Rethink Food Waste through Economics and Data (ReFED), a nonprofit committed to reducing the $218 billion of food waste in the United States, released its “2018 U.S. Food Waste Investment Report.” The report tracks key trends in the food waste investment space, identifying $125 million in venture capital funding in 2018. The report also includes a Special Report on Foundation Funding section revealing that foundation food waste funding reached $134 million in 2016, increasing 70 percent over five years.
ReFED’s 2016 report, “The Roadmap to Reduce U.S. Food Waste by 20 Percent,” estimates that $18 billion in funding is needed to reduce U.S. food waste by 20 percent over the next 10 years and would yield $100 billion in societal economic value. The 2018 report draws on ReFED’s in-depth fieldwork with partners and highlights specific examples of philanthropic, public and private investment over the past two years.
“As food waste has become a global priority, we’re excited to see rapid acceleration in the number of new products and services addressing food system efficiency,” said Alexandria Coari, capital and innovation director for ReFED, in a statement. “These innovators are turning food waste into jobs, hunger relief and critical environmental benefits.”
“Food waste is an $18 billion investment opportunity,” added Chris Cochran, executive director for ReFED. “ReFED is working alongside businesses, nonprofits, government leaders and investors to provide tools and insights to help them put the most impactful food waste solutions into action.”
Key 2018 report insights include:
- Direct and indirect food waste funding from foundations reached $134 million year-to-date in the third quarter of 2016, as funders like The Rockefeller Foundation and The Walmart Foundation continue to support solutions. Philanthropic funding, especially from foundations, continues to play a critical role in providing early-stage risk capital that helps unlock additional funding and support from private and public funders.
- More than $125 million of venture capital and private equity funding in the first 10 months of 2018 has been invested in food waste startups, driven by venture capital funders, such as Andreessen Horowitz, S2G Ventures, Cultivian Sandbox Ventures and DBL Partners. Continued interest in agtech and foodtech innovations from private investors could lead to the crowning of food waste’s first unicorn company ($1 billion valuation) in the next few years.
- Apeel Sciences announced $70 million in new financing led by Viking Global Investors, with Andreessen Horowitz, Upfront Ventures, S2G Ventures and others. Walter Robb, former co-CEO of Whole Foods Market, will join Apeel Sciences’ Board of Directors and advise the company as it scales to meet demand in the U.S. and internationally.
- Imperfect Produce just received a major investment from NBA all-star Kevin Durant.
- Food waste is a burgeoning innovation sector. ReFED's Innovator Database tracks approximately 500 innovators, half of which were founded since 2012.
ReFED estimates that $290 million of the $1.8 billion annual total investment needed to reduce U.S. food waste by 20 percent should come in the form of philanthropic funding from private, public and corporate foundations, family offices and impact investments. The 2018 report includes an in-depth Special Report on Foundation Funding that will help inform funding decisions to fill important gaps and maximize impact for 2019 and beyond. The report provides general insights, lists top funders and recipients and shares funding trends across the categories of prevention, recovery and recycling.
Key Special Report on Foundation Funding insights include:
- Total food waste foundation funding reached up to $134 million from January 2016 to September 2016.
- $20 million of that funding was direct funding, which is explicitly used for food waste initiatives or general funding to recipients whose missions are intrinsically tied to fighting food waste. This came in the form of 355 grants and 261 unique funders, with an average grant size of $56,000.
- $114 million of that funding was indirect funding, or a portion of general funding given to food banks and similar social enterprises, not explicitly for food waste initiatives but for whom between 25 to 72 percent of food distributed to beneficiaries is recovered food. This came in the form of 4,351 grants and 2,557 unique funders, with an average grant size of $37,000.
- Total food waste foundation funding for the recovery category reached $124 million year-to-date for the third quarter of 2016 ($9.3 million direct and $114.4 million indirect), significantly outpacing funding of prevention ($4.9 million), recycling ($1.0 million) and general ($4.6 million) categories.