FoodMaven raises $8.6M to help fight food waste
FoodMaven, a Colorado-based startup working to reduce food waste, has raised $8.6 million in Series A financing, according to Food Business News. This initial round includes funding from the Walton family, which owns about half of the Walmart retail chain.
The company, which started operating in July 2016 and counts former Whole Foods co-CEO Walter Robb among its board members, buys excess food items from retail stores and distributors and sells them via an online marketplace to restaurants, institutions and commercial food preparers. It also handles locally grown food as well as imperfect items with minor cosmetic issues. FoodMaven has about 700 customers in Colorado and expects to do about $10 million in revenue this year.
“We are deeply grateful for the vote of confidence this financing represents for what we are doing, but also for the shared passion of creating a market-based solution for a number of societal issues that include: food waste, hunger and negative environmental impacts,” Patrick Bultema, chairman, CEO and co-founder of FoodMaven, said in a statement.
The U.S. throws away about 40% of the food produced here every year, with an estimated value of about $200 billion. While plenty of non-profits and charitable organizations around the country do what they can to intercept usable items and get them to needy people, FoodMaven has a different model. The for-profit company sells as many unwanted food items as possible and donates whatever can't be sold.
The food industry has been working on the problem for some time. In 2011, the Food Marketing Institute and the Grocery Manufacturers Association established the Food Waste Reduction Alliance, a coalition of manufacturers and retailers seeking to reduce food waste through recycling, charitable donations and other means.
Kroger recently ran a TV and radio ad campaign to raise awareness for its Zero Hunger | Zero Waste initiative, which aims to end hunger in the neighborhoods the retailer operates in and eliminate company waste by 2025, according to a company release. The ads ran through the holiday season in 191 U.S. media markets. Manufacturers are addressing the problem, as well: Morton Salt has produced an anti-food waste video to call attention to the problem, and the company said it plans to eliminate food waste at its offices and operations by 2030.
FoodMaven will use the cash infusion from this latest funding round to support logistics capacity, invest in technology and innovation, and hire more employees and leaders, the company said. The group also plans to expand its operations to 100 metro areas over the next five years.
It doesn't hurt the cause that Walter Robb, co-CEO of Whole Foods Stores, joined the FoodMaven board this past fall and also invested in the company. The fact that FoodMaven diverted more than 800,000 pounds of food from landfills in 2016 was part of the ongoing success story that reportedly drew Robb to the project.
The Walton family isn't known for supporting causes like this one, but food waste significantly impacts the country's largest retailer. According to a 2016 blog post by Frank Yiannas, Walmart's vice president of food safety, Walmart has standardized its product date labels to state "Best if used by" and found ways to divert usable fresh produce that might previously have been tossed out for imperfections.
Produce is one of the largest problems when it comes to food waste, especially at the retail level. In 2015, approximately 6.7 billion pounds of fruits and vegetables went unharvested or unsold by growers, according to a study by the United Nations Food and Agriculture Organization and World Economics Forum. Poor ordering and forecasting processes are two causes, but grocers are also used to overstocking items to provide as much choice as possible to shoppers.
FoodMaven has done quite a bit to divert food waste in Denver and Colorado Springs, and now it has the financial backing to start implementing its ambitious plan in metro areas across the country. It will be interesting to see how well it addresses the difficult but ultimately solvable food waste problem.