By now, the sentiment that food waste is one of our biggest environmental problems is no secret. Countless startups and companies have made pledges to combat food waste with a variety of technologies including everything from produce seconds digital marketplaces to upcycling food to fertilizer inputs.
As the food waste tech space has developed, there has been a variety of perspectives on the best way to address the issue of food going uneaten. Studies, tests, and countless research projects have strived to pinpoint where food waste starts and the best aspects along the supply chain to put a cork in the overwhelming tide of food that’s grown only to end up rotting in a landfill.
What they all seem to conclude is that food waste is a really, really complex problem.
“We need to take a step back and set the time frame for how we view the world of global food waste,” food waste fighting startup Treasure8 CEO Timothy Childs and Derk Hendriksen tells AFN. “As we see it, global food waste, in general, is an extremely large, highly-complex, multidimensional challenge set that is constantly fluid. While it can be challenging to make sense of it, we try to simplify these complex sets to tease out some useful topologies for ourselves and others to make a more actionable sense of it.”
Launched in 2012, the startup is based on Treasure Island in San Francisco and describes itself as a technology company focused on systematically reducing food waste and alleviating climate change using a specialized platform including what it describes as the world’s most powerful, proprietary dehydration technologies. Currently, it’s deploying this technology to develop completely vertically integrated solutions to tackle what it sees as the five pillars of impact: dehydrated whole foods, hemp drying and waste extractions, plant-based proteins, nutraceuticals, and bioplastics. It also recently moved its Richmond production plant closer and opened a full-scale pilot plant at its HQ on Treasure Island.
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Childs, who founded Treasure8, was recently featured in a CNBC documentary about the company’s plan to fight food waste. We caught up with Childs and Hendriksen to learn about how they view the food waste space, what their company is doing, and their hope for food waste’s future.
What is your technology and what is it trying to solve? How does it differ from other food waste companies?
Given food waste is a fairly abstract idea for most, we hope to get more folks to start thinking about waste in terms of resourcefulness; we want to inspire others in evolving their thinking away from negatively loaded terms such as “waste” into a more positively charged label of ‘resource’ and ‘recovery’, and as such, have come to refer to the work we are doing as a Resource Revolution.
We’re a technology company focusing on food with a number of technologies and processes that can have a systemic impact on food waste and climate change. Our technology platforms also allow us to eventually expand beyond advanced drying techniques associative with the massive food waste sector, into other categories such as nutraceuticals, food safety, soil recovery, water-saving, and carbon sequestration.
What does this mean? Basically talking not just about our technology, but our speed, scalability and the fact that it is a systemic solution to one of the largest challenges, and opportunities in the world. The method we use is called the T8 Re-Harvest Process, which in short is an end-to-end, tech-driven and derived approach for transforming food waste streams into multiple value streams (food, nutraceuticals, energy, carbon sequestering soil amendments fertilizers, etc).
This means that once we solve for one post-production or in-field food waste stream, we then scale that particular end-to-end solution with different global partners around the world to other markets with the same waste streams to create massive, scalable and self–sustaining impact. At the moment, we’re doing this with different types of post-production waste including juice pressings, beer, wine, tofu, and now venturing into cannabis and hemp biomass given our patent coverage in this area.
As for our technology for capturing and storing nutrition more effectively, we’ve licensed, developed and commercialized proprietary, specialized technology to help solve the $2.5T/year food waste crisis that is the 3rd largest contributor to methane greenhouse gas emissions. It’s not only our technology (both hardware and vision-based AI/ML software systems) that sets us apart but also our systemic-based thinking and approaches and developing more vertically integrated solutions, including kill steps, co-generation energy systems, and carbon sequestrating biochar production for soil health.
Our suite of patented technologies (some based upon key USDA patents we exclusively control) allow us to more effectively capture whole food nutrition (and as close to the source as possible) better than anyone else. Our reduced costs for superiorly capturing and storing nutrient-dense materials gives us and our partners the luxury of being able to produce premium quality ingredients with lower costs. From hot air drying to freezing and freeze-drying, we have a one-of-a-kind, game-changing technology, which according to Dr. Tara McHugh, Center Director of the USDA’s Western Regional Research Center, “Has the potential to revolutionize the food industry as a whole.” We also have commercialized our core technologies and now deployed in our pilot plants, are filed and patenting more IP and acquiring more as well that which provides us with a wide range of dehydration capabilities which allow us to stabilize an even wider number of different types of food waste streams
What is your product and how do you sell it?
Our main product is our suite of drying and processing solutions, which we provide as a service, through our, breakthrough DaaS Model (Drying as a Service). Our DaaS model provides a frictionless way for our partners to engage with us in drying by us providing all the equipment and operations for a per ton fee, allowing them to focus on their core business.
We’ve begun sales of some of our B2B dried ingredients and are in the process of spinning it off into its own subsidiary (to be operated by a 20-year ex-ADM veteran) and will be offering more access to our novel ingredients through direct B2B as we scale up production capacity.
We also develop and produce products for ourselves and on behalf of our customers, so that we can demonstrate the value of our solutions.
Who are your target customers?
We are largely a business to business company focussed on providing superior, drying services and ingredient sales to key players (growers, processors, ingredient suppliers, CPGs). We’re also moving quickly into the cannabis and hemp drying sector with a focus on processing the biomass faster & more effectively than anyone else.
What are some of the challenges that you’ve faced and how did you overcome them?
We have a lot of ambition and our ultimate goal is to start a total Resource Revolution to completely transform the food system, which of course, is a very high bar. One of our challenges was that we were aiming to do too much too fast. While we hold on to our purpose, we have now focused our efforts by prioritizing (1) our technology as the core of our capabilities, (2) select growth segments as the core of our business development, and (3) focus on B2B as the core of our go-to-market strategy. With this renewed focus we are now in a position to have a tighter story and deliver stronger commercial results in the short term.
In most traditional industries, go-to-market strategies tend to be pre-determined. A core value for us is thinking differently, and as such, we wanted to change this to make sure that value creation and value capture can be more evenly distributed across the value chain, including AG growers. We developed the DaaS model (Drying as a Service) so that medium and large customers can use our superior service ‘by the ton”, while the capital investment and operations are covered by Treasure8 and its partners.
What’s been the most surprising aspect of your startup journey so far?
The fact that for so long we’ve been establishing these cornerstone technologies for ideas and movements whose time has finally arrived. Which means we are ready to help our customers and partners succeed. Our vision to help turn food-waste ($2.5T/year) into high quality, superior tasting, shelf-stable nutrition for all, is something we have been working on for about 6 years. Now, with leaders of large (CPG) organizations, we can deliver a suite of regenerative solutions that helps them see and start to implement a different, more sustainable approach to agricultural processing (e.g. sourcing, drying, blanching, kill-stepping, fertilizing, etc). This ‘idea whose time has come’ gives us momentum in a number of high growth segments in the food industry at large.
Do you have any mentors that have assisted you along the way?
Renowned food innovator and food waste pioneer, Edward Hirschberg, with 55 years of experience in food processing, and 95 years young, became Timothy’s food waste mentor years ago. Ed’s deep library of up-cycled product concepts and his experience on technical issues relating to food processing was instrumental in his thinking of how to start tackling the larger system. Ed’s full circle, “waste not” thinking and upcycled innovations inspired us to think big. We adopted one of his inventions in one of our technologies. He really helped accelerate our thinking of food waste solutions—which began starting from Timothy’s work in disrupting the cocoa supply chain when running TCHO Chocolate. Also, Regenerative Business leader and educator Carol Sanford has been instrumental in helping us find the “essence” of our company’s purpose and have been key in helping us extend our company’s capacity and thinking.
Are there any other startups that you looked to for guidance or as a model when you were getting started/as you scale up? The food waste tech space seems like it has become quite crowded.
We have looked at the tech industry in general and the software industry in specific. Yes, the food waste tech space seems crowded, but if you look at the enormity of the global opportunity, it really isn’t. But most ‘solutions’ are simply products derived from food waste. That’s not us. We are about systemic solutions grounded in (1) transformational technology (SAUNA+++), and (2) software-like business models (DaaS /drying as a service). We have also looked at partnership models (like Apple) where we develop an ecosystem of partnerships that are in line with our mission and are mutually beneficial. Lastly, we have looked at the PE industry as a source of inspiration for our corporate structuring in which we have created segment-specific verticals (eg, whole food ingredients, alt proteins, Nutraceuticals, even hemp/cannabis), supported by the shared services of the umbrella organization and its core technologies (Treasure8).
While the space seems crowded, we don’t see anyone else taking such an ambitious, systemic, globally scalable approach of working with many different streams to create high, medium and low value through a vertically integrated approach. We’ve looked more at large scale recovery plays like Recology here in the Bay Area, companies who have been working valorization of materials in different sectors, AI companies like Brightseed and highly innovative global food processing equipment manufacturers. As for models, we patterned our unique corporate (early investment opportunity platform) model around more mature conglomerate companies. We joke that Google validated our conglomerate model which we created a few years before Alphabet was announced.
How have your investors added value beyond capital? What do you look for in an investor?
Most if not all of our key investors play a significant advisory role in our business, we are partners along for the ride. We cannot do this alone, we do not have all the answers. From their functional experience to their networks to their personal capabilities, everything is leveraged to make our business better. It is not uncommon for an investor to come over to our office on Treasure Island in San Francisco and sit down to help think through the business. With most of our larger investors, we have scheduled update and advisory meetings to establish a culture of collaboration, progress, and accountability. They have ongoing visibility into our company’s dashboards including our objectives and key results and deal-flow pipelines.
We look for visionary, impatient investors with patient capital. Our solutions are transformational, they need scale, and returns will build over time. In general, VC as an asset class is usually misaligned with the interests of a founder-led, long term planning organization. In general, we prefer working with large family offices, high net worth individuals and strategics who understand and appreciate long term value creation. Given our global leanings, we open to partnerships with Pension and Sovereign Wealth Funds asset classes as well.
So as to keep the more near-term-thinking and impatient capital (yet enlightened) in our ecosystem appeased, The Treasure8 mothership’s unique corporate design (co-designed by the current chief legal officer of Softbank) serves as an early-investment-opportunity-platform which allows our investors (and company team members) to also have access to early investment opportunities (in addition to their pro-rata share thereof) into our spun out JVs and Subsidiaries, which are set up for more near M&A activity.
Have you participated in incubators or accelerators? If so was it beneficial?
While there seem to be so many of these around these days, by design, we serve as our own incubator to our own subsidiaries and as an accelerator to the other companies we curate to be part of our unique ecosystem of regenerative businesses within the historic Hangar 2 and Hangar 3 here on Treasure Island.
Any advice for other startups out there?
Our “spaceship Earth” is in dire need of returning to being used in regenerative ways, instead of often being used destructively. Making sure you take people and the planet into account as much as your P&L and hold yourself accountable to the value you create for all three is a great start. This is a time to think and plan for big solutions, not incremental change ideas. Should your solutions somehow be relatable to ours, we’d love to talk and see how we can partner for the greater good.