NAICS 325315 Quarterly Industry Report
Compost Manufacturing
Comprehensive industry research for valuation professionals, business owners, buyers, and lenders
NAICS Code: 325315Sector: 32Updated: Q1 2026
About This Report
This Fair Market Value industry report for NAICS 325315 delivers business owners, acquirers, and financial advisors data-driven valuation insights for the compost manufacturing sector, drawing on data from the U.S. Census Bureau[3] and EPA[6] organic waste diversion statistics. Additional data is drawn from Bureau of Labor Statistics[7].. The report aggregates transaction multiples, financial benchmarks, and market trends specific to NAICS 325315 establishments, supporting buy-sell agreements, succession planning, SBA-financed acquisitions, and litigation support engagements.
Industry Definition & Overview
Compost Manufacturing (NAICS 325315) encompasses establishments primarily engaged in manufacturing compost through the controlled aerobic biological decomposition and curing of biodegradable materials, including yard waste, food scraps, agricultural residuals, biosolids, and animal manure. According to the U.S. Census Bureau[3], the composting industry received its own distinct NAICS classification in the 2022 revision, reflecting the sector's growth into a meaningful manufacturing category as municipalities, food processors, and agricultural operations increasingly divert organic waste from landfills into compost production facilities operating across the country.
Compost products serve multiple end markets including agricultural soil amendments, landscaping and turf management, erosion control, stormwater management, and organic growing media. Large-scale composting operations process thousands of tons of feedstock annually using windrow turning, aerated static pile, and enclosed vessel composting technologies. The Bureau of Labor Statistics[4] identifies production roles including composting facility operators managing windrow turning and aeration systems, quality control technicians monitoring temperature profiles and maturity testing, heavy equipment operators handling feedstock receiving and product screening, and environmental compliance specialists overseeing odor management and leachate treatment systems at commercial composting facilities.
Per the SBA Office of Advocacy[5], the industry ranges from large municipal and regional composting facilities processing 100,000 or more tons of organic feedstock annually to smaller farm-based and community composting operations serving local markets. Revenue models vary from gate-fee-driven operations that charge tipping fees for organic waste acceptance to product-sales-driven businesses focused on premium bagged and bulk compost marketing to landscaping professionals and retail garden center customers.
What's Included in This Industry
- Valuation multiples benchmarked to commercial compost manufacturing operations
- Revenue and EBITDA trends for domestic composting facility operations
- SBA lending data and financing terms for NAICS 325315 businesses
- Comparable transaction data from recent composting company acquisitions
- Industry risk factors including feedstock supply, odor complaints, and permitting challenges
- Workforce composition and labor cost benchmarks for composting operations
- Regional market analysis covering key composting facility concentrations
- Capital expenditure benchmarks for windrow turners and screening equipment
- Growth projections tied to organic waste diversion mandates and soil health initiatives
- Owner compensation and discretionary earnings benchmarks
NAICS Classification Hierarchy
| Level | Description | Code |
|---|---|---|
| Subsector | Chemical Manufacturing | 325 |
| Industry Group | Pesticide, Fertilizer, and Other Agricultural Chemical Manufacturing | 3253 |
| NAICS Industry | Fertilizer and Compost Manufacturing | 32531 |
| National Industry | Compost Manufacturing | 325315 |
Related NAICS Codes
| Code | Description | Relationship |
|---|---|---|
| 562111 | Solid Waste Collection | Solid waste collection services delivering organic waste feedstocks including yard waste, food scraps, and source-separated organics to composting facilities |
| 562219 | Other Nonhazardous Waste Treatment and Disposal | Other nonhazardous waste treatment and disposal establishments operating organic waste processing facilities that overlap with composting facility operations |
| 325314 | Fertilizer (Mixing Only) Manufacturing | Fertilizer mixing operations purchasing compost and organic amendments for blending with synthetic fertilizers into soil conditioning and nutrient management products |
| 115210 | Support Activities for Animal Production | Support activities for animal production establishments generating manure feedstocks processed at composting facilities and purchasing finished compost for bedding |
| 561730 | Landscaping Services | Landscaping services purchasing bulk and bagged compost products for soil amendment, mulching, and landscape installation projects at commercial and residential sites |
| 111998 | All Other Miscellaneous Crop Farming | All other miscellaneous crop farming operations purchasing compost for organic soil amendment and applying finished compost to improve soil health and crop productivity |
Frequently Asked Questions
Common questions about this industry.
What is the typical valuation multiple for a composting operation?
Composting businesses typically trade at 4x to 7x EBITDA, with operations holding long-term municipal tipping fee contracts and permitted capacity commanding higher multiples. Per U.S. Census Bureau[3] data, valuations reflect the combination of gate fee revenue streams and finished compost product sales margins.
What SBA loan options are available for composting businesses?
The SBA[8] sets the small business threshold at 550 employees for NAICS 325315. Most composting operations qualify easily for SBA financing, with 7(a) loans supporting acquisitions and working capital, and 504 loans financing heavy equipment purchases and facility pad construction.
What permits are required for composting facility operations?
Composting facilities must obtain solid waste processing permits from state environmental agencies, comply with EPA[6] stormwater management requirements, and meet local zoning and land use approvals. Odor management plans, leachate containment systems, and vector control programs are typically required as permit conditions.
How are organic waste diversion mandates affecting the composting industry?
State-level organic waste diversion laws in California, Vermont, Massachusetts, and other states are creating guaranteed feedstock supply and tipping fee revenue for composting facilities. Per the EPA[6], food waste diversion mandates targeting commercial generators are driving capacity expansion and new facility development nationwide.
What revenue models do composting businesses use?
Composting operations generate revenue from two primary streams: gate fees charged for accepting organic waste feedstocks and product sales of finished compost. According to the EPA[6], facilities accepting food waste and biosolids typically command higher tipping fees than those processing only yard waste, while premium branded compost products serve higher-margin retail and professional markets.
What are the main operational risks for composting facilities?
Key risks include odor complaints from neighboring properties, feedstock contamination with non-organic materials, permit compliance challenges, and seasonal demand fluctuations for finished compost products. Per the EPA[6], proper facility siting, buffer zone management, and processing technique selection are critical to minimizing operational risk.
What workforce challenges do composting manufacturers face?
The Bureau of Labor Statistics[4] reports that heavy equipment operators, facility managers with waste processing experience, and quality control technicians are in demand across the composting sector. Outdoor working conditions, seasonal volume fluctuations, and competition from construction and waste management employers create ongoing recruitment challenges.
How does compost quality affect business valuations?
Operations producing US Composting Council Seal of Testing Assurance certified products command premium pricing and stronger customer relationships. Per the USDA[11], certified organic compost products meeting National Organic Program requirements access higher-value agricultural and horticultural market segments that support stronger business valuations.
Sources & References
Government datasets and editorial sources used in this report.
- [1]U.S. Bureau of Labor Statistics, Quarterly Census of Employment and Wages bls.gov
- [2]U.S. Census Bureau, Economic Census census.gov
- [3]U.S. Census Bureau census.gov
- [4]Bureau of Labor Statistics bls.gov
- [5]SBA Office of Advocacy advocacy.sba.gov
- [6]EPA epa.gov
- [7]Bureau of Labor Statistics bls.gov
- [8]SBA size standards sba.gov
- [9]SBA 7(a) loan program sba.gov
- [10]CDC/504 loan program sba.gov
- [11]USDA usda.gov
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