“Sorters in the recycling plants, and in the waste hauling business, are among some of the most dangerous jobs, and filled by a lot of workers who are least able to stick up for their rights, either because they’re from immigrant populations, or are low-income folks who rely on their jobs and can’t speak out”
– Lor Holmes, General Manager
For this reason, Josefina Luna and her team founded CERO, an immigrant-owned worker cooperative company that provides business-to-business composting services. LEAF participated in their direct public offering in 2014 and in 2015, CERO commenced operations. They began providing services including pick-up and delivery of specially marked food waste bins “carts”, education and training in the process of food waste separation, and disposal of food waste in processing sites such as organic composting businesses and transfer stations.
In 2018, CERO reached out to LEAF to find a solution to its struggling balance sheet. Its lenders were concerned about the cooperative’s ability to continue as it had limited borrowing capacity and was unable to articulate a strategy to cash flow breakeven. Some of the lenders were considering “pulling the plug” and liquidating the business, a tragic conclusion to many years of hard work by the staff of CERO; a staff of 10 workers who relied on income from the cooperative to support their households.
LEAF staff analyzed the company’s operations and financials and determined that the company had in fact achieved sales growth rates that were consistently above the industry average; the company had a commercial strategy that has shown demonstrable success. LEAF staff also analyzed the company’s cost structure and documented that the company’s costs per unit had been declining since inception, which is an indication of a strong industrial culture. LEAF presented those conclusions to the company and to its lenders and convinced them to provide a bridge loan to allow the company to evaluate its strategic alternatives. LEAF’s lending department also participated, closing $25,000 in bridge financing in January 2019.
The intervention provided by our departments allowed the company to continue its operations on stronger footing.
CERO has continued to grow. In April of 2020, we closed a loan of $30,000 to help them purchase another truck. In addition, our Technical Assistance program director Amine Benali worked closely with Boston University and Northeastern University advocating for local and more diverse procurement and helping them identify qualified local vendors. LEAF supported CERO through the universities’ RFP process. As a result of these efforts and those of other local stakeholders, the company secured transformational contracts with both universities. The universities have expressed the desire to partner with LEAF to develop learning programs that engage the students in the procurement diversity efforts.
Since then, they have established themselves as a leader in the cooperative world in Boston and have been recognized by the Boston Herald and Next City for bringing social and economic justice by working towards building a green economy. To date, CERO has diverted over 10,264,202 pounds of food waste from landfills and will continue to do so in the years to come.
Our work with CERO was made possible with the generous support of investors. If you would like to help us assist cooperatives like CERO, please consider investing in LEAF. You can find details on the Investors tab on our website. If you are a member of a cooperative and are interested in financing your project, please see the Lending tab or if you are interested in the Technical Assistance services we provided CERO, please visit our Elevate Small Business Program’s website.
References:
Lim, A. (2021, June 18). How this immigrant worker center entered the business of organic waste management. GreenBiz Group. other. Retrieved October 26, 2022, from https://www.greenbiz.com/article/how-immigrant-worker-center-entered-business-organic-waste-management.