Last month 16 food waste thought leaders met in an industrial corner of San Francisco to discuss the future of food waste capital and innovation. The event held at the headquarters and warehouse operations of food waste innovator, Imperfect Produce, was organized by Alexandria Coari, Capital & Innovation Director for ReFED, as part of the nonprofit’s Food Waste Funders Initiative. The Initiative convenes funders in an effort to catalyze the $18 billion investment needed for effective solutions to reduce food waste by 20% over the next decade. The morning was a great opportunity for investors to meet in person, visit the fast-growing innovator, and discuss next steps for the road ahead.
Growth was the focus of the conversation, driven by the diversity of the group, including private equity firms, venture capitalists, philanthropic funders, nonprofits, and government representatives. Funders were able to interact peer-to-peer sharing perspectives and hearing about emerging food waste solutions from the solution providers themselves.
A number of key insights came out of the discussion. One finding was the volume of new funding that has come into the space, exemplified by three food waste specific multi-year commitments totaling approximately $250 million - Rockefeller Foundation’s $130M YieldWise Initiative to fight food loss and food waste around the world, Kroger Co. Foundation’s Zero Hunger Zero Waste $10M Innovation Fund, and CalRecycle’s $100M in climate investments which include approximately $90M for food waste prevention, recovery, and recycling innovations. Other notable funding highlighted by the group includes DBL Partners’ investment into Apeel Sciences, Draper Richards Kaplan Foundation’s $300k grant to Food Forward, and Atticus Trust’s place-based funding to drive Nashville’s food recovery and recycling ecosystem.
A second insight was that many of the food waste innovators who were just starting out a few years ago are quickly hitting their stride. Imperfect Produce is proof of this. The company has grown from 3 founders in 2015 to over 400 employees. The company also recently moved into a larger facility in the emerging Bayview District. The field trip was a great way for funders to see food waste innovation up-close while learning about the drivers of food waste on farms. Attendees toured the warehouse, witnessing firsthand the process of packing produce items for delivery. The company’s model focuses on purchasing cosmetically imperfect produce from farms and shipping directly to customers at a fraction of retail prices. Head of Outreach, Dylan Bondy, reiterated for the group that Imperfect resonates with consumers for its food waste impact, but that there are additional key factors driving market adoption, including their low-cost price point, convenience/customization, approachable branding, and focus on customer service.
A presentation from Food Shift founder and director, Dana Frasz, shined light on the potential for new approaches to community kitchens and food banks via unique social enterprise models that not only reduce food waste, but drive other social and economic benefits such as job creation and hunger alleviation. With a keen eye towards scalability, last-mile delivery and the right unit economics, the funders acknowledged the power of social enterprises to possibly exceed the estimated 15k new jobs to be created with a reduction of food waste by 20% over the next decade as provided in ReFED’s 2016 Roadmap.
Another insight gleaned was that government grant funding has accelerated even further over the last couple years and includes funding at a city, state, and federal level. For instance, in 2017, the Tennessee Department of Environment and Conservation awarded $4 million to 13 organizations, including Second Harvest Food Bank of Middle Tennessee to expand their food rescue programs. Match funding requirements from public programs also encourage partnerships that multiply impact across public, private, and philanthropic funders, such as those from Foundation for Food and Agricultural Research (FFAR), who in 2018 established a food loss and waste challenge area to drive up to $20 million for critical research projects.
One final insight is the important role policy plays in incentivizing or requiring businesses to better address their food waste management and donation policies. In California, CalRecycle is currently developing regulations for SB 1383 establishing methane emissions reduction targets in a statewide effort to reduce emissions of short-lived climate pollutants (SLCP). The bill includes targets to recover and redistribute edible food currently being disposed of by a reduction of 20% by 2025.
Overall food waste has changed from being seen as a problem to being recognized as an opportunity. ReFED’s Food Waste Innovator Database lists over 450 innovators across the country and acts as a tool for connecting businesses and potential investors with innovators tackling all levels of the food recovery hierarchy. The state of California has the largest number of innovators in the country at 16% of the total. To show this connection beyond the site visit, attendees were treated with breakfast from Replate, a $299K CalRecycle food waste grant recipient, who matches extra food from corporate offices with communities in need and SuperGrain+ bars to take home from ReGrained who use the bi-product from brewing beer to produce nutrient-rich snacks.
During the discussion attendees agreed that the fight against food waste needs to continue to be data driven. In an effort to continue quantifiable recommendations, ReFED will release a Foundation Investment Report this summer, revealing the scope and landscape of this funding to date. The report will offer insights into the areas where funding is centralized and recommendations for areas of focus for future funding.
As the day ended, investors saw the time to network as invaluable and the potential for collaborations down the road. In particular the group recognized the importance of bringing new perspectives and potential opportunities into the mix. For more information on ReFED’s Food Waste Funders Initiative and to join the next event, contact Alexandria Coari, [email protected]. To review or register on the ReFED Innovator Database, visit the ReFED website, HERE.