Starting next year, California’s Senate Bill 1383 will begin to require businesses and consumers to separate food waste from their garbage and put them into “green” bins for proper composting.
The legislation, passed in 2016 by then-governor Jerry Brown and the California state legislature, also will begin requiring tier 1 food businesses (grocery retailers, food distributors, food service providers) to divert 20% of food destined to be thrown away to food recovery organizations by the year 2025.
While I think it’s a good thing that everyone in California – both consumers and businesses – will eventually be required to start composting, I’m more interested in how SB 1383 could catalyze interest in platforms that help put food destined for the waste bin on someone’s plate instead. After all, while composting is a net positive from a climate impact reduction perspective, it’s also the last stop on the food waste recovery and mitigation express. In other words, when food feeds someone instead of ending up as fertilizer, everyone wins.
The timing is good for the law, partly because the pandemic has driven home the realization among businesses that it’s their responsibility to try and divert food to local food banks or other food recovery organizations as good corporate citizens. And of course, it also makes good business sense, since by redirecting food to food recovery organizations, these businesses can also claim these donations on their taxes.
As grocery retailers and other tier 1 food businesses ramp up their food diversion efforts, there are some organizations that could help them along the way. One of these companies is Goodr, which offers grocery retailers and other food-related organizations a tech platform and associated service to help them get excess food in the hands of food charities. Goodr sprang into action in its home market of Atlanta during the early days of the pandemic and showed it could really make an impact. Other organizations such as Quest also provide food diversion services and food waste audits.
One of the challenges of a food recovery program is just having the ability to track and manage potential food waste. There are a number of technology platform providers such as Afresh and Crisp that give grocery providers tools powered by machine vision, AI, and other cutting-edge technologies to better predict and manage fresh food inventories. There are even food robot companies like Simbe developing technologies to help assist in food waste reduction management.
Finally, there are marketplaces like Olio and Too Good to Go that enable grocery retailers, restaurants, and other organizations to list excess edible food for sale on a highly-discounted basis to local consumers. While food sold on these platforms will not count towards the company’s 20% food diversion requirement, using them will help a company reduce the overall amount of food wasted and help provide low-cost food to consumers.
But what I am most excited about is how SB 1383 could give rise to new solutions to help food retailers and foodservice providers waste less food. New regulations often serve as catalysts for innovation, giving large businesses a new reason to invest in core technology infrastructure. As SB 1383’s regulations begin to go into effect, innovators with good ideas for new technology to help companies reduce food waste and redirect excess food towards food insecure citizens will have a growing market opportunity for their solutions. This growing opportunity will likely attract more venture investment for a category that has, at least in the past, had a hard time convincing investors there was enough of a market to garner them a return on their investment.
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