Califonia Bountiful

An idea takes root

Apr./May 2012 California Bountiful magazine

Entrepreneurs venture into urban mushroom farming and revitalizing communities.

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Nikhil Arora, top, and Alejandro Velez developed mushroom gardens in a box, a business that also nourishes their local community.

Blame it on a business ethics class. During their final months at the University of California, Berkeley, in 2009, Nikhil Arora and Alejandro Velez attended a lecture that changed the course of their careers—and their lives.

"We both ended up going to class, which was a big deal. We had already signed job offers," Velez said.

He was headed to New York City for a finance job and Arora had accepted a consulting position in San Francisco. But a class discussion about business efficiency got their attention.

"Most business students wait until their last semester to take this class and very few would take it if they didn't have to," said Professor Alan Ross of the Haas School of Business at UC Berkeley. "I try to make it interesting and bring in guest speakers, and this speaker made the comment about how one could grow mushrooms entirely on recycled coffee grounds."

Velez and Arora were equally inspired by the idea.

"We both emailed Professor Ross separately and he said, 'You two should connect,'" Arora recalled.

Abelino Lopez shovels recycled coffee grounds.

Having never met in the large class, Arora and Velez became fast friends over the concept of growing mushrooms in recycled coffee grounds and decided to give it a try in Velez's fraternity kitchen.

"We literally had ten paint buckets of mushroom seeds in his fraternity kitchen closet and local coffee shop grounds," Arora said. "(We) threw it together, had no clue what we were doing."

The result?

"Nine of the ten buckets were completely contaminated with mold," Arora said. "But one bucket had big, beautiful gourmet mushrooms."

Armed with enthusiasm, but afraid to eat the mushrooms, they made a bold move and headed to Berkeley restaurant Chez Panisse to ask the chef about the fungi. He sautéed a batch and declared them delicious.

Velez and Arora took another courageous step.

"We walked into Whole Foods with the same bucket and talked to the first guy we saw in produce and said, 'Hey, we are trying to grow mushrooms on coffee grounds,'" Arora recalled.

The grocery company was interested in the idea of growing food on what was once waste and encouraged them to move forward. Suddenly, Velez and Arora were full-time urban mushroom farmers.

Employees package pressed grounds in Back to the Roots' Oakland warehouse.

"The fact that they followed through with the idea shows how exceptional they are," Ross said.

Their enthusiasm earned them a $5,000 grant for social innovation from the UC Berkeley chancellor and their partnership supplied them with motivation.

"We both pushed each other," Velez said. "The first year was day in and day out of trying, trying, trying. It was all trial and error."

Arora agreed: "Neither of us by ourself could do this."

With the award money, they rented a 300-square-foot space in Oakland and tirelessly researched, tested and grew mushrooms.

Step one: Acquire mushroom spawn (the mushroom farmer's equivalent of seed). They located a supplier in a nearby county to provide oyster mushroom strains.

"We initially were looking at growing all sorts of gourmet mushrooms, but we found that oyster mushrooms are not only super tasty, they grow the easiest and the fastest," Arora said.

Step two: Collect coffee grounds, which are rich in cellulose and a nice environment for fungi growth. After brewing at high temperature, the grounds are also pasteurized.

Arora and Velez simply started showing up at Peet's coffee shops in the Bay Area and asking for their grounds.

With the mushroom spawn added to the grounds, the kits are now ready to be boxed.

"It was a win-win," Velez said. "We had already noticed that they hated dealing with the coffee grounds."

To top it off, Peet's decided to pay Velez and Arora instead of a waste-management firm to dispose of their coffee grounds. Once back at their warehouse, all liquid had to be removed from the grounds.

"We would be straining the coffee grounds in colanders thinking we were crazy," Velez laughed.

But all the work was worth it. Velez and Arora routinely got large crops of oyster mushrooms in as little as 10 days. At this point, they were selling the mushrooms wholesale to Whole Foods and other retailers. It dawned on them that if they could grow mushrooms, anybody could.

Arora and Velez say teamwork is the secret to their company's success.

"We knew nothing about it, so we could create kits for others who knew nothing about it," Velez said.

And so, the Back to the Roots mushroom kit was born. The brown cardboard boxes are now sold online and at more than 1,000 retailers (

Misting the kits twice a day encourages mushroom growth.

If you walk into Back to the Roots' 10,000-square-foot warehouse in Oakland–their sixth location to date–you are hit by the roasted aroma of coffee grounds. A machine now removes the liquid from recycled grounds, after which they are pressed to dry, packed in clear bags and set on ventilated racks. Next, a handful of oyster mushroom spawn is introduced into the coffee grounds.

In three weeks, the small bags go from a light and fluffy concoction to a dense, brick-like mass in which you can see the white mycelium, or vegetative part of the fungus, taking shape. At this point, the bags are resealed and placed into brown cardboard boxes where they remain dormant until the customer opens them. Once exposed to water (via misting) and light, the kits produce 1 1/2 pounds of oyster mushrooms.

But what to do with the company's waste byproduct?

As Arora put it: "What did two naïve entrepreneurs do who really didn't know what to do? We put it on Craigslist."

Within two weeks, they had a two-month back order on what proved to be a premium soil amendment that they now market as well.

Max Cadji, right, and Toveo Hill, far left, of Phat Beets Produce help Back to the Roots founders and employees spread their premium soil amendment at Dover Street Park in Oakland.

In the spirit of nourishing the community that has supported them, Back to the Roots donates soil amendment and mushroom kits to a wide variety of schools, organizations and community gardens—such as the one at Dover Street Park in Oakland, a few blocks from their warehouse, where 35 fruit trees blossom every spring and a variety of vegetables grow.

"We are trying to bring fresh produce to the community of Oakland," said Toveo Hill, a youth coordinator with Phat Beets Produce, a group that helps bring fresh produce to those in need (

"Families can come by and leave with a bag of groceries," added Max Cadji, another leader of Phat Beets.

In addition to providing local families with food, the Back to the Roots entrepreneurial experience has provided jobs to about two dozen people and given Arora and Velez a new appreciation for agriculture.

"You are making tangible products, tangible goods. It is very real," Velez said. "There is something that is being produced by someone, hands are touching it and jobs are being created. That is very, very exciting."

Ross adds that after 20 years of teaching thousands of students, it's rewarding to watch Arora and Velez follow their passion.

"These two guys really stand out as people who will make a difference," the professor said.

Mushrooms in three steps

The Back to the Roots mushroom kit is ready to harvest 10 days after initiating mushroom growth in the following three steps.

Step 1: Mushrooms thrive indoors and away from direct sunlight. Opening the box and cutting into the soil bag exposes the mixture to light and shocks the mushrooms.

Step 2: Misting twice a day serves as the second shock to the mushrooms—a signal to wake up and start growing.

Step 3: Repeating the process on the opposite side of the box will yield a total harvest of about 1 1/2 pounds of oyster mushrooms.


Jennifer Harrison


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