- Apeel Sciences raised $250 million in new financing, valuing the business at more than $1 billion dollars, the company said in a statement. GIC led the most current capital raise. Other investors include Viking Global Investors, Upfront Ventures, Tao Capital Partners and Rock Creek Group, as well as celebrity investors Oprah Winfrey and Katy Perry.
- The funds will enable the company to continue tackling the food waste problem. In 2020, Apeel estimated it is on track to save 20 million pieces of fruit from going to waste at retail stores while also extending shelf life in the home, where food waste rates are three times as high.
- “Food waste is an invisible tax imposed on everyone that participates in the food system. Eliminating global food waste can free up $2.6 trillion annually," James Rogers, founder and CEO of Apeel Sciences, said in a statement. “Together, we’re putting time back on the industry’s side to help deal with the food waste crisis and the challenges it poses to food businesses.”
As consumers around the world deal with the coronavirus pandemic, strains on the food supply have become increasingly evident. Meat plants have shuttered as the virus impacted workers. Farmers have been forced to dump milk, toss eggs and plow under fields of produce as the challenges facing foodservice outlets has decimated demand. Increased food consumption at home hasn't been enough to make up for it.
The outbreak has further shined a light on food waste, a problem underscored by the fact that 820 million people — or one in nine around the world — are going hungry. With the Earth's population expected to reach nearly 10 billion by 2050, there is pressure to produce more across fewer acres and reduce the food waste that is generated.
According to a study by Future Marketing Insights, the food waste business was worth $46.7 billion in 2019 and is expected to grow 5% during the next decade. Apeel is not the only company in this game. There are others with their own solutions, including Israeli packaging startup Sufresca and shelf life-extending packet producer Hazel Technologies.
Apeel, whose plant-based product helps food stay fresh longer when applied to the skin of a fruit or vegetable, is aiming to double or triple the shelf life of many produce types without the need for refrigeration.
The California company estimated U.S. retailers that use Apeel have experienced a 50% reduction in unsold produce, a 5% to 10% growth in dollar sales, and an incremental 10% growth in sales when sold in conjunction with in-store marketing campaigns. Armed with those statistics and increased interest from consumers, it's hard for low-margin retailers not to be intrigued.
Consumers are increasingly caring as much about food waste and the environment as ingredients and nutrition when they decide what foods to purchase. In a 2019 food waste and upcycling survey of more than 500 consumers, Mattson found 74% saw food waste as an extremely big issue, while 26% said it was somewhat of an issue — meaning at some level, all people see a problem in need of a solution.
This gives added incentive to food manufacturers and retailers to take steps to curtail food waste, giving consumers another reason to buy their product or visit their store over a competitor. Already many businesses have. Kroger announced last September it was expanding its partnership with Apeel to bring more of its produce — including avocados, limes and asparagus — to more than 1,100 Kroger stores across the country.
Companies like Apeel that can lower waste output and increase product shelf life will undoubtedly find greater demand for their services. It's no surprise Apeel has seen its valuation soar to more than $1 billion, and has attracted big-name investors like Oprah Winfrey. As food waste becomes an even bigger issue in the coming years, it will take many different groups to tackle it, but Apeel's latest cash raise gives it a front row seat in what will be a daunting job ahead.