Online market FoodMaven creates new revenue for brands, companies facing food waste risks
“The US Department of Agriculture estimates that 40% of everything US farmers produce is thrown away. The thought is it is somewhere in the $200-$300 billion a year of economic loss and when 68% of farmers … are on the verge of bankruptcy, that is a big problem,” Patrick Bultema, CEO of FoodMaven, told FoodNavigator-USA.
“Everybody is a loser in this system,” but they don’t have to be thanks to the efforts of FoodMaven, he added.
Connecting buyers with overlooked options
He explained, “FoodMaven is providing flexibility and agility to the food system by capturing food that is otherwise getting lost, and we are applying big data, Internet techniques as well as local logistics to create a complete solution for this $300 billion of lost food in the system.”
Specifically, he said, FoodMaven captures food from three main places where it otherwise would “get lost.” These include excess food that is overproduced in order to offer buyers anything they want at any time. It also captures so-called “imperfect” food that does not meet the high beauty standards most retailers have for products they place on shelves. Finally, it creates a supply chain for local food from small farmers that otherwise do not have sufficient connections with buyers.
This food is then sold online to restaurants and institutions, such as hospitals, at a steep discount.
“Let me give you an example of one of our chicken suppliers. They are a retail premium product [that sells as] always fresh, never frozen. But, you know, the unforgivable sin is to say I can’t fill your order. So, they oversupply to make sure they have enough, but for that extra they have to take to the freezer, and now they are out of brand spec. So, we take that product, make a market for it, sell it to restaurants and institutional kitchens that are thrilled to have it,” Bultema said.
He added that while “in many cases we are working more strategically with large manufacturers to come up with more strategic solutions” for products they can’t sell, FoodMaven also works directly with local growers who are faced with potentially having to throw away crops because they can’t find a buyer before it goes bad.
Ultimately, this creates a win-win situations where buyers receive a huge discount and sellers have a new revenue source, Bultema added.
In the rare cases when FoodMaven can’t find a buyer, it will donate the food to hunger relief or, if it is no longer fit for human consumption, it directs the food to animal agriculture or pet food companies, he said.
Rapid growth on the horizon
While FoodMaven has focused its efforts so far in its home state of Colorado, Bultema says it is now ready to expand to other major metro service areas in the US and bring on 200 employees.
He explained this is possible thanks in part to a successful $8.6 million series A financing round that closed in January and was led by members of the Walton family. In addition, last November, former Whole Foods co-CEO Walter Robb joined FoodMaven’s board and provided a sizeable investment, in addition to strategic guidance.
