Apeel, best known for its edible produce peel that extends the lifespan of fruits and vegetables, announced today it has raised $30 million in funding from the International Finance Corporation (IFC), Temasek, and Astanor Ventures. The new funds will be used to help smallholder farmers both reduce food loss and gain access to higher-value markets for their produce.
For this initiative, Apeel is focused primarily on smallholder farmers in Sub-Saharan Africa, Mexico, Southeast Asia, and Central and South America. James Rogers, founder and CEO of Apeel, explained during a chat with me this week that in these regions, farmers face a two-pronged problem when it comes to growing and selling produce: time and access.
There is little in the way of cold chain infrastructre in many of these regions, which makes it virtually impossible to keep produce fresh long enough to go from farm to market without spoilage. This lack of cold chain operations is the main cause of food loss in these parts of the world.
Apeel’s technology, of course, builds time into the food supply chain via its edible peel that coats fruits and vegetables and to keep them fresher longer. But as Rogers noted, that extended shelf life is only truly valuable to farmers if they have access to markets with buyers, which is the other part of the food waste problem for smallholder farmers. Up to now, a lack of extra time when it comes to produce lifespan has barred farmers from reaching buyers outside of local markets and as a result has limited any economic gain.
Apeel’s new funding will in part go towards alleviating that second hurdle. In addition to providing investment, IFC is also partnering with Apeel to create programs that will plug these smallholder farmers into the Apeel supply chain and give them access to markets in the U.S. and Europe, where the economic opportunities are higher.
By way of example, Rogers explained that a mango grown on a smallholder farm in Kenya might sell for 1 cent in a local setting. If that mango makes it to one of the country’s urban centers, it might sell for $1, bringing greater economic gains for the farmer. Getting the mango to even higher-value markets like the U.S. and Europe only increases the economic gains.
In a sense, the one couldn’t exist without the other when it comes to the combination of Apeel’s technology and its IFC partnership that gives farmers access to exporters. As Rogers explained to me, the technology — that is, the edible peel that extends shelf life — builds more time into the supply chain, enabling the produce to reach exporters before it goes bad. “The time creates the access,” he said.
But this latest fundraise and the IFC partnership is Apeel’s first major step into developing countries that experience food waste and loss in the earlier stages of the food supply chain — though such a move has been on the company’s radar for a long time. Rogers explained that when Apeel started a decade ago, one of its goals was to provide the same supply and demand opportunities for people in parts of the world that don’t have refrigeration and cold chain tech.
“[Food is] only valuable if the underlying infrastructure is there to make it valuable,” he said, adding that part of Apeel’s mission with this new fundraise is to “bring demand from some of the largest markets in the world and be able to make the world much larger for these smaller farmers.”