Leftover are seen as a business opportunity by some entrepreneurs.
According to ReFED, which is a nonprofit focused on reducing food waste – $57 billion of food is wasted every year by restaurants, supermarkets and commercial kitchens. Furthermore, $15 billion of food never leaves the farms even though it’s produced.
Graduates of the Massachusetts Institute of Technology’s business school founded Spoiler Alert in order to help food manufacturers and wholesale distributors better manage their unsold produce and increase donations. The behemoth of food distribution in North America, Sysco Corp, reported that Spoiler Alert helped it in terms of redirecting around 700,000 pounds of food which worth was estimated at about $1 million.
Sodexo SA, Google’s parent company Alphabet Inc, IKEA, Aramark Corp., and some other companies with commercial kitchens are being helped by LeanPath of Portland, Ore. To track and reduce food waste with the help of technologies like cameras and scales.
FoodMaven, which is a startup company based in Colorado Springs, Colo., is contributing in the restaurant business by connecting suppliers that have excess turkey or lettuce with restaurants and other food-service companies that usually buy those produce at a discount. The former co-CEO of Whole Foods, Walter Robb (but still remains in the grocer’s board), made an investment in FoodMaven and joined the board of said company during its first push into the industry since the acquisition of Whole Foods by Amazon.com in August.
Mr. Robb said: “It uses the power of markets to actually try to solve a problem.”
There’s a chance that startups could reduce some of the food that in some other case would be donated to charities, however, there are some other companies which help with facilitating the meals going to the hungry.
The FoodMaven’s website can be used by sellers to list items while the startup helps with marketing and logistics and, in turn, takes a percentage of the sale price. The items listed usually cost half the wholesale price, with the discount being dependent on the physical condition of the food, the limited sell-by-date or, if it is up for sale in a larger quantity.
Whole Foods has chosen to test the service in the Rocky Mountain region, with some of the items being listed on FoodMaven’s site. Just this week, the site listed bulk packages of Whole Foods-brand vanilla tea-loaf cakes with a best-by date of Nov. 18 for $32.22, which is a decrease from its previous price of $64.44.
The owner of Sangres best Grass-Finished Beef in Colorado – Elin parker Ganschow is using FoodMaven in order to boost its sale of tenderloin to up to $15,000 – which is left after a large order for ground beef is being processed, something that she couldn’t sell fast enough otherwise.
Some of the other top selling products listed on FoodMaven’s website were 7 pounds of sopressata sausage for the price of $27.43, down from $45,37 due to being frozen and an October 17th sell-by date, a six-pack of Greek yogurt was listed for $6.39, down from $21.58 due to its best-by date of October.
While the manufacturers themselves generate their own best-by dates in order to ensure the quality of their product, the Food and Drug Administration states that they are not supposed to be perceived as a guide for safe use and that the food can be safely frozen for a longer period of time. Mr. Bultema has said that the restaurants that choose to buy from FoodMaven do so with the full understatement that the best-by dates are conservative in nature and that the items can be bulk frozen before the stated dates while still being able to serve them fresh after.
Some big food sellers are making efforts to cut waste on their own. Kroger Co., for instance, said that it set a goal to eliminate food waste in its network of supermarkets (the largest in the nation) and that goal was set to 2025. In some selected markets, Wall-Mart Stores Inc. is selling ‘imperfect’ potatoes and apples for prices that are lower than usual. The nation’s largest food seller has made an agreement with some other big retailers and manufacturers to establish use-by dates that are simpler to understand by 2020, with the goal of lessening the confusion that leads to safe food being thrown out by their customers.
The large restaurant chains have also initiated a project to cut food waste. Food Donation Connection, which is a company based in Knoxville, Tenn., is coordinating the donations of unsold food from companies like Darden Restaurants Inc., and Chipotle Mexican Grill Inc. A spokesman has said that the owner of the Olive Garden and LongHorn Steakhouse chains, Darden – has made a donation of more than 100 million pounds of food through his service since 2003.
FoodMaven and the likes have seen a profitable opportunity in helping smaller scale food producers and retailers to reduce food waste. The senior principal at the Technomic food-service consultancy, David Henkes – said that those kinds of companies could help restaurants reduce a third of their food spending. However, he said that restaurants should take precautions in the terms of the public thinking that their food could harm them in any way.
Mr. Henkes said: “People in the industry realize it’s all fresh and not out of code but there could be some negatives around it.”
Russ Ware, the owner of two Colorado Springs restaurants, stated that the food he has ordered via FoodMaven, turkey, eggs and bacon, specifically, have been 50% cheaper on average than the supplies he used to take from his previous wholesaler.
In addition, Mr. Ware said: “In our business, savings is savings, every cent counts.”
He also said that, on occasion, he has sent some products back to FoodMaven since they didn’t meet his standards. He also clarified that this happens with products bought from conventional wholesalers as well. Colorado Springs discussed in length the potential negative reaction to the purchases of surplus food before starting to use FoodMaven’s services, and came to the conclusion that diners are smart enough to understand the benefits of reducing their food waste.
Mr. Ware said: “We are not going to use it if it’s not in good shape.”