A venture-backed technology startup, FoodMaven, is tackling the US$161 billion per year industrial food waste problem by allowing food producers and suppliers to earn a profit from once landfill-destined food.
FoodMaven’s passion for reducing industrial food waste comes from Chief Executive Officer Patrick Bultema’s farming heritage. He grew up in the immigrant farming community of Richvale, CA where his entire extended family are farmers dating back many generations. Bultema tells Food Tank, “My grandfather taught me a deep sense of stewardship for food and the land. He told me that if I took care of the land, it would take care of me.”
FoodMaven is a for-profit startup that boasts investors such as the Walton family (Walmart founders) and continues to expand and make acquisitions. It has relationships with some of the largest food companies in the country with new announcements coming soon demonstrating an industry desire to tackle food waste through advanced technology.
After leaving the family farm, Bultema initiated technology-focused startups and wrote eight computer science books while also studying Artificial Intelligence (AI) and Big Data. And he became more interested in food waste. He learned that uncovering the cause of industrial food waste would not be easy due to the industry’s desire to avoid addressing the long-standing problem. In 2015, Bultema established FoodMaven, combining his computer science skills with his farming experience.
Bultema says that about half of U.S. food waste comes from households, while the other half stems from a system that includes just-in-time consumer demands, food that doesn’t meet agreed-upon specifications (referred to as out-of-spec), and an antiquated food system.
Just-in-time consumer purchasing expectations, that include the consumer’s desire to purchase all their items at one place, force grocery stores to keep store shelves stocked. Food suppliers must overproduce to meet this demand. “There is a 40 percent chance consumers will switch to a different store if they aren’t able to purchase all their items at the same place,” says Bultema.
Suppliers remove food that fails to meet agreed-upon specifications from the supply chain because of brand, ingredient, or marketing changes to ensure compliance. Suppliers must dispose of this edible food, creating an additional source of industrial food waste.
Equally important to the industrial food waste problem is local farmers’ lack of access to local markets, which often leaves them with an oversupply of fruits and vegetables, says Bultema. Cost-prohibitive fees, an inflexible and complicated nation-wide distribution system, and local suppliers’ inability to meet large-scale distribution network standards are just a few of the reasons why local suppliers don’t have access to local food markets. In addition, commercial kitchens found in hospitals, hotels, and restaurants typically have no convenient way of sourcing local products, which force them to purchase from national brands. “Sourcing local food items can be challenging for already-established hotel chains, which often need to reach out to multiple suppliers for specific food products,” says Bultema.
In addition, the industrialization of the food system created an inflexible infrastructure with distribution hubs that often require fresh produce to travel many miles before it reaches the store shelf. Bultema tells Food Tank, “Lettuce is a perfect example of the inefficiencies in the food supply chain. Nearly 98 percent of romaine lettuce in the U.S. is processed in Salinas, CA regardless of its origin. It may only have two to three days of shelf life left after it travels to its final destination. As a result, consumers throw away up to 70 percent of leafy greens in our country.”
Consumer’s unwillingness to purchase imperfect produce means farmers either leave it to rot in the field or simply throw it away. Recent tests by Walmart and Whole Foods to encourage consumers to purchase produce that isn’t the right size or has small blemishes at a discounted rate is coming to an end due to lack of consumer interest.
And Bultema expresses his concern over the term food waste. “Who wants to buy food waste, anyway? In many cases, it is perfectly good food, but the industry has labeled it as food waste, which has sealed its fate.”
He’s also trying to change the current food supply chain. Bultema tells Food Tank, “We need an enlightened food system that connects oversupply and local suppliers to markets. We need to create a more flexible distribution system that gets produce to market faster before it spoils. We want to create a market for out-of-spec foods, so they don’t end up in a landfill. The current food system is concentrated and has created a lot of unintended consequences. Food waste is a symptom of the system. FoodMaven leverages AI and Big Data to address these problems.”
“Our relationship with Red Bird Farms embodies what FoodMaven does. They make an exceptionally high-quality product that sells in retail and is always fresh, never frozen. Each week they freeze excess chicken product. This causes the product to fall out-of-spec and therefore Red Bird Farms can’t sell it into retail. Through our technology solution that leverages Big Data, FoodMaven has connected Red Bird Farms and a new non-retail customer who is receiving a top-notch product below the normal cost. Red Bird Farms is now making a profit from food waste.”