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The Spoon

Daily news and analysis about the food tech revolution

Misfits Market

Surplus Food Startup Hungry Harvest Closes Series A Round at $13.7M

Food rescue startup Hungry Harvest has closed its Series A round at $13.7 million, according to a company press release. The round was led by Creadev with participation from Danone Manifesto Ventures, Quadia, and Maywic Select Investments.

Hungry Harvest is one of several companies out there rescuing “ugly” produce and other staples from groceries in an effort to curb food waste and redistribute food to those in need. The company collects fruits, vegetables, and other items deemed cosmetically unfit for mainstream retailers and packs them into variety boxes customers can order and have delivered to their doorsteps. Users can customize their boxes based on how often they cook, how many people they are feeding, and whether they prefer organic produce or will eat anything. Boxes range in price from $15 for a “Mini Harvest” all the way up to $42 for a “Super Organic Harvest.”

The company also donates to local organizations fighting food insecurity in the U.S. Hungry Harvest says it plans to use the new funds to improve the customer experience for its products and scale its social mission of getting affordable food to those in need. 

The concept of rescuing ugly produce from landfills has steadily grown in popularity over the last couple years as the world’s multibillion-dollar food waste problem becomes more top of mind for more consumers. Those consumers now have ample options when it comes to purchasing cheaper produce that would get tossed at a grocery store, including Karma, Imperfect Produce, and Misfits Market. Some of these companies are actually partnering with grocery stores, as Flashfood is doing with Meijer stores in Detroit. 

For it’s part, Hungry Harvest currently delivers to Baltimore, D.C., Philadelphia, Charlotte, Raleigh, Miami and Detroit.

The Food Tech Show: Ghost Kitchens, $1 Keto Cookies & the Magical Egg Cooker

The Spoon editors got together to talk about some of the most interesting food tech news of the past week (as well as complain about high-priced cookies).

Some of the stories we talk about on the pod include:

As always, you can listen to The Food Tech Show in Apple Podcasts, Spotify or wherever you get your podcasts. You can also download the show direct to your device or just click play below.

Misfits Market Raises $85M Series B for its Online Oddball Food Marketplace

Online grocery subscription service Misfits Market announced today that it has raised an $85 million Series B round of funding. The round was led by Valor Equity Partners with participation from Greenoaks Capital, Third Kind Venture Capital, and Sound Ventures. This brings the total amount of funding raised by Misfits to $101.5 million.

Founded in 2018, Misfits Market started out selling imperfect or “ugly” produce boxes via subscription. The company has since expanded into other categories. It now sells all manner of packaged food considered imperfect because of things like inventory trucks being sent to the wrong location or labels printed backwards on items.

You may think that you can’t build a business on misprints, but as Abhi Ramesh, Founder & CEO of Misfits Market explained to me phone last week, you’d be wrong.

“There are a ton of manufacturing errors,” Ramesh said, “We purchased 50,000 units of olive oil because [the] label was printed backwards. Things like that happen constantly in the food system — manufacturing errors, mislabels, short coded items.”

Misfits claims that customers who buy these imperfect items save an average of 25 – 50 percent of retail prices. The catch however is that these imperfections are not consistent. That particular brand of olive oil isn’t going to misprint labels every month. Ramesh told me that while there may not be brand consistency, there are enough manufacturing issues across the industry that his market can still offer olive oil, it will just be a different brand from month to month.

Like so many other grocery related businesses during the COVID pandemic, Misfits Market has seen a surge in usage. According to today’s press announcement, the company has seen a 400 percent spike in consumer demand and has made 400 new hires since March.

Misfits Market isn’t the only company in the ugly food game. Imperfect Foods and Hungry Harvest do much the same thing.

Right now, Misfits Market only delivers to zip codes across the eastern half of the U.S. Consumers sign up for the service by choosing one of two different box sizes for produce, with the smaller one costing $22 and the larger going for $35. From there, they can access the other imperfect items in the marketplace. Ramesh said that eventually, Misfits Market will become more like Costco, where you pay a monthly membership that gives you access to the full store.

With $85 million now in the bank and a bigger customer base, they’ll be able to buy up even more misprinted product misfits.

“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.