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Daily news and analysis about the food tech revolution

Imperfect Produce

Foodmaven Harvests $15.3M Series B to Sell Imperfect Food to Restaurants

Today Denver, Colorado-based FoodMaven announced it had closed a $15.3 million Series B (via Forbes). The round was led by Tao Capital, who had previously invested in the startup’s Series A, with participation from the Fine Line Group. This puts FoodMaven’s total funding at $34.4 million.

Founded in 2015, FoodMaven sells cosmetically imperfect and oversupplied food to foodservice providers, like restaurants and hotels, at a steep discount. Up to 50 percent, in fact. Purchasers can go onto the FoodMaven marketplace to shop for over 500 products to have delivered directly via FoodMaven drivers.

FoodMaven is far from the only company trying to make a buck off of surplus or “ugly” food. Imperfect Foods and its competitors Misfits Market or Hungry Harvest deliver boxes of costmetically flawed produce directly to consumers. On the B2B side, Full Harvest sells imperfect produce to food and beverage companies (like juiceries).

Though it may sound virtuous to keep food out of landfills, there’s some contention over whether or not the imperfect food should actually be resold. Some, like crop scientist Sarah Taber, argue that it subverts food which would typically go to people in soup kitchens or lower-income areas.

According to its website, FoodMaven donates all its unsold food to food banks — though the Forbes article put that number at 20 percent. It also works with local producers, some of which don’t produce enough volume to merit donating to hunger relief organizations.

That controversy aside, FoodMaven’s business plan seems like an all-around win. Foodservice establishments get access to discounted produce and meats, while farmers and ranchers are able to make some money off of products that would otherwise be a total loss.

Up until now, FoodMaven has only been operating in Colorado. However, the Forbes article mentions it’ll soon begin serving the Dallas-Fort Worth area. With over $15 million in fresh funding, I bet we’ll see FoodMaven expand their marketplace to new regions.

“Ugly” Produce Subscription Service Misfits Market Raises $16.5M

Today Misfits Market, the New York-based company that sells subscription boxes of irregularly-shaped produce, announced that it had raised a $16.5 million Series A funding round (h/t Techcrunch). Greenoaks Capital led the round.

Founded in 2018, Misfits Market sources produce from farms that can’t be sold to grocery stores for some reason: be it because of imperfect shapes, sizing, or just a surplus. Consumers can choose from two box sizes — the smaller The Mischief (10-12 pounds weekly for $23.75, $20 with subscription) or The Madness (18-20 pounds for $42.50, $34 with subscription). The startup currently ships to 11 states. Today it announced expansion plans to move into 8 more, covering most of the East Coast.

So-called “ugly” produce is having a moment. In addition to Misfits Market, companies like Imperfect Produce and Hungry Harvest also sell cosmetically imperfect and surplus produce through subscription boxes at a reduced cost, while Full Harvest serves the B2B side.

Unlike Imperfect Produce, however, Misfits customers can’t choose what’s in their box — it’s based on whatever the company sources from their farm partners that week. While that could be fun for the adventurous eater, it could also result in more home food waste if, say, you receive a ton of parsnips and are a parsnip hater, or simply don’t know how to cook them. Misfits hopes to introduce a customization feature down the road.

The ugly produce movement has also spurred some serious backlash. Crop scientist Sarah Taber wrote a viral Twitter thread which claimed that the food system is actually really good at using irregular and surplus produce, which often ends up going to underprivileged communities or turned into blended foods like salsa. However, that can depend on the size of the farm — smaller producers can have a trickier time finding people to take their misshapen or surplus foods.

That is where Misfits Market can help. Unlike Imperfect Produce and Hungry Harvest, Misfits Market exclusively targets local producers, giving them a platform to sell their goods that they might not normally have had. Misfits market is also trying to democratize who has access to fresh, organic food: the company ships to every zip code in the states in which it operates, not just the wealthier urban ones.

Despite disagreements over how to tackle it, there’s no debating that food waste is an overwhelming problem. And Misfit Market’s $16.5 million funding round shows that investors realize it’s also a juicy opportunity.

Imperfect Produce Launches Pilot Program to Reuse Your Delivery Boxes

Whenever I get home to find my Imperfect Produce box waiting for me on my doorstep, I congratulate myself on being a good person. After all, the box is filled with surplus and “ugly” produce — that is, fruits and vegetables that are cosmetically flawed and can’t be sold in regular grocery stores — so by purchasing them I’m supposedly saving them from ending up in a landfill.

However, after I put away all my virtuous vegetables, I’m always left with a big, bulky box, often much larger than it needed to be to fit my single-person order. Sure I recycle said box, but I can’t help but feel like I should be doing something more sustainable than just shoving the broken-down box into my recycling bin and going on with my day.

Apparently, I’m not the only one who’s been feeling some guilt over my cardboard consumption. Today I got an email from Imperfect Produce announcing a new initiative in Seattle (where I live) to reuse said boxes by giving them to Seattle Food Lifeline. The non-profit uses boxes to pack up and deliver donated food to food banks and shelters. According to Imperfect, Seattle Food Lifeline currently buys all their own boxes.

But starting today they’ll be getting reused Imperfect boxes to help them shuttle food around. For the next month, Seattlites can leave their clean, non-damaged Imperfect boxes in the same places they were delivered and one of the Imperfect drivers will pick it up on their next delivery. The boxes will go back to the local Imperfect warehouse until they’re picked up by the Seattle Food Lifeline. According to the Imperfect website, the company is doing the same thing in the Portland area with the Oregon Food Bank.

Imperfect Produce got some serious flak last year when a New Food Economy op-ed accused the company of a) diverting produce that was intended for food banks (an issue that was found to just be a result of a typo on the Imperfect website), and b) putting local farms out of businesses by undercutting CSA business. Initiatives like reusing cardboard boxes could help give the startup some much-needed positive PR.

Photo: Imperfect Produce.

Which isn’t to say that Imperfect’s pilot program is just a marketing ploy. It’s actually a pretty smart move: Imperfect gets to close the packaging loop, shore up its sustainability image, and give the boxes to a good cause. I’m not sure how many people will actually remember to put their box out at the pickup spot at the right time, or that the boxes won’t get stolen or ruined before they get grabbed.

But despite my qualms, the whole “reuseable packaging” idea is a solid one — both financially and environmentally — that more companies should be taking advantage of. With the advent of the robot revolution, it could become a lot easier to do so. The CEO of Korean company Woowa Brothers has outlined the idea that food delivery robots should pick up your recycling and return them to their origin where they can be reused or properly recycled.

Maybe Seattlites will eventually be able to load up their boxes into wee self-driving Amazon delivery bots, who can shuttle them to a warehouse where they can be reused to send you more stuff.

Spoiler Alert’s Software Helps Food Companies Steer Clear of Spoilage

Spoiler alert! The enterprise software startup, Spoiler Alert, works to help large food manufacturers, distributors and grocery distribution centers better manage their inventory to help reduce food waste and recoup potentially lost revenue.

Hopefully that doesn’t ruin the rest of this story for you.

It shouldn’t, as Spoiler Alert is one of the many companies using technology to tackle the very real problem of food going unused. Based in Boston, Spoiler Alert offers a business intelligence and relationship management platform that lets companies that move large amounts of food better understand their inventory and navigate when unexpected surpluses happen.

Unsold food inventory happens for a lot of reasons. Severe weather can interrupt transport, a buyer can cancel an order, or someone in the office could just be really bad at ordering the right amounts. Spoiler Alert’s software lets companies put this excess food to use, whether that’s finding an alternate buyer, turning it into a donation, or connecting it with a composting facility.

Let’s say TomatoCorp suddenly finds itself with a ton of extra tomatoes. These tomatoes are not spoiled and totally fine to eat.

Typically, TomatoCorp would have to go out and manually find someone to take the excess inventory, and hopefully do it before the food spoils and has to be thrown out. This takes time and pulls already busy people off the work they normally do.

With Spoiler Alert, this process is more automated. In this example, TomatoCorp has uploaded all the SKU data about the tomatoes, as well as the partners and buyers it does business with. Spoiler Alert will look at the surplus and help the company connect with potential buyers in its network, or with non-profits that can take the tomatoes as a donation. The software even compares whether a straight sale or the tax benefits of a donation are more economical for the company.

Spoiler Alert also helps companies understand their own ordering with granular tracking, so if it’s actually a person in a particular department that is consistently over ordering, the company can address that problem so it’s no longer a cause of inventory mismanagement.

Founded in 2015, Spoiler Alert has 11 employees and received a $2.6 million seed round from Acre Ventures (which is backed by Campbell Soup Company). The company operates in 19 states and counts Sysco among its clients.

Spoiler Alert isn’t the only startup looking to help get extra food into the right hands. Copia‘s platform helps organizations donate excess food, Imperfect Produce sells “ugly” produce at a reduced rate, and LeanPath sets up a scale and camera in cafeterias to help monitor and reduce pre-consumer waste.

But the folks at Spoiler Alert think their biggest competition is the status quo. Organizations are fine doing things the way they’ve always done them and don’t want to learn anything new. The easier companies like Spoiler Alert and others mentioned here can make it to put that surplus food to work, the better it is for our communities, our planet and (spoiler alert!) the bottom line.

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