food supply chain

March 1, 2022

Food Waste Innovators Wanted

If we could pick one thing in the entire food space that technology could truly solve, it would be food *waste.* It has always been an issue that has a ripple effect up and down the food chain, and the statistics have only gotten worse since the COVID-19 pandemic began in 2020.

The team at the food waste non-profit ReFED works daily to provide data-driven solutions to reduce waste and loss in the food system — and that work is the topic at the 2022 Food Waste Solutions Summit held this year on May 10-12 in Minneapolis, MN.

Food waste doesn’t just happen at the consumer level, though about one-third of the 1.4 billion tons of waste happens after the food has been placed on retail shelves or taken home to consumer kitchens. But food waste – or food loss, as some experts note – also happens earlier in the supply chain, either during manufacturing, transportation and at the very beginning at the agricultural level.

Part of the Food Waste Solutions Summit is to discover and discuss innovations designed to tackle food waste at all levels of the food chain. The Spoon has partnered with ReFED to host a session showcasing innovative technology solutions to reduce food waste, specifically in agriculture, supply chain, and consumer categories — and we’re on the hunt for the creators, entrepreneurs and problem-solvers innovating in those categories to come and tell us their story.

Applications to speak during this innovation showcase are open through Friday, March 4. If you lead any organization innovating in the above-named categories, fill out the quick application. If selected, speakers will be included in a brief “fireside chat”-style conversation with the session moderator and audience Q&A.

We’re looking forward to meeting and hearing from food businesses, funders, policymakers, entrepreneurs and non-profits all working to solve this complex, global issue. For more info on the 2022 Food Waste Solutions Summit hosted by ReFED, visit their site.

*Note: The Spoon is a media partner for this event; this post is not part of any paid campaign.*

December 14, 2020

Connecting Demand to Supply: 2021 Food Supply Chain Tech Outlook

This is a guest post written by Seana Day and Brita Rosenheim, Partners at Culterra Capital, an advisory firm focused exclusively on tech-driven innovation across the food system. You can also find their 2020 Farm Tech and Food Tech Industry Landscapes and analysis at Culterra Capital.

We have been covering the Food Tech and AgTech sectors for the past decade, yet COVID-19 thrust the food supply chain into the spotlight as we could have never anticipated. Against the backdrop of the current pandemic, as well as nearly $500 billion in annual food waste occurring from food harvest to distribution and retail globally, it was time for a dive deep into the technology that will shape the food supply chain in 2021 and beyond.

For those also following the tech-driven food sector it is no surprise that, to-date, most investment and innovation fanfare have been focused on the food system end-points of AgTech and Food Tech. However after our recent odyssey into the Food Supply Chain Tech category, it is quite clear to us that there is a tremendous, untapped opportunity for vertical-specific technology companies which are focused on serving the unique needs of the food supply chain.

It is with this sense of urgency and optimism about new frontiers of innovation, agility and investment that we launch Culterra Capital’s inaugural 2021 Food Supply Chain Tech Landscape:

For the purposes of this analysis we have highlighted a handful of predictions for the year to come, as well as emerging themes and key innovation trends that we believe will continue to impact the four supply chain pillars (Supply, Production, Logistics/Distribution, Demand).

While we cover a number of digitalization-driven opportunities for food system participants to strengthen their resilience, profitability and agility, we will reserve deeper dives into the sector-specific drivers and practical adoption obstacles in later reports. But first, a brief primer on navigating the landscape before we dig into our key takeaways below:

How to Navigate the 2021 Food Supply Chain Tech Landscape

“Food Supply Chain Tech” here generally refers to the technology enabling the processes and movement that occur between the farm gate and the loading dock/back door of the grocery retailer/food service provider.
This is a heatmap, not a comprehensive catalog: While clearly not exhaustive, this map is meant to illustrate the layers and variety of technology solutions, early stage to mature, and primarily enterprise or B2B-focused. We have generally filtered the companies based on their food and ag customer base, and while mainly US-focused, have included a handful of global companies. Our FarmTech (inside the farm gate) and Food Tech (retail/food service/D2C) landscapes cover the other end points of the food system.
IT-Driven Focus: The landscape focuses predominantly on digital technology-related companies, and although hardware is (mostly) unplugged from this landscape, there is a strong recognition that hardware is an essential part of the technology landscape, especially as it relates to key trends around Industry 4.0 and networked equipment.

In order for us to drive down and understand the many, extraordinarily complex functions involved in the food supply chain, we have organized the market around four key pillars of activity:

First Mile (Supply)
Production / Food Processing (primary and secondary)
Distribution and Logistics
Retail / Food Service / D2C (Demand)

Across the bottom of the landscape, we included value chain players which integrate across multiple pillars.

Is Data Automation Bringing Sexy Back?

The overall food and ag industries are among the lowest penetration of digitalization relative to every other sector of the global economy. And while it is well understood across the food industry that modernization and investment in data infrastructure represent a necessary and essential first step, the challenge of “going paperless” is still a real hurdle.

Yes, we understand that “going paperless” is less sexy than, perhaps, micro-fulfillment robotics. But increased workflow and data automation solutions in the food supply chain holds significant power to help the food supply chain leapfrog into digitalization.

Data automation leverages ML/AI to digitize and automate document processing and manual back office processes like managing vendors, suppliers, contracts, key communications, appointments, and so on. Because of the highly fragmented nature and sprawling ecosystems, data automation brings critical resource management, accuracy and most importantly, an underlying digital foundation to the food supply chain.

Examples of workflow and data automation solutions focused on the food sector include Proagrica, Big Wheelbarrow, and Wholesail.

A digital foundation is also a key enabler of business innovation for participants up and down the Food and Ag system, like data-driven demand prediction. For example, today our food system is fundamentally supply-driven. Crops or livestock are harvested at a point in the season, and the producer is a price taker. Producers have long sought to overcome this risk / reward imbalance by vertically integrating, and we continue to see that from all sides whether it is Kroger or Walmart integrating their dairy supply chain, or Driscoll and Naturipe branded berries.

Those players who have access to demand data from the retailers, consumers and foodservice outlets, and can control several steps in the supply chain, can better understand when and where to sell, as well as how to maximize their profit through demand insights.

Similarly, with better demand data flowing into the distribution, logistics and production pillars, companies can better manage over / underproduction and reduce waste, while also improving the utilization of their own assets (equipment, labor, utilities, storage, etc.).

MOM Knows Best?

Mostly overlooked by venture capital investors, there has been a dearth of significant outside investment in food production and manufacturing business tools, like Manufacturing Operations Management (MOM) software, which represents a collection of systems for managing end-to-end manufacturing processes and automation. The core MOM subsystems include:

MRP (Material Requirements Planning): packaging, raw material planning, procurement scheduling, etc.;
MES (Manufacturing Execution Systems): used to track and document the transformation of raw materials to finished goods; and
Other categories of Enterprise Asset Management which fall into this broader manufacturing tech category.

Largely the domain of established and legacy software companies, vertical, food-focused MOM and Enterprise Resource Planning (ERP) systems are becoming increasingly recognized for their potential to supply foundational, batch-level data for AI/ML-driven analytics, more nimble food production processes, greater workflow automation, optimization of procurement, and so on.

At the same time, the broader technology landscape is shifting from a traditional manufacturing automation stack (ERP/MOM) to a IIoT stack (Industrial Internet of Things) which leverages a combination of app development, platform cloud, connectivity, and hardware. This intelligent manufacturing stack will be central to unlocking the promise of a more agile, visible and collaborative food supply chain.

In looking ahead, it is important for tech innovators to understand both the complexity and opportunity stemming from ERP/MOM/IIoT stacks, as the critical data captured in these subsystems has multiple beneficiaries and is also poised to enable business model innovation across the value chain, from ag producers, to manufacturers, distributors and beyond.

As an example, it is generally a challenge for ag producers to track and trace raw materials once they hit the processor (both primary and secondary). In food value streams like protein (animal) processing, automation and batch processing are hard to achieve given the nature of tracking disassembly (“primary” – one carcass that turns in hundreds of cuts or many SKUs) vs. assembly (“secondary” – a dozen ingredients combined into one product or SKU).

However, increasingly sophisticated and connected MOM systems are beginning to deliver batch-level tracking which makes verification of farming practices (regenerative, non-GMO, organic, etc), genetics / genealogy or origin claims easier to authenticate.

This is one of many examples that reinforces our belief that domain-specific manufacturing software and systems for the food and beverage sector are essential. The level of tracking complexity and data integration can be dizzying, but there are a handful of innovative companies that are building solid, scalable businesses such as Dairy.com, ParityFactory, Wherefour, and Food ID, among others in the space.

The Cold Chain is Heating Up

As noted in The Spoon’s coverage, the pandemic shifted a large number of people to online grocery shopping, and many of those new online shoppers will continue to shop online. Notably, this surge in digital grocery orders also included more online fresh / perishables purchases, both in retail environments as well as direct to consumer (D2C). This growth is expected to continue even as grocery shoppers migrate back to in-store shopping. For context, e-commerce grocery is now expected to account for at least 21.5% of US grocery sales by 2025, (up from a pre-Covid prediction of 13.5%).

We believe this increased demand will catalyze cold chain suppliers and 3PLs to meaningfully bolster their digital infrastructure and investment in tech solutions, as we have seen with high flyers like Lineage Logistics. They will feel greater pressure to adapt to the dynamic demands of buyers, such as faster speed of delivery, decreased waste, real-time inventory visibility and traceability of products.

These objectives are not possible without integration and interoperability solutions which create the linkages necessary to overcome the massive amounts of existing siloed data. These solutions layer on top of existing supply chain planning, execution and equipment control systems, integrating them to further optimize for analysis and real time planning / visibility across various parts of the supply chain.

Without harmonized data, the cold chain can’t truly unlock efficiency or capacity, nor adequately respond to supply-demand volatility. Tightly linked systems to share this data can have a significant impact on the shelf life of perishable products (reducing waste), the assurance of quality (product, producer or marketplace differentiation), and support agility in demand-driven forecasting. Examples of startups focused on providing innovative solutions in this sector include AgroFresh’s Fresh Cloud, Backbone AI, and Afresh.

Looking Ahead to 2021

The food supply chain differs in some respects from our traditional understanding of Food Tech and AgTech because it encompasses industries with relatively well-established players and technologies, many of which are horizontal software (with a multi-industry offering) and logistics companies. Due to this, as well as the highly-regulated and labor intensive nature of the supply chain, historically it has been a more difficult industry for nimble start-ups to penetrate.

Today, we see the majority of participants across the food supply chain setting the table with foundational data and digitizing basic workflows. This is the essential first step. Basic digitalization, strengthening collaboration tools, automating some data sharing, and looking for ways to streamline labor will be key themes in 2021.

To be sure, COVID-19 revealed accelerating demand for tech ready to scale (vs. new innovation). Yet that is not the end of the story. We see most of the exciting food supply tech innovation springing up around the perimeters of the landscape, particularly from analytics and strategy plays within First Mile (Supply) and Retail / Food Service / D2C (Demand).

For start-ups, those that can differentiate themselves with proprietary, unique data cleansing tools have an important edge. As we know from AgTech and Food Tech, this is one of the principal activities that many innovative companies spend vast amounts of time working on. The same holds here in the Food Supply Chain.

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Seana Day and Brita Rosenheim are Partners at Culterra Capital, and Venture Partners at Better Food Ventures, each with 20+ years of investment, M&A, and strategy experience within the food, ag and tech verticals. Their analysis on the Agtech and Food Tech sectors are regularly used by participants in the space to understand the quickly evolving landscape.

December 3, 2020

Apeel’s James Rogers on Fixing Our Perishability Problem to Fight Food Waste

“Perishability is so fundamental to the food system it’s almost unchallenged,” James Rogers, founder and CEO of Apeel, said to me this week during a virtual event for The Spoon.

Specifically, he meant that perishability is built into the global food system, whether that means accepting it as a cost of doing business or making sacrifices around quality and nutrition in order to avoid it. Either way, perishability is linked closely to the world’s $2.6 trillion food waste problem, which happens in many different forms up and down the food supply chain.

To get a deeper understanding of both the perishability issue and its relationship to food waste, Rogers and I took some time at this week’s event to walk through the different steps of the food system

As Rogers sees it, there are four main categories of the food system to examine: grower, suppler, retailer, and consumer.

The grower stage involves the actual cultivation of fruits, vegetables, and other perishable items. It’s a point in the supply chain where those involved have to make sacrifices in order to avoid excessive food waste. By way of an example, Rogers described how tomatoes are normally picked when they are still hard and green. The decision about when to harvest the food is based not on when it’s in peak eating condition but on making it last longer as it travels to suppliers and eventually to the grocery store. That works — for the grower. But by disconnecting the fruit from the plant early on, we’re sacrificing flavor and nutritional content, and it means that a consumer could very well buy a tomato from the grocery store and wind up chucking it because of its mediocre taste.

Building more time into the supply chain is a point Rogers has emphasized again and again during our conversations. He is, of course, invested in this idea through his company Apeel, which makes an edible coating for fruits and vegetables that extends their shelf life, in some cases by weeks. His goal, and the goal of others in the food industry, is to build more time into our supply chain so that crops can be picked when nature dictates and not before.

Suppliers feel the time crunch perhaps most acutely of anyone on the food supply chain. These are the people that receive produce from the grower, sort it, box it, and ship it to grocery stores and other buyers.

“Suppliers have a clock that’s ticking,” Rogers explained. Using another example, he referenced a small farm growing caviar limes, which only last for a couple days. Fruit had to be sorted, packed, and shipped on the same day to avoid spoilage, an issue that was solved once the farm started using Apeel’s coating on the limes.

But while growers and suppliers race to avoid perishability, retailers and other buyers, such as foodservice operations, have it built right into their business model. The typical grocery store builds large fruit and vegetable displays so they can sell more and sell it faster. However, Rogers said the rate at which food ages speeds up by a factor of four once it leaves the walk-in cooler and goes on display.

“If you want to maximize your sales, you will always want to have a full shelf which leads to waste,” he said, adding that grocers without a waste problem have missed sales opportunities, since demand has outpaced supply.

Apeel is one such solution helping retailers combat the problem of perishability. Others, including Hazel Technologies and StixFresh are also bringing their technologies to retailers with the goal of extending the life of produce.

The last stop on the food supply chain also happens to be the one where the majority of food, at least in the U.S. and Europe, gets wasted. Rogers was quick to point out that “no one wants to waste food.” However, despite the growing number of potential solutions available to consumers to curb food waste, expecting massive shifts in behavior is next to impossible. “Just telling them they shouldn’t waste food doesn’t get to the crux of the issue,” Rogers said during the event. Rather, the strategy should be about helping people create an abundance of food in their homes. Once again, building more time into the life of produce and therefore into the supply chain is what would enable consumers to keep more fresh food at home without the fear of it going to waste.

At the end of the day, he said, “we have to make the most environmentally beneficially solution the cheapest, easiest solution.”