One in three people in the labor force depend on agriculture and food production for their primary livelihood. However, a third of the food they produce does not make it to market due to losses in the supply chain. Those losses surpass the amount of food wasted in retail, food services, and households combined.
In sub-Saharan Africa, about 50% of the fruits and vegetables produced at farms never make it to market for consumption. In Kenya alone, this results in more than $594M of post-harvest losses each year, directly diminishing farmers' incomes. They also lead to greater food insecurity; 32% of Kenyans face food insecurity or poor nutrition, and 25% of children under 5 years are stunted due to chronic malnutrition. Similarly, in Latin America, even though there are nearly 50M people who suffer from hunger, 15% of food is wasted each year, with losses occurring throughout the supply chain. Likewise, in Asia, up to 20% of food is lost or wasted in spite of the hundreds of millions of people living in hunger in the region.
That so much food is lost or wasted is even more troubling, knowing that over 828 million people (more than 10% of the population) were affected by hunger in 2021. Hundreds of millions of people would materially benefit from interventions to decrease food loss and waste.
The environment is also affected by food loss, which contributes roughly 10% of total Greenhouse Gas (GHG) emissions, primarily during decomposition, which generates methane, a GHG that is 25 times more potent than CO2 at trapping heat in the atmosphere. If food waste were a country, it would rank third in terms of GHG emissions, just behind the United States and China.
In all, food waste has a myriad of negative impacts: people who need food are not getting it, the food that is not getting consumed is heating up the planet, and the livelihoods of climate vulnerable farmers are impacted by both the lost income, as well as the wasted effort and inputs.
Startups are innovating tech-enabled solutions
Technological innovations are enabling these solutions to scale, better tracking, greater reach, and cost-effective infrastructure.
Mobile devices allow for the digitization of smallholder farmers’ data on their agricultural operations, which can then unlock access to credit as well as help optimize cultivation.
Both consumers and retailers are already comfortable with leveraging e-commerce for purchasing all sorts of goods, services, and other supplies, agriculture included. By setting up digital commerce channels, agritech startups focused on food loss can more efficiently create markets for food that would otherwise be wasted.
Carbon credits and the supporting carbon credit ecosystem (e.g. project developers, verification and MRV service providers, etc.) are an important innovation that is facilitating finance from emitters to such innovators who are ultimately offsetting large amounts of GHGs that would otherwise result from food waste.
Given the simultaneous issues of food waste and insecurity globally, we are encouraged to see innovators tackling these problems from various angles all around the world. We are proud to feature such a solution in our own portfolio; Farm to Feed, which is based in Kenya, is a startup that we invested in at the end of 2022 and (as of June 2023) are continuing to support through our bespoke venture building.
Imperfect Foods is a SF-based, venture-backed startup that tackles food waste by rescuing imperfect produce and delivering it weekly directly to consumers via a subscription service. They saved 22K tons of food and prevented 20K tons of CO2eq in 2020. They were founded in 2015 and have since raised over USD229M up to Series D.
Full Harvest is a SF-based, venture-backed startup that has built a B2B marketplace for ugly and surplus produce, selling 50M pounds of produce as of 2022. They were also founded in 2015 and have since raised over USD39M up to Series B.
Agromyx tackles food loss and waste, focusing on processing these produce into powders and other packaged goods which boast longer shelf lives, selling them B2C.
A Catalyst Fund portfolio company in Kenya, Farm to Feed is a digitally-enabled platform focused on reducing food loss and waste, in turn reducing greenhouse gas emissions, increasing farmer incomes, and making nutritious food affordable to consumers. They do this by aggregating imperfect, rescue, and surplus produce from a network of thousands of smallholder farmers across Kenya and distributing it B2B to customers such as feeding programs, retail markets, and food processors at affordable prices. They are also currently in the process of unlocking carbon credits as an additional revenue stream.
Utilizes black soldier flies to process food waste into value added products in order to prevent it from reaching landfills. While they initially focused on converting the food waste into animal feed, they have since pivoted into higher value added ingredients: melanin and chitosan, which can be used as inputs in cosmetics and nutritional supplements. They recently raised about USD1M, primarily from local Singaporean investors.
A non-profit that is tackling the issue of ~300KG of food waste per Indonesian citizen per year on average. So far they have rescued nearly half a million portions of food amounting to 113 tons and benefitting over 25K beneficiaries.
While food loss and wastage is an issue in both developed and developing countries, the root causes in each respective market may differ. For instance, in developing countries food loss tends to be unintentional in nature due to poor infrastructure, such as lack of refrigeration or storage facilities, problems that are exacerbated by hotter, more humid climates in the global south. In contrast, in developed countries, food waste tends to occur further along the supply chain, with retailers rejecting food due to cosmetic imperfections and/or sizes that are not up to par, or waste taking place in households.
