Apeel Sciences raises $250m to tackle food waste, with help from Oprah, Katy Perry: ‘What we’re selling is time’
The round - supported by Viking Global Investors, Upfront Ventures, Tao Capital Partners, Rock Creek Group and Santa Barbara locals Oprah Winfrey and Katy Perry – will help Apeel expand its 300+ team, build its international footprint, and brings the firm’s cumulative funding to $360m, founder and CEO James Rogers told FoodNavigator-USA.
“We can reduce waste and unlock value across the food system,” said Rogers, who founded the business in 2012 with a grant from the Bill and Melinda Gates Foundation, and secured a letter of no objection from the FDA to his GRAS determination for Apeel in 2016.
With operations in the US, Spain, the Netherlands, Mexico, and Peru, Apeel is looking to open offices in South Africa and is now producing commercial quantities of its invisible skin for limes, avocados, organic apples, mandarins, and oranges, with multiple other applications to follow spanning everything from cucumbers and asparagus to pineapples, mangoes, lemons and tomatoes.
Work on very short shelf-life products such as strawberries and raspberries, as well as cut-fruit, is also in progress, he said.
Colorless, odorless, tasteless: ‘We use food to preserve food’
Supplied as a powder that can be mixed with water and sprayed onto produce or used as a dip, Apeel is made from plant extracts (primarily lipids from agricultural by-products such as tomato skins and seeds) which self-assemble into structures - an edible ‘skin’ of consistent thickness - that allow Apeel to independently modulate the rate of oxygen and carbon dioxide transmission to create an optimized microclimate.
The lipid content does not, however, make Apeel waxy or greasy. Indeed, the primary attraction to retailers is that Apeel is both ‘all-natural’ and invisible: it’s colorless, odorless, tasteless and undetectable on produce (no sticky or waxy residue), said Rogers. “You can’t see it, smell it, taste it, or feel it. And it’s just plants. We use food to preserve food.”
Kroger, Edeka, Salling Group
US retail partners include Kroger, Harps Food Stores and Martin’s, (see more partners here) while overseas retailers include Edeka in Germany and Salling Group in Denmark, said Rogers, who said US retailers using Apeel typically see a 50% reduction in shrink, 5-10% growth in dollar sales, and an incremental 10% growth in dollar sales when they use instore marketing campaigns educating shoppers about Apeel’s benefits.
In the case of long English cucumbers, applying Apeel means firms can ditch the plastic shrink-wrap; while for asparagus, the extra shelf-life means it can travel by sea instead of air, without the use of controlled atmosphere, reducing costs. Apeel slows the rate of water loss by up to 50%.
Avocados treated with Apeel have up to 50% longer shelf life, slashing retailers’ shrink and giving consumers more time to enjoy them at peak ripeness; while for limes, Apeel can triple shelf life, giving growers and distributors access to new markets, said Rogers.
“I hate to see food wasted when there are so many people in the world who are going without. Apeel can extend the shelf-life of fresh produce, which is critical to our food supply and our planet too.” Oprah Winfrey
Longer shelf-life could enable market access for new fruit/veg varieties
But perhaps one of Apeel’s most exciting benefits is the ability to introduce consumers to new varieties of fruits and vegetables that are not typically found in major retailers due to their short shelf life, said Rogers.
“What we’re really selling is time. We can deliver between 1.5x to 3x [extensions in shelf life] and we’re continuing to improve formulations so we can augment or in some cases even replace refrigerated supply chains, but we’re also about increasing participation in the food system, not just for people in food deserts, but also in terms of the types of produce that go into the supply chain.
“When you go to the grocery store, you’ll find dozens of different kinds of apples, but typically only one kind of avocado or banana.
"Caviar limes [a micro-citrus variety grown in southern California] are a great example. They have a 5-7-day shelf-life without Apeel and 25-day shelf life with Apeel, which means that they can now participate in the retail supply chain, so I see a future where hundreds more varieties of fruits and vegetables are available regionally.”
The disruption caused by COVID-19 on fresh produce supply chains has further highlighted the benefits of a product that can extend the shelf-life of perishable fruits and vegetables, many of which ended up rotting as there was not sufficient time to divert products from foodservice into retail supply chains, added Rogers.
For produce that is already sold in stores, having a longer shelf life is a key benefit when consumers are making fewer larger, trips, he said.