Startups Serve Leftover Food to Market

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Some entrepreneurs see a business opportunity in leftovers.
 Restaurants, supermarkets and commercial kitchens in the U.S. waste $57 billion of food each year, according to ReFED, a nonprofit that works to reduce food waste. A further $15 billion of food is produced but never makes it off farms.
 Spoiler Alert, founded by graduates of the Massachusetts Institute of Technology's business school, is hired to help food manufacturers and wholesale distributors better manage unsold inventory and increase donations. Sysco Corp. the largest food distributor in North America, said Spoiler Alert helped it redirect roughly 700,000 pounds of food worth about $1 million.
 LeanPath of Portland, Ore., is helping Sodexo SA, Google parent Alphabet Inc., IKEA, Aramark Corp. and other companies with commercial kitchens track and reduce food waste by using technologies such as cameras and scales.
 And FoodMaven, a startup in Colorado Springs, Colo., is connecting suppliers with too much turkey or lettuce with restaurants and food-service companies that can buy it at a discount.
 Walter Robb, who stepped down as Whole Foods co-CEO last year but remained on the grocer's board, invested in FoodMaven and joined the board in his first foray in the industry since Amazon.com Inc. bought Whole Foods in August. “It uses the power of markets to actually try to solve a problem,” Mr. Robb said.
 Sellers can list items on FoodMaven's website; the startup helps with marketing and logistics and takes a cut of the sale price. Items cost as little as half of the standard wholesale price, with the discount depending on whether food is cosmetically damaged, has limited time before the sell-by date, or is up for sale in an unusual quantity.
 The company is moving hundreds of thousands of dollars worth of product a month, a volume that is growing by nearly 50% a month, said its chief executive, Patrick Bultema. He said FoodMaven, which has raised $2 million since it was founded last year, has 700 suppliers and customers in Colorado and aims to expand nationally in the next five years.
 Whole Foods is testing the service in its Rocky Mountain region, listing some items on FoodMaven's site.
 Elin Parker Ganschow, owner of Sangres Best Grass- Finished Beef in Colorado, is using FoodMaven to sell more than $15,000 of tenderloin— left after processing a large order for ground beef—that she wouldn't otherwise have been able to market quickly enough.
 Manufacturers generate best-by dates to ensure quality; the Food and Drug Administration says they aren't a guide for safe use and food can safely be frozen indefinitely. Mr. Bultema said restaurants that buy from Food- Maven understand that bestby dates are conservative, and that they can freeze bulk items before those dates and still serve them fresh later.
 Many big food sellers are trying to cut waste on their own. Kroger Co. said this summer it would eliminate food waste at its network of supermarkets, the nation's largest, by 2025. In some markets, Wal-Mart Stores Inc. sells cosmetically imperfect potatoes and apples for lower prices.
 The nation's largest food seller also has agreed with other big retailers and manufacturers to introduce simpler use-by dates by 2020 that will aim to reduce confusion that can lead consumers to throw out safe food.
 Large restaurant chains are also working to cut food waste. Food Donation Connection, a Knoxville, Tenn.-based company, coordinates donations of unsold food from companies such Darden Restaurants Inc. and Chipotle Mexican Grill Inc.
 Darden, owner of the Olive Garden and LongHorn Steakhouse chains, has donated more than 100 million pounds of food through the service since 2003, a spokesman said.  

Left to Rot

Amount of food wasted in the U.S. (2016, in millions of tons)


*Includes groceries and distribution centers
Source: ReFED

BY HEATHER HADDON

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