And this is an executive summary for any breeders. I’m following this. And also, I want to take a moment to thank Abby Schwartz from Clari Fruit for joining us today.
Later on in the presentation, we’ll have, obviously, a little bit to what they’re working on in Clari Fruit and and how and how they’re implementing it as a way to potentially reduced food waste.
Thank you so much.
Of course. Of course. And and and again, to Avi and anybody else on the call, please feel free to chime in with any any sort of insights or questions or comments throughout the presentation in your recording.
So food waste for some of us, That’s maybe new. But it’s it’s still shocking every time that I think we go back and look at it.
Is that in in in the US?
And again, this is this changes from country to country and from continent to continent.
Typically, North America is considered to be one of the largest defenders of food waste. And in the US, forty percent of all food grown that is meant for human consumption, and it adds up to about sixty three million tons of food sent to a landfill.
A lot of this is occurring at sort of the consumer facing business side. And in and in and in homes, there’s also a certain start occurring.
I will follow this one of the reasons why that is happening at each of those segments.
In terms of values, There’s about two hundred eighteen billion dollars every year that’s spent on food that is wasted in a huge amount of value.
That is wasted in the process. So when we think about what these impacts are, it’s not just at anomic level, but there’s also social and environmental impacts that we’ll get into a little bit later here.
But I think as we can see here, the magnitude of food waste and both its quantity and its value is is quite significant. David, so when you talk about waste here, you’re talking about food that’s like, run away or spoiled or — Mhmm. — did you see in anywhere and in your research here any discussion of food that’s waste considered a waste because of overconsumption or obesity or unnecessary calories?
They did not.
So the only the only case in which that because it kind of would be kind of true. So in one of what I would consider to be a non sort of company type of innovation, it was about reducing the size of plates in restaurants and reducing and actually removal of trays from all you can eat buffet. So, like, one of the big problems is that if you had a tray, all you could say you feel inclined based on what you paid to basically pack as much food as possible onto that tray.
And while I can say that I personally would eat every on that tray. I can’t speak for everyone.
And so there’s actually a huge amount of food waste and a lot of food waste reduction that’s been done there. And that’s in terms of penetration of solutions.
That’s one solution that has actually received a good amount of penetration. So that’s the only case in which I would see that. But in this in this analysis, it It’s it’s just up the spoil Yeah.
It’s it’s anything that was originally meant for human consumption.
And then potentially we repurposed in a variety of ways.
So some of this it’s still considered food waste, you know, gets repurposed in other ways.
Some of it gets recycled, some of it gets put in secondary markets, some of it gets donated. So there’s a few different fast talk about how that how that can occur. Right. This is meant to sort of showcase some of the the scale of this of this challenge.
And so so why did so much food waste occurs?
There’s a number of different reasons that can that can occur in sort of each of these main segments.
Just as a disclaimer, manufacturers are typically much more efficient than Farmgate consumer facing businesses and homes. But if we talk about Farmgate, Some of this can be on the labor side.
So I if any anybody who’s been on some of our deep dive’s talking about automation, robotics, and and farm labor knows that there’s a major major labor crisis, particularly in specialty crops where there is a higher percentage of waste because they’re more perishable, more sensitive crops.
So we we see challenges there because of the lack of flavor, and then leaving fruits and the blinds that are that are sort of less stable in the field less stable in the store, so a higher degree of waste.
There’s increasingly stringent cosmetic demands for pro for produce. So there may be a certain amount of produce that is totally viable for human consumption coming off of the farm, but this may not be appropriate for the grocery store based on what consumers are asking for from their produce today.
And then on the farmer’s side, if you’re having a good year in terms of yield, there’s not necessarily an incentive to under produce particularly if you think that especially if if you’re already working in a in a low margin business like farming. So there may be an incentive too overproducing even if there are markets for your product, and you’re already sort of at at a similar fixed cost. So there’s not really a incentive to change there. On the consumer facing businesses, you know, you’re working with businesses that are sort of going through a consistent amount of variety in terms of menus and and offering trying to bring to the table.
So anytime that you’re bringing variability into a system, you are reducing the amount of consistency that you can have and also increasing potential for waste.
And I think there’s also when you think about the the layers here and this is sort of a simplified view, consumer facing business don’t necessarily have a great access of data into into sort of supply demands and and measuring that and forecasting that, and also has some challenges sort of seeing data throughout the supply chain.
And on the home side and this is where most food waste occurs on this cabin for a number of reasons. Sometimes it’s because most times we’re going to go short’s fairly unplanned. You’re buying things that you may not have a plan to cook or prepare some time over the the next given period, you may buy things that are not fit for frozen or or cold storage, things that you may not even know how to prepare.
Something may have a best buy date versus an expiration date.
So you may think it’s gone spoiled and it hasn’t necessarily.
I think a lot of us have been culprits of looking at milk, the milk or dairy products that say best buy or ex expiration date. And so one of one of, again, one of the non sort of it’s not a, I would say, a market solution, but is one that consistency over expiration labels is a is a big issue in this in the space and one that’s sort of a simple solution to create consistency for consumers because most of us aren’t gonna take the risk of drinking curve about if we’re not totally certain, you’re going to be safe.
The category is broken out up there or the supply chain, I guess I should say, did you find any data or maybe we’ll get through it on the types of food being wasted or where the you did? Okay. Great. A great segue, Craig. It’s almost like it’s almost like you’re helping me out here.
So this is so in terms of categories, eighty percent of food waste comes from perishable items. So that can include deli items, meats, fruits, vegetables, seafood, milk, and dairy. Some grain. I think the grain they’re talking about really is more along the lines with bread products where you might get bread mold.
When it comes to processed foods does obviously have a much longer shelf life. So we are seeing that most of the food waste comes from these perishable items and the majority coming from fruits and vegetables. The reason behind fruits and vegetables is not just that that have just that they have, obviously, perishable but not that they’re just highly perishable, but also the lower cost and some of these other items. So you have more consumers who are willing to purchase them with a lower plan, with a lesser plan, lesser cost to them for having bought and then wasted that that amount of those.
And seafood piece was a little interesting something that Carter brought to you when I shared this image with him. There were other reports that I saw that noted a lot more seafood waste And they they know to hear in the with the asterisk in this chart. But that there there may be much more seafood ways. I think one thing that we’ve we’ve learned in our experience working with aqua culture and aqua technology opportunities is that aqua is sort of one of the shadeus supply chains in terms of understanding how much the produced, how much the team wasted you’re getting. So that’s one area of I don’t know if somebody has a comment. I I noticed something went off mute here, so I’ll pause here if there’s a if there’s a comment from the audio.
If there’s not a comment, if somebody has joined if you oh, go ahead. Is that Eric? Yeah. Hey, guys. Good morning.
I I just wanted to say there’s another study that also merits looking at. And, you know, this one from REFET is is quoted off, and there’s another one from Amerus Ventures.
It talks about seventy five to eighty percent of all food waste occurring before it gets to retail.
Due to supply chain inefficiencies. So just so, like, I love the reef head reporting. It’s super deep, and it’s got a lot of really great information.
There’s Mayers that, you know, supply chain is is reporting that supply chain itself is a huge problem and bigger than what REPED thinks. So just just alternate set of data from supply chain?
No, that’s a really good point. That is something that did come up I think there’s one of the challenges that was brought up even in the refed report was surrounding just access to data that is meaningful, and that there’s there’s tools out there that are trying to measure food waste. But from sort of a life cycle management standpoint, it I I can I can only imagine what the challenges are trying to put together reports that are that are completely meaningful and concise given that you may not have access?
Was there any was there anything else in that MERS report that that might have differed from from things that are sort of considered common sort of knowledge instead of food waste or anything that that anything else that differs majorly?
Not that I so I didn’t have this is a full report. I just I grabbed that stat from a webinar from them because it was I was blown away, to be honest.
But I if I can get a hold of that I will definitely share it. That would be really helpful. I appreciate that. Yes.
So jumping forward from sort of the breakdown of what of what gets wasted, there are significant potential impacts inside of food waste. I would say, inside of the economic side of things, there is a potential for improved business profitability. We’ll talk about some of the challenges of sharing those efficiency gains. Some of the challenges for companies that are extending shelf life is or who actually end up benefiting from that shelf life extension, which is an an interesting business problem.
And also, there’s potential for increased job opportunities across sort of either from new companies that are repurposing ugly produce or they’re recycling recycling organic waste.
On the social side, there’s a potential to increase food availability that’s already being produced to date. It’s low hanging fruit, so to speak.
You want some of that ugly produce. It’s not in the environmental side of things. So most frequently quoted impacts are on the c o two emission side of things and on water usage both which take place at the beginning of the supply chain. So the inputs that go into agricultural production, and that and that are used to create food that we don’t necessarily need. And then on the back end in terms of sort of n r two emissions or other types of emissions or methane coming off of off of organic waste. In the end, so you have this double whammy of inputs, and then on the back end, any type of emissions that are coming off of.
Top of organic waste.
So the now that we have a little bit of a scope of sort of what food waste looks like, where it’s happening in the supply chain, what types of foods it’s it’s impacting the most.
And some of the some of the impacts beyond simply economic that we can talk about here. It’s important to sort of consider what the range of of reduction methods. And so this this refit report was really helpful in sort of helping frame some of this. And so what I what I tried to do in this was take sort of their framework for food waste for methods and apply it to some of the starters that we’ve seen in the startup landscape today, and we’ll sort of walk through some of that. But you can I I won’t read through all these data points, but you can see sort of their estimates for food waste prevention, food waste recovery, and food waste recycling?
From both a diversion potential. So the ability to reduce food waste from an increase in economic value and number of other points that are there.
These are all these solutions that are listed. You can you can find in this report.
Not all of these are are market based solutions. Some of these are solutions like releasing side to side of plates, removing trays, increasing consistency and expiration date labeling on food products.
So and then just to just to draw a quick distinction.
So recovery prevention is sort of it’s sort of obvious.
How do we do we better forecast, how do we reduce how do we improve shelf life sort of sort of baseline. The recovery stays and recycling stays are So the recovery stage is saying, this food is going to expire soon. It cannot be sold in the primary market. It was supposed to be sold in. We’re going to find a secondary market discount that we will sell into. That’s specifically what recovery is. Recycling is anything that has gone spoiled.
And so there are a lot of opportunities for where that weights can be used, and we’ll talk about some of those some of those avenues. But when I when I looked at this report and this might be better as a reader, the sort of top areas for for profit innovation, wherein supply chain operational efficiencies for analytics platforms, shelf life shelf life extension technologies, secondary marketplaces, renewable energy being captured from organic waste, composting comp composting companies or operations, We’re using food waste as a as a source of animal feed, repurpose.
Technology that can be used on on-site for for for processing of food waste and then specialty recycled products. Whether that be on it’s sort of a more of a CPG level. So there are companies who are trying to take, you know, like, wasted watermelons or ugly watermelons and turn them into watermelon juice and other types of consumer plays are being played off of this, planetariums is another one that we’ve looked at.
So those are sort of some of the main out of out of all the methods that are being used that sort of identified these as the main for profit areas.
And so we’ll sort of use it as the first foray into a into a an innovation category into prevention solutions. So Revention solutions spanned across the the the main technology that I noticed that were being utilized in terms of pure prevention.
We’re ways tracking analytics, shelf life preservation, supply management tools, and forecasting, and and packaging innovations. And I would I would guess I would say as well cold chain management. So it can basically rebound technologies.
I found that inside of prevention, there was the greatest diversity with startup companies that are working in this space.
Reports the refund report and others identified the prevention category as the simple simply the the highest value in terms of the actual value creation.
And it makes a lot of sense because the other two business models that are built off of the food waste problem are are sort of are capturing value from waste. And so there’s this In terms of places that you could make the biggest impact, it’s simply in food waste reduction.
And these sort of secondary and tertiary levels beyond that are are sort of necessary evils of of of food waste that occurs naturally.
And so But at this at this point, sort of considering that we’re we’re in this section talking about prevention, there are a lot of different methods spanning from both b to b to b to c.
Methods. I wanna invite Avi Schwartz from from Clarifruit to tell us a little bit about about what his company is doing to help fight food waste.
And and sort of what what they’ve seen thus far as a as an early stage company, some of the challenges they see going forward.
Okay. Thank you, David.
So I’ll try to I will try to do it as briefly as we can.
So Clarful is actually an automatic testing tool for the mass produce industry. We are a three years old, Israeli based software company.
David? Yeah. We’re here. Okay.
And so we are creating an, we have created an automatic in order to do automatic testing.
Maybe there is a little bit of noise coming from your mic. You can Got it. We’ll go on YouTube.
Okay. Thank you.
So we have created an automatic testing tool dedicated for the fresh produce industry. Actually, the idea I’ve been working for about twenty years in the software industry And I have been a senior R and D manager in a company called Amercore Interactive.
Mercury actually invented the automatic testing concept for the software industry. And actually, I found a lot of resilience between software development and the way that the fresh produce supply chain is acting.
And just to explain a little bit about the problem we are trying to solve, So we have detected a huge market problem. And the problem is that the price actually the price of this merchandise called first produce is determined before the deal is made. But the final price is being determined only by the buyer. And after the merchandise has arrived into the buyer facilities, and according to the QC inspection, that is done by the buyer.
Of course, this is a very problematic situation for the cello.
And if we are talking a little bit about numbers, So in the world, each year we have about four hundred million dollars transaction.
And when we are talking about transaction, we are talking about twenty three tonne shipment, with an average price of fifty thousand. Dollars And twenty five percent out of one hundred deals is being either fully rejected or partially rejected due to quality problems.
And when I’m talking about twenty five, I’m talking about five percent are being completely rejected, because the quality is not according to the customer, to the buyer quality standards. Another twenty percent is what we call being price adjusted, meaning that the buyer is telling the seller Thank you for sending me these table breaks. They are not one hundred percent according to the quality spec that I have. But I’m willing to buy them if you give me a certain amount of discount.
And of course, this is a very big problem. Where we’re talking about a lot of money. And what Clarifit is doing is creating an automatic testing tool where all starting from the beginning till then. So today, quality inspection is something that happens, happens by the billion in the industry.
But the thing is that the quality inspection is done with the tools that have been it’s hardly been changed in the past one hundred years. Meaning that all the quality inspectors still do all the quality using scales, using sizing rings, using color palettes, very old fashioned things. And after they finish collecting the information, they create this report. Everything is done manually.
So, we have created a platform that collects the information in advanced way, like image processing, using, of course, an app on the smartphone. So we’re doing everything analyzing imagery.
And after that, we analyze all the information in the cloud. All the information is going into the cloud and it’s being stored over there, of course. And then we are automatically creating a key report and basically telling what is the quality of this merchandise. And by that, we are doing two things. We are creating a language that the buyer and the seller both can talk in the same language. And we’re helping to reduce this amount of waste by actually helping the seller to divert the merchandisers to the right buyer.
After all, if I’m the seller, and I have one hundred percent of fresh produce, I can sell everything. But I have to know who is the best buyer for each for each fruit that I have.
Got it. Now, what At what point in the supply chain is is your solution being implemented? Do you see this being done more at sort of a packing house? Is this sort of closer to the grocery store, is it multiple points in the supply chain? How do you how do you see this being implemented?
So, at the moment, we are working with all the guys along the supply chain. We are starting from the grower in the post harvest position.
And through the wholesaler, the important, the retailer in several places inside the retailer, in the entrance to the DC, in the exit from the DC in front stars. So, actually, we’re working all along the supply chain. In one way, we hope also to be in the end consumer, but not in a moment.
And the I guess in terms of in terms of the consumer application, do you see that being like a main value driver going forward? Do you see challenges in terms of scaling that or whether or not consumers are are aware enough or concerned enough about about using an app like this in there by experience?
So the truth is that the technology is not that the technology is very, very easy to use and very, very effective, but it’s not ready for the consumer. So, we see the consumer in the end of the way, maybe five, five to ten years from now. At the moment, we mainly focus on B2B businesses.
And the consumer is mainly about getting the information about what is quality and what consumer wants. But we don’t see the consumer’s revenue generation.
Got it. But for now, it’s really more about identifying whether or not produce is is fresh enough for any given buyer and sort of creating better information in the marketplace to buy produce based on sort of what the quality needs are for sort of a diverse set of fires.
Exactly. Okay. Great.
Well, I’ll be really excited to learn more about your work and appreciate you chiming in here. If you do have thoughts or comments during the rest of the press during the rest of the presentation, obviously, we we love to hear more of your thoughts. But At this point, we’re gonna jump to sort of segment number two, which is on the recovery side. Which is not necessarily too far away from some of the work they they clear for just doing.
What I would say on the recovery side, this is really sort of more focused on taking produce that is going to spoil soon or that doesn’t currently have a market because it’s not because it’s because it’s imperfect or ugly and finding markets for it.
And so because this is more because this is a more sort of points issue. There are fewer there’s fewer diversity of solutions.
And so and there’s even midpoint solution like in a town.
No. I guess I guess so, like, in the in terms of prevention, there’s like a wide variety of technology employee. But in terms of imperfect produce and produce soon to spoil, the make there’s there are a lot of companies doing this, but a lot of them are doing the same thing. Or something that’s very similar. So they’re trying to create a marketplace that connect either consumers or businesses to a secondary market for produce at a discount and capture value or just value currently not being captured.
And so I would say, at this point, it’s not I would say there’s there’s definitely a viable business to be built there. But I would say that there’s not a ton of differentiation that has been super clear to me If somebody else has a different opinion on that, I’d be interested to hear it. But at this point, I saw a lot more potential for sort of either diversification or competitive differentiation at sort of the prevention stage and we’ll also see that on the recycling side. But in terms of recovery solutions, most of these companies are trying to build some sort of marketplace or matching solution for secondary produce, and there are a couple of early leaders who are doing that.
Some of the be that are selling directly to versus who wanna buy second hand produce and have it delivered to their to their front door.
But still still something that I think if we think about sort of alternative features of food waste, this feels like an area where there always will be an opportunity, just the size of the opportunity is not in terms of the long term is not necessarily clear. I think you wanna focus on point one, which is total reduction, but there may always be a certain amount of waste in the system. And so I think there is in terms of taking investments in each of these areas, there may be a a world in which you can make a strong investment in this space and that becomes really sustainable business going forward.
But that it is still built off kind of an inherent inefficiency in the system. That may that may persist over a long period of time.
So may not be a bad choice, but I would say the final area that I’m the least excited about in terms of new opportunities that are coming online. So is anybody doing anything where, you know, food’s coming through?
You know, x percent is gonna have to go into this path and that they’re buying long. In anticipation and that the actual execution is near term, but there’s a long agreement.
Like a like a like a forecasting tool that says we know there’s gonna be a certain amount of either ugly produce or produce that likely will be spoiled so you can build more consistency into that into that system.
Yeah. I think yeah.
So there’s there’s companies there’s companies like I’ll just jump quickly forward here.
So the company is over, like, on the far right, like, a fresh and crisp or two that I’ve that I’ve come across that are trying to build like, supply and demand, like, modeling and forecasting for those companies.
But I don’t know if they’re building in the if they’re building in that you would want to to have extra produce like that or that you would wanna build a market for or if they would just wanna reduce the amount that the brochures were buying and just sell whatever sort of the most efficient Well, it depends on if if you know that twenty percent could go down that path — Yeah.
— is twenty percent plus or minus thirty percent or plus it’s at six sigma word point there or, like, of CPK of — Yeah. — like point o five or point five. So there’s no way to build the system. Yeah.
So Any other any other comments or or questions from anybody in the audience on on this portion or anything that are seen?
Got it. Okay.
So on the recycling side, just again, to draw sort of a a clarification.
Had I in my opinion, had sort of the second most diversity of of startups across these sort of three categories.
This included harvesting of energy, production of organic agricultural inputs, animal feed, consumer products, and sustainable packaging solutions.
On the organic Ag input side of things. There were a lot of companies that are trying to produce compost and some sort of differentiated compostable product. Either on-site or in their own facility.
There are an increasing number of animal feed companies mostly on the insect side of things that are trying to repurpose food scraps into high quality protein where animals or or insects have a high high efficiency of conversion into protein and a low cost of of intact rearing. There were more there there were more consumer products than I think I was aware of.
That we’re taking we’ve waste and turning them into or either up cycling them in some ways to plantarians as an example of a company that’s doing that with Sunflower sunflower. It’s some sort of sunflower cakes that they that they have cycle into, like, chips and and other sort of product. They also may have an ingredient strategy going forward. There were never on the drink side. There would be purchasing sort of fruits into fruit juices that we’re never gonna make it to market. So There are some brands that are trying to build identities around being a food waste solution.
I don’t know what the consumer traction looks like yet for any of those products and whether those are But I would say the ones that were most intriguing to me were probably on the animal feed side.
Particularly if you’re able to sell into a sort of high quality animal feed markets or others like that.
So some of the implementation challenges that are associated with these implementation – with some of these these solutions, I’ll start with I’ll start with prevention.
So the misalignment and cost and cost and benefits was kind of interesting to think about. So when I think about something like a food preservation, like, maybe something like an appeal science is working on. There’s a there’s a degree to which the solution to be sufficient both for the business and the consumer because you’re increasing shelf life And that’s and that value is being passed on to the consumer. But the consumer still has to have an incentive to wanna buy the produce with that increased shelf life or with that ink that that will reduce waste. And so you have to get not only a a b to b buy in to say we wanna implement this this slight increase in cost on all of our food. But we also have to make sure that consumers agree that this is important and valuable to them.
And so there’s sort of a double whammy of communication as to occur there, which makes well, I think I hadn’t thought about it this way, but it makes it more complex to implement these types of solutions and make sure that everybody throughout the value chain value of that increase that increase shelf life.
So there can be there can be that aspect. Some of these other ones we’ve we’ve already talked about the consumer expectations. The consumer expectations were to change for imperfect produce, then we wouldn’t have as much of a big problem for that. Be able to sell. Well, so if we think about preservation, when we look at tomatoes — Mhmm. — we bred tomatoes to have preservation, but gave up on pace. Right.
Notionally with something like appeal, you can get preservation for something that hasn’t been bred. Mhmm. So a little lost as to how you decide the breed preservation in or you apply it somewhere else in the system, and does that give you a different option? If we’re talking about late in demand of trying to if we’re trying to improve quality of food in person, sending them crappy tomatoes that And look at your last long high chain foods like crap. Right. I it’s suboptimum plus it takes a long time to breed stuff. So, you know, that that next is a sort of design for preservation is versus nutrition.
There’s a lot of weird time domain dynamics there. Maybe there’s two it’s way in the two hard box. Well, yeah.
I mean, I think I mean, hindsight is twenty twenty, but I think that there’s a there’s it feels like you would wanna focus on quality improvements, right, to the crop that are more on the nutritional side or things that can’t be solved or by other solutions where you can just spray on something that is natural and Well, we take we take lean six sigma — Yeah.
— the concept was designed for reproducibility.
So design for manufacturing design for your visibility, it says, from the factory, design out the waste.
In this particular case, it’s the correct insertion points of waste.
So you would say design the product and design the service delivery model plus you’ve got Again, we’re tied into Mhmm.
So I’m gonna breed a crop, prove a crop, make it all. So that’s a five, six year cycle.
You’re not a quick You have a quick fix cycle there.
Whereas spray with appeal.
A minute. It takes anything and makes it better — Mhmm. — in a sense. Yeah.
So that becomes a better place to invest.
Because you get more rapid feedback and — Mhmm. — you don’t have to do anything to the inherent product. Right.
The the other thing that I’m a little lost on is When you’re doing things like fruits and vegetables, they pretty much show up at the endpoint intact. There’s an awful bunch of, you know, modify the strawberries or the apples in the supply chain, whereas when you take soy corn, it goes through a lot of other processing before it shows up to zero.
That’s a that’s a product. Right. Or in a in a wide variety of product, shows up in a way — Yeah. — from impossible burger to — Yeah. — to cheerios. Yeah.
And so even those paths are different.
I don’t know. I don’t I don’t know about that.
But it is the one beauty about green soy, etcetera, is that it doesn’t matter when you grow it. It’s got such a long — Mhmm. — shelf life that it evens out any of the production cycles. But on the perishables, you know, you there’s a peak season for tomatoes that are at least that are on outdoors or stronger somewhere in the world.
So until you can smooth out production, the more closely matched demand, I’m not sure that you know, either is the right solution.
I think you still may always need some of all three of these Yeah.
Trying to realign the production cycle to match the match demand as well as something that you know, inside retail that extend the shelf life of product because there’s there’s periods of you know, higher and lower demand on a regular basis there as well.
And if you can do it genetically or upfront and a briefcase that’s better as well. But I think that’s the long sleeve translation of automation for all three.
And so one of the engines we heard from Taylor Farms two years ago was the number one thing they were searching for was something to better predict the old for the for them so that they could do a better job of forecasting the supply to meet demand.
Do we know if demands are really variable?
Like, we always have the same meeting, you know, every Tuesday night.
Tuesday, everybody. It was it was the same routine. I mean Yeah. Is is demand side?
I mean, I guess — the main one that is a kid growing up to their mom’s No, we’re still I mean, it feels like it maybe it’s a at the rest at the restaurant level, it certainly would be. Because, I mean, you just you’re just trying to you’re trying to create variety.
I having been in the food industry, I guarantee that my brands had seasonal cycles to them.
And certain monthly spikes I mean, pizza would be if you made it with a month for pizza, January.
Why? I’ve had a super cold. Super cold. It’s cold. Everyone’s in.
Super Bowl is the single biggest pizza event in the year. But when I does anybody on the call upstream of that know that?
I mean, how much does it come?
It’s a hard problem.
David, I’d like if I can divert from this a little bit. I wanted to go back to your comment about convincing consumers to pay a little bit more of a longer shelf life.
I really think that This is Rachel.
Yeah. I really think that this is that’s a niche part of the market. I think that if you’re if you’re gonna have a large scale impact and a large scale value proposition. This has to be a supply chain, you know, the the solutions that are gonna have the greatest value over time for the investors.
And in terms of impact, have receivable supply chain solutions they have to reduce waste or whoever is paying for that product. So if you’re, you know, a supplier or a retailer and you whoever has control of that product and is feeling the loss for that, that who that’s that’s who has to you know, that’s where the value proposition has to be. And in the consumer, if they’re having to throw away half of their berries or something like that.
You know, that is an impact, but it’s a small — Right. — of an impact, and it’s not gonna be a large scale.
You know, that that’s gonna be a harder value sell at many more points of contact, the sale versus a supply chain solution that can be sold for a large impact you know, value.
So I would kinda disagree with that, you know, selling the consumer for this reduced food waste benefit.
That’s a very niche area at this point, in my opinion.
Yeah. I agree. Yeah. Well, I guess I guess maybe my point wasn’t so much to argue for that that that’s the work that’s where you would want to create the value, but that there are aspects to which that plays into those solutions being successful. But I don’t I I totally agree with you that that that the value would be created and the overall reduction and and those are going to pain point in supply chain. So I think that point is fair.
Do we actually open?
Sorry. This is Eric. We’ve already just wanted to add another data point that I thought was super interesting regarding the variable demand.
I trade network did a report about twenty fourteen that said there’s an average of seven major changes to every PO of imported food.
While it’s en route. So from the time it gets ordered and put on the ship, the PO itself changes in terms of the quantities, an average of seven times.
So I think there this a lot of this is probably software at the Costco, you know, forecasting center, making changes to these POs to try to to be more precise in in what their demand is, but the the food’s on a ship.
And by the time it gets to the dock and it’s not needed anymore, it just gets tossed.
So I I that’s a that was an interesting pain point for us in the supply chain that fuel this idea from Maers that that a majority of the school bus occurs before it even gets to retail. So just wanted to toss it in there too.
That’s a great point. We see that loud and clear here in Boston where we see a bunch of that stuff getting sold off for a dollar yet at the shipping markets.
So it’s like you guys, and as as anybody ever played the beer game But some logistics exercise, not the beer game, isn’t drinking beer, I think.
My advice, I mean, you’ve got ten or twelve people in the supply chain and you you pass back and forth a note of how much how much you have an inventory and how much you’re gonna order. And when you play it, you somebody at the front end store changes their inventory a lot when it goes all the way back to supply chain one.
Enverably, whenever somebody does this, the thing just turns into a mass or just flying or flying at the end of the game. Say, what was the change on input and demand and all the change that demand with the CSOR went from five cases a week to six. That was it. One step function.
And it causes the entire supply chain to misunderstand disability. So, you know, that even simple things like that is, you know, classic six six sigma says you need visibility quality across the entire supply chain. If you don’t have it, you can’t minimize waste. Yeah.
So on this front, do we know is there visibility on waste? My guess is again, if I go back to quality, this has been involved and if we’re seeing a thirty percent waste, it’s probably fixed. Because we’ve gotten disciplined too.
Any quality system, you guys scapes. And as your weight stream goes up, your your instances of escapes, disproportionately grow.
So if we’re talking about twenty percent measurable ways, we could be talking about thirty, forty percent.
So are there any good have we seen any good reports about where the waste is and what the marginal value against resources is. So we’re seeing waste part of the conversation here is we’re investing on the idea that we’ve got a population problem, we’ve got to feed. Well, technically, if there’s enough waste, we might build fixed capacity since we’re getting our waste without increasing resources.
So if we’re gonna invest in improved yield, but we saw a lot of waste, that’s, you know, what? So we’re putting out same time.
So there’s a liability if the wait stream is so high that if if someone else fixes that before we improve yield, there’s no value of our yield improvement in the brand. So on a marginal value basis, do we have any kind of data that says in the on a resource input standpoint versus waste output standpoint.
What’s the energy balance?
So we put all these resources in the farming and the waste stream is this.
We’ve used up the effective capacity of ten million acres of land — Right.
— just to produce waste.
Whereas in tomatoes, we’ve used up an effective capacity of two million acres. Just to produce waste. Is there any have you seen has anybody seen any kind of analysis like that that sort of does a a resource balance analysis where the greatest marginal value would be.
Because to some degree, all the stuff that we’re doing to improve yield could be really a stupid investment if the marginal, if we could per dollar invested, reduce waste faster than we can improve yield.
I just can’t figure out how to get through the waste stream. Because it’s not about I feel like an idiot investing more on recovering waste.
I like to design waste out. Again, my intuition is nine weeks out. Right.
It’s a hard problem.
It was a very hard problem. Anybody think it’s an easy problem?
I’m gonna jump forward from here just to a few areas. I thought were were interesting and and companies that sort of line up in a few of these categories.
I think appeal is one that we obviously all know well about is doing natural coatings for for avocados and some other highly perishable goods. There are a couple other players who are coming up in the shelf life extension category. Including halo technologies and Cambridge crops, halo is more of it feels like these packets that they that they throw in boxes or with.
Alongside footage to help reduce Help produce spoilage and Cambridge crops is a little similar to appeal sciences, hoping to have them on agri food conversations this month. They They have sort of a a silk a silk protein coating that they can put on.
Not just produce, but it looks like they’re targeting meats and seafood and a variety of other products. So I don’t know how how that will play into the kind of work that appeals doing You know, if appeal is successful sort of beyond this most recent round of financing, I wonder what it does for sort of opening the door for other sort of coatings, natural coatings, shelf height shelf height extenders, and whether or not it’s sort of increases the market opportunity if there’s room for numerous solutions and player that feels like there would be room for numerous solutions.
But I don’t necessarily know how many sort of technical approaches there are to achieving that. So that’s one area where I’d like to to continue looking for one for innovators on the secondary produce markets, you know, I don’t know if it’s an area that I’m incredibly excited about going forward There are some players who are who are sort of out ahead, like, imperfect foods who’s doing it more on the b to c side, Food Maven, who’s doing it on the on the b to b side, both are sort of at the the sort of later series b sort of growth phase, I think, in for through this or the highest valuation of any of them.
It was I was trying to find some more information on sort of how these how these companies are doing commercially.
Not having spoken to them specifically or or recently. It was it was hard to sort of get an evaluation of that if anybody anyway, does have context on how companies, like, imperfect user who may have been are doing, I’d be interested to hear your thoughts.
On the up cycling to insects on the animal feed side, there’s actually been a lot of activity and seeming seeming success there from companies like Y insects, protix, agri protein, beta Hatch is is and one of the sort of newer players who’s who are working there. One of the things that I find a little challenging to understand is sort of there’s I think people will think about sort of food waste recycling via some of these means.
Then I start to wonder sort of what the what the quality of the waste needs to be in order to produce high quality protein going forward. It’s something that that Virginia and Emery from beta have sort of reiterated to us is that, you know, there’s certain sort of quality basis you have to have.
So quality control on wasted on waste stream is kind of an interesting idea.
And and kind of speaks more to the fact that you need better prevention. But these early stage insect companies are even later stage ones are seeming to benefit from at least a low cost as a as a feedstock, a new type of animal feed source.
And the one that I’d like to look more into, and and it’s interesting when you start, you know, you’re looking for companies on the web and you’re using sort of food waste as a keyword try and search for companies. There’s there were more and more companies that I mean, like, if a fresh technology is is is the one that’ll come up the most if you’re looking for sort of supply chain demand for grocery stores that’s focused on food waste, but there were more that didn’t really use food waste in their in their descriptors that you could find Something retail is a little bit later stage, but Chris is one who’s sort of a series b stage company that’s doing that kind of work. And so there may be more more of those that are working on sort of being a better ordering system for grocery chains and for and for retail that may have impact on food waste, but maybe they’re they’re core value prop isn’t food.
And food, spelled in a p h, it’s doing our aggregate webinar tomorrow, it is also a pretty unique way as well.
They’re a little bit earlier. But Are they for the restaurant level?
I’m actually present on the call here Max from food.
I’d be happy to give you guys I’d be happy to give you a broad overview.
Yes. So when you showed that graph earlier about high impact solutions.
We describe ourselves as a waste tracking and analytics company that helps commercial food businesses reduce their food waste.
And how we do that is that we actually have what we’ve branded as a smart scale that’s in the back of the kitchen.
That has a scale, tablet, and camera all integrated together. And so when they’re when they take a pan of food, they place it on the scale, our camera mission technology picks up what is put on the scale, registers the weight and what the food is into a database, and then we use that data to come up with forecasting models about how they can reduce their purchasing.
Well, thank you for for for chiming in. Apologies that we hadn’t noticed you were on the call yet. Luca, is there anything Is there anything so far throughout this presentation that sort of jumps out to you or anything that you’ve learned as you’ve begun to sort of implement the food solutions tool and any challenges you’re seeing, opportunities that weren’t mentioned, would be curious to hear any thoughts you might have thus far.
Yeah. I’ve been sitting back just listening. I do think that one of the biggest issues that we faced even doing our own research is just kind of conflicting datasets.
I I was hearing someone mentioning that the the largest portion of waste coming from the production side.
The research that we’ve looked at believes that it’s mostly on the consumer facing businesses and consumers themselves.
So conflicting data sets and kind of knowing which markets to tackle.
But other than that, it’s mostly our biggest challenges that we faced in the past have been menu integration and then getting staffed by in. As soon as you You almost have to set up the system in a way that you’re empowering staff members and educating them on what the value of their of what they’re doing. With the process so that it doesn’t just feel like an extra thing on their plate. They you have to be able to educate them on what the value of using the system is. Else people tend to not use it.
And we’ve gone to great lengths to come up with educational materials for staff members using it as well as make the system as usable as possible, and that’s where we ended up developing the recognition camera because it makes it such a quicker interaction for a staff member.
Mhmm. Mhmm. I understand.
Well, Luke, appreciate your perspective. And and again, for anybody who is planning on attending Azure food conversations on Thursday, Luke and food solutions will be featuring their work and we’re excited to have them on board.
So jumping forward here. I just wanted to give a brief sort of some context on some policy collaborations that were taking place in some of the research leaders that I came across.
On the research leader side, you know, I found that refed and was a was a really great resource in terms of market research. They have a great innovator database of both startups and not start ups.
Food loss and waste protocol is an interesting accounting method and tool for measuring food waste. And that of the FAO had a nice had some nice materials on perspective on international food waste. I think a lot of what, you know, I’ve covered today is is really US focused, but this is obviously a wide international problem. I think that any of the companies that are looking to integrate into the food supply chain or looking to do so, not only in the US, but in other other countries, particularly as as they continue to develop and and may have larger food waste issues.
One of the major policy collaborations is between the USDA, the FDA, and the US EPA with a food waste reduction alliance to form the winning on Foodways initiative, which is set a goal to reduce national US food waste by fifty percent by twenty thirty. And they’re joined alongside a number of grocery and and retail outlets.
And so I think that’ll be you know, it’ll as we start to think more and more about investing in companies that are specifically focused on the food waste problem, alignment with some of these policy initiatives will be important to understand just because it’s a multifaceted issue.
And so finally, this is just some final thoughts on where there might be some opportunities inside of the Food Waste paradigm, if you have additional thoughts on where you think There are opportunities that aren’t mentioned here, challenges that we’re not looking at or maybe some market adjacencies if you’re looking at, that would be interesting to hear what you have to say.
But what I found was sort of opportunities at the front and the back.
I would say most compelled by the opportunity to reduce waste I think Carter articulated well sort of thinking of this as sort of a lean six sigma way in in trying to reduce waste at the source but also understand that that may not be always a one hundred percent efficient system.
So I think finding ways to better reuse for upcycle food waste is another opportunity where there maybe was more differentiation amongst companies and technologies.
Talked about companies that are working with shelf life extension.
I think companies that are becoming more increasingly verticalized between food production at the farm level all the way through supply and manufacturing and the grocery and closer to the consumer. The more that those those players become verticalized or a better able to share information and data and trust then some of those tools that operate between those players become more effective.
And so that should be something to to watch for and see if there’s any business model innovation there.
I think the value creation and sharing of that across these players in the supply chain for food waste reduction is is important to note to make sure that stakeholder alignment stake stakeholders are aligned in terms of who’s benefiting.
On one one thing that, you know, was thinking about, we didn’t talk much about where things like indoor farming technology or others that may help improve this verticalization or better improve our ability to match supply with demand given seasonal changes, and sort of the inherent variability and sort of some of the pickiness that consumers may have, so trying to find ways to better align those.
So those are some of the technologies we didn’t talk about, but maybe some trends that we want to pay attention to going forward.
These are some companies that I thought were interesting and compelling for us to to pursue following this call.
But at this point, I’d like I’d like to pause here.
If there’s any final comments, questions, thoughts from from our audience members on this challenge of food waste in any areas that maybe we should consider for future future webinars.
If there are none, we are concluding here at just over the top of the hour. I wanna thank everyone for for participating on today’s call. For anybody again who was new to these deep dive webinars, we host a food and agriculture and healthcare webinar deep dive every month. I believe it’s typically the first it’s typically the first and the third Wednesday.
Every month, I think, in January, we deferred from that schedule because of the new year. But typically, we’re doing a food and agriculture webinar on the first Wednesday and a health care webinar on the third Wednesday of every month. If you’d like to join on the future webinars, we absolutely invite you to do so. If there’s anything that we missed or anything that we should that we should be considering going forward, please do less now and don’t hesitate to reach out.
But thank you for your time today. We look forward to seeing you in a couple weeks.
Thanks, David. That was pretty good.
Good day, baby.