Why it matters:
- Nearly one-fourth of the food produced in the U.S. ends up going to waste, which also results in wasted resources spent by businesses to produce and transport food items.
- Reducing food waste represents a tremendous opportunity for helping people in need and protecting the environment, while boosting food companies’ own profitability and sustainability.
- Technology platforms such as Misfits Market, Too Good to Go and Goodr are successfully scaling up their operations as they tackle this challenge from different angles, seeking to provide benefits to both food businesses and consumers.
A handful of technology startups are seeking to tackle the challenge of reducing food waste at the grower, retailer, restaurant and consumer levels by matching surpluses with willing buyers.
Misfits Market, Too Good to Go and Goodr are leaning into the booming food waste management business, which generates an estimated $34.22 billion in global sales, and is on track to expand at a 5.4% compound annual growth rate over the next few years, according to Grand View Research.
Nearly one-fourth, or 24%, of the 229 million tons of food in the United States that ends up in landfills is incinerated, washed down the drain or simply left in the field to rot, according to ReFED, a national nonprofit that seeks to identify inefficiencies in food supply chains to reduce food waste. Food waste is also considered a significant contributor to greenhouse gas emissions because of the resources that are used in producing and transporting items that are never sold or eaten, according to ReFED.
“Consumer awareness around sustainability and the environment is at an all-time high,” said Abhi Ramesh, founder and CEO of Misfits Market, which rescues food that would otherwise go to waste and delivers it to consumers. “A growing number of consumers want to feel good about where they shop, the products they buy and their impact on the environment.”
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Misfits Market: ‘Rescuing’ 100 million-plus pounds of food to serve 400,000 consumers
Among the products Misfits Market carries are fruits and vegetables that are misshapen or otherwise don’t have enough “shelf appeal” to sell on supermarket produce racks.
The company rescued more than 170 million pounds of food in 2020, and exceeded that total in the first half of 2021, said Ramesh.
Misfits Market also tripled its network of farmers and suppliers last year, and saw a five-fold increase in active customers and order volume. It recently reached the milestone of serving 400,000 customers across the U.S.
So far in 2021, the company has expanded into several new markets in the Western U.S., including Texas, Oregon and Washington, and Ramesh said he hopes to reach the entire continental U.S. by the end of the year.
He said the company also hopes to carry close to 1,000 different products by year-end, up from 400 currently.
“As we can continue to grow, we are going beyond farm-level waste and into packaged goods, offering items that were surplus or may have had packaging changes that made them unsuitable for grocery stores,” said Ramesh.
Misfits Market is also venturing into upcycling, a form of recycling whereby items are repurposed at the end of their use. It’s working with 88 Acres, a maker of seed-based snack bars, butters and other products, for example, to rescue edge pieces of the company’s Seed + Oat Bars and repackaging them as snacks.
We really talk about it as a win, win, win. It's a win for the environment. It's a win for consumers — they get food at a third of the price and they get to try some new places. And then it's a win for businesses because they get a little bit of increased revenue from what would otherwise be waste.
Claire Oliverson, U.S. head of marketing, Too Good To Go
Too Good To Go: ‘It’s a win, win, win’ for the environment, consumers and business
Too Good To Go is another startup that seeks to salvage food surplus from retailers and restaurants by providing a platform for consumers to purchase the leftovers. Retailers and restaurants that sign up for the program assemble “surprise bags” of leftover food at the end of each day and offer them for a third of their retail price to consumers who order on the Too Good To Go mobile app.
Based in Copenhagen and serving several markets in Europe, the company also currently operates in 10 cities in the U.S., mostly in the Northeast and on the West Coast, with plans to expand into Atlanta and Los Angeles this fall.
Users simply browse in the app for Too Good To Go partner companies in their area, order a surprise bag if they are interested and then pick it up themselves from the retailer or restaurant. Too Good To Go, which is a for-profit certified B Corporation (a business driven by a social mission), keeps a small percentage of each sale as its fee before forwarding payment to its retail and restaurant partners.
“We really talk about it as a win, win, win,” Claire Oliverson, U.S. head of marketing at Too Good To Go, told CO—. “It's a win for the environment. It's a win for consumers — they get food at a third of the price and they get to try some new places. And then it's a win for businesses because they get a little bit of increased revenue from what would otherwise be waste.”
She said that while consumers are increasingly concerned about the environment, they still might need some education about the relationship between food waste and climate change. The company is seeking to build more awareness as it expands to more markets.
Just over 1.5 million Americans have joined the app so far, shopping for discount surplus foods from more than 5,000 different food businesses that have signed on to participate.
“By the end of next year, we hope to be live in all of the largest U.S. cities, but it's a big lift,” said Oliverson.
Goodr: Helping restaurants track food surplus donations — and landing $1.5 million in funding
Another certified B Corporation in the food-waste-diversion space is Goodr, which provides foodservice companies with a secure ledger that tracks an organization’s surplus food donations. It enables companies to easily quantify their social and environmental impact in real time while at the same time improving their bottom line through charitable tax donations.
Founder Jasmine Crowe had been seeking to find ways to provide food for people in need when she launched Goodr in 2017 as a technology platform to connect restaurants in Atlanta with the nonprofits that could distribute their surplus food to those in need.
The company continues to grow as Crowe has spread the word through social media and by attending and speaking at local events.
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Goodr has also completed several rounds of investment, include $1.5 million in a Series A venture capital round earlier this year, according to PitchBook.
-Barbara Thau contributed to this story.
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