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Brett Richardson and Greg Williams won $25,000 to start their Portland food waste-composting business, and fill a recycling need as well.

Greg Williams and Brett Richardson thought they would put their nearly completed graduate degrees to work in planning or public-policy careers.

Instead, they're jumping into the waste disposal business.

Williams and Richardson, students at the University of Southern Maine's Muskie School of Public Service, plan to turn food waste from Portland's restaurants and other institutions into organic compost for lawns and gardens.

Their idea for a new business, Organic Alchemy Composting, won the 2009 USM Student Business Plan Competition, which includes a $10,000 cash prize and $15,000 in consulting services to help get the business off the ground.

The idea also is generating enthusiasm in the city's restaurants, which now typically put vegetable peelings and uneaten food in the trash because there is no local compost business to recycle it.

The grad students said they developed the plan in economics class after Williams read about similar operations in other cities.

"It's happening all over the country," he said.

With about 230 restaurants in Portland, Richardson said, "it's a strong market here."

The compost business plan was one of 33 proposals submitted for the USM prize by teams of college students around the state.

Past winners, along with entries that did not win, have led to patents and a variety of businesses. Another finalist this year, for example, created a mobile dental office -- Tooth Protectors -- that is already up and running, according to university officials.

"This is not an academic exercise. The winning team has to actually launch within one year," said Valarie Lamont, director of USM's Center for Entrepreneurship.

"One thing that made Organic Alchemy stand out was that it was a great example of a sort of unmet need. They were able to demonstrate that the business had a high degree of viability," said Richard Bilodeau, an adjunct business professor and the competition's director.

Maine has a number of a commercial composting operations that recycle organic wastes, and they primarily serve large food processors or farms. Portland once had a service that collected wastes from restaurants for a fee, but it went out of business years ago, said Colleen Kelley, owner of Silly's Restaurant on Washington Avenue.

"I had to go back to the traditional trash," said Kelley.

Given that the small restaurant can generate six barrels of vegetable peels and other food waste each week, that's a significant cost and a big waste, she said.

Kelley is eager to supply the new company with raw material.

"I'll make it happen on our end," she said. "It's the right thing to do."

The idea should help fill a long-standing hole in the state's recycling effort, said Mark King, a composting expert with the Maine Department of Environmental Protection and an adviser to the new entrepreneurs.

"If the state's ever going to reach its mandated goal of 50 percent recycling, you've got to pull the organics out of the waste stream," he said.

Williams and Richardson plan to do regular pickups around the city, charging restaurants and other businesses slightly less than it costs to dispose of the waste in the traditional trash.

They plan to set up a composting operation outside the city, but close enough to minimize their driving distances and keep costs down. The process will convert the food waste into a soil additive that can be sold to landscapers, gardeners and farmers.

Given the strong demand, the whole operation could start this summer, they said.

The grad students have learned a lot about business during the past several months, and they soon will take a course in composting to learn more about the scientific end of the enterprise.

They said they are hoping to influence public policy and behavior by making food waste as easy to recycle as tin cans.

"It's the next step in the waste...