pellets in one centralized location,” Gordon says. “They’re smart with their business plan, and I can see them growing due to the biobased products market growth in the next 5-10 years.”
Bartels says he appreciates the Ag Innovator of the Year award from AURI.
“It will be wonderful exposure for both organizations,” Bartels says. “We are a small company with limited resources. This will help gain exposure and reach markets and potential customers.”
Schlecht says it’s important to take the time to recognize the forward-thinking companies who have identified opportunities and are striving to pursue them.
“Minnesota is a great place for innovation. AURI has worked on over 1,800 client projects since it was formed in 1989,” Schlecht says. “Highlighting what is going on here to continue to drive innovation among the Minnesota ecosystem is a huge benefit to spur action from others with novel ideas. Recognizing innovation provides a chance to spotlight what is happening here versus other areas of the United States or world to provide insight into Minnesota ingenuity.”
