Mendota Heights company’s approach turns 32,000 restaurants’ cooking oil into biofuel
Restaurant Technologies in Mendota Heights sells bulk cooking oil to more than 32,000 commercial kitchens across the country.
And that’s just the start of an increasingly green economic and environmental journey.
Restaurant Technologies (RTI) filters and monitors the oil online until it is time to collect it for sale as biodiesel feedstock.
Turnkey, technology-driven approach for RTI has driven operating income, before interest and taxes, growth of 25% per year since 2019. Revenues were approximately $650 million in 2021, increasing to a compound annual rate of 11% over the three-year period that included the pandemic.
With 17% customer growth, that’s an enviable scorecard.
“Restaurant Technologies has built a foundation to support better, more sustainable business practices,” said Jeff Kiesel, chief executive since 2005. “We’re also beating our numbers. We’re looking forward to… our next stage of growth.”
In February, Goldman Sachs Asset Management, majority shareholder since 2019, agreed to sell RTI for an unspecified amount to ECP, which focuses on investments in renewable energy and environmental sustainability. Continental Grain, which already has a stake in RTI, and Enlightened Hospitality Investments, an affiliate of Danny Meyer’s Union Square Hospitality group, are also investors in the deal.
It is the fifth time since Kiesel became CEO that a private equity deal has been struck.
RTI was once a struggling subsidiary of a restaurant. It now employs 1,150 workers in an operation that handles nearly 300 million gallons of oil annually.
The oil is eventually sold to biofuel refiners who blend it with petroleum to produce low-emission diesel fuel for trucks.
The cycle solves a worker safety and environmental problem that has too often resulted in clogged ditches or sewer systems, with a profitable business solution, thanks in part to tax credit incentives.
RTI is also part of a local renewable fuels industry that is growing faster than the oil market. And get noticed.
For example, Chevron, the huge oil and gas giant, is buying Renewable Energy Group of Iowa, RTI’s first used oil buyer, for $3 billion in cash.
RTI’s research indicates that its contactless delivery and collection process, which uses custom trucks and hoses, results in a fuel feedstock that emits 86% less greenhouse gases during refining than petroleum. . RTI also eliminated 4.8 million cubic feet of landfill waste because it does not use plastic containers or other materials to distribute its oil.
Kiesel, 61, said ECP will help RTI pursue its emerging “ESG journey” which focuses on environmental, social and ethical governance.
Increasingly, research shows that companies that are more successful because of their employees, other stakeholders, and the environment have greater long-term financial success.
“We were extremely impressed with [RTI’s] market leader in providing kitchen automation solutions, anchored by its proprietary closed-loop oil management systems and extensive network of depots across the United States,” said Tyler Reeder, Managing Partner of ‘ECP, in a prepared statement.
Mark Leavitt, managing partner of Enlightened Hospitality, cited RTI’s track record as a good employer and innovator in environmental and safety matters.
About 850 of RTI’s 1,150 workers work in field operations. These jobs, including technicians, truck drivers, and warehouse workers, start at $18 to $30 per hour, plus benefits.
Kiesel credits RTI’s success to an excellent workforce that provides cost-effective service that takes the hassle out of handling hot oil for kitchen management.
Alissa Partee, RTI’s Director of Human Resources, and Kiesel said RTI’s workforce and managers reflect the country’s growing diversity – and point to it as part of RTI’s recipe for success. About a third of employees are people of color, and their promotions are happening at a slightly higher rate.
Turnover is low with up to 85% annual worker retention. Nearly 40% of new workers come from employee referrals, a high rate.
In the first year of COVID-19, when many restaurants and institutional kitchens closed, only 250 RTI field workers were laid off, some volunteers. Each depot worked out flexible weekly schedules customized by employees, and RTI paid everyone for 32 hours. The company also coordinated with state unemployment offices to cover the eight-hour difference for many workers who would otherwise have been laid off.
“We have great leaders and front-line employees,” Kiesel said. “We have met our personnel requirements, our customers’ requirements and our financial requirements.”