Following on from Tuesday's newsletter, the article in the url below profiles the CEO of Apeel – James Rogers, who was a Ph.D. student in materials science when he founded his company dedicated to the reduction of food waste in food supply chains around the world:
"Mr. Rogers … company, Apeel, applies an edible, plant-based coating to fruits and vegetables that extends their shelf life without refrigeration. Apeel-treated avocados, limes, apples and cucumbers are already in some of the largest grocery chains in the U.S. and Europe. The startup now plans to expand into markets in Asia, Africa and Latin America, thanks to a $30 million investment from the International Finance Corp., the World Bank's private-sector arm. The company Mr. Rogers launched in 2012 as a Ph.D. student is now valued at more than $1 billion."
It is clear that there will be demand for his services for many years to come, since there is currently no shortage of food waste:
"'Perishability governs every element of the food system,' Mr. Rogers says. Fruits and vegetables start to lose their value once they are picked, and producers, suppliers, retailers and consumers all race to get those berries and leaves into someone's mouth before they spoil. This urgency forces trade-offs. Most retailers arrange produce in unrefrigerated displays, which sells food faster but ensures that everything rots sooner. … Despite this haste, there is plenty of waste. More than a third of the food produced today is never eaten, at a global cost of $2.6 trillion a year, according to the U.N.'s Food and Agriculture Organization."
I found Rogers' description of how he problematized the global food supply chain fascinating. Specifically, he talks in terms of the "time value of food" in an attempt to answer the question, "Why do so many people go hungry when there is so much food in the world?":
"The answer, he discovered, is that food is an intermittent asset ('Either it's in season and you have more than you know what to do with, or it's out of season and there's not enough'), and most farmers lack the time and wherewithal to bring their harvest to market. If produce took longer to spoil, poor farmers could sell their wares to distant customers. But how, he wondered, could he 'create more time for food?'"
More specifically:
"He began to study the differences between foods that 'had time,' such as lemons and oranges, and those that didn't, like strawberries and cucumbers. He discovered that the exteriors of both sorts of fruit are composed of the same molecules, just arranged differently. He hoped to use the lessons of lemon peels to sustain strawberries, but he wasn't sure how. To move forward, he needed money."
This is where it gets a little technical:
"All fruits and vegetables spoil by the same process—water goes out, oxygen comes in—but creating an invisible barrier that locks in moisture requires a different formula for each one. Using the lipids and glycerolipids of existing peels, seeds and pulp (i.e., things we already eat), Apeel has created a safe, flavorless, FDA-approved solution for dozens of products, which it applies while wet to the surface of harvested produce on specially outfitted conveyor belts just before everything is packaged for export. This invisible 'peel' can double or triple the lifespan of a product, the firm says."
The next task was to convince producers and retailers that it is in their interests to increase the shelf lives of their food products:
"But adding shelf life to produce is one thing; convincing suppliers and retailers that this time has value is another. 'What we found was there wasn't a market for longer-lasting produce,' Mr. Rogers says with a chuckle. Most businesses told him that perishability kept their customer coming back for more."
Then, he had to wrap his head around the complexity of the global supply chain for food:
"He has discovered, for example, that every fruit and vegetable has its own idiosyncratic supply chain, and Apeel works to pinpoint where time has the most value. He has also learned that delivering avocados to Europeans throughout the year means working with lots of different countries (Chile, Israel, Morocco, South Africa, etc.), each of which has its own unique supply chain, regulatory hurdles and distinct avocado."
The key to his business model (and Apeel is now valued at more than $1 billion) is to differentiate on quality and efficiency, and purpose:
"Because these deals save retailers money, Apeel products aren't pricier than more perishable alternatives, Mr. Rogers says: 'We're saying when you purchase this item for the same or lower cost, you are voting for a food system that will look after more people and our planet.'"
Take care
David
David Chandler
© Sage Publications, 2020
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James Rogers
By Emily Bobrow
January 9-10, 2021
The Wall Street Journal
Late Edition – Final
C6
