There are a number of companies focusing on ways to recapture produce seconds—the blemished, misshapen, and unsightly fruits and vegetables that don’t make it to supermarket shelves based solely on these aesthetic flaws.
Souper Seconds is helping Bay Area chefs find produce seconds, which they plan to chop, dice, and cook to perfection, at a discount. And Imperfect Produce sources produce seconds from farms, packages them for consumers, and delivers them at a reduced price straight to your doorstep.
As we’ve recently reported, food waste is a billion-dollar market and making sure this ugly food is eaten is just one way to address the $200 billion-a-year food waste problem. But so far, investors have been hesitant to back food waste-focused technologies, with only $93 million in investment reported in 2015—less than 2% of total agtech investment that year, according to AgFunder.
Fortunately, the low investment dollars don’t seem to be stifling innovation in food waste.
Now, a Nova Scotia-based company is finding a new use for those perfectly edible and equally nutritious produce seconds: feeding fido.
Dane Creek Capital, an investment firm focused on the pet market, recently launched Dockside Pet Products, a new pet food company targeting North America. Unlike some pet food brands, however, the company is taking a unique approach.
Working directly with farmers and fisheries, Dockside will use perfectly fresh seafood, vegetables, and fruits that don’t make it to the retail market and are otherwise wasted for cosmetic or other reasons that don’t negatively impact their nutritional value.
“To the best of our knowledge, this is the first business in the pet food, treats, and meal mixer space that is using 100% rescued fresh food and/or sustainable products,” Mark Warren, CEO and chairman of Dane Creek Capital told AgFunderNews. “It’s not only about food waste, but it’s also about water waste, too. Sixty thousand gallons of water per acre is used in growing cauliflower, for example.”
Considering that 40% of food produced in Canada and the United States is wasted each year, according to the National Resource Defense Council, using it to create locally sourced and nutritionally-rich pet food products makes sense. Sourcing produce and seafood seconds allows the company to keep input costs low. Its location in Nova Scotia’s fertile Annapolis Valley also gives it plenty of options for finding a consistent supply of produce and seafood seconds.
In addition to recapturing this would-be food waste, the company is also incorporating a relatively new type of protein; insects.
Dane Creek Capital recently acquired a 48 percent interest in Midgard Insect Farm, a Halifax producer of insect-based powder for the pet food industry. The farm was founded by Joy Hillier, a registered veterinary technician who became interested in insects as food for pets through her own food security and sustainability research.
As part of the new partnership with Dockside, the duo will create a 1,500 square foot research facility where Midgard can work on improving insect-based protein for pets. Perennia, a non-profit corporation in Bible Hill, Nova Scotia, which focuses on assisting the province’s farmers, fishers, and food processors, will also take part in the venture.
Dockside’s premium products are mostly developed for dogs at this point, with a few treat options for cats and a long-term plan to provide more for felines. Crickets can be gut-loaded 48 hours before harvesting, a process which involves feeding the crickets with something specific to modify their ultimate flavor profile. If you feed crickets nothing but lobster meal during that two-day period, they will end up taking on a lobster-like flavor, says Warren. This may help launch new products for cats, which are pure carnivores.
For now, the brand is targeting Canada with plans to expand into the US. They’re also considering India due to its large population—1.5 billion—and a growing middle class that’s increasingly owning dogs as pets, says Warren. None of Dockside’s products include beef, which is a big deal to many Indians who eschew bovine-based food for cultural and religious reasons.
With some consumers are having a hard time contemplating noshing down pulverized bugs themselves, there may be a similar gut-wrenching reaction to feeding crickets to our beloved pets. Warren doesn’t see this as a major issue.
“I think a lot of it will come down to marketing and nomenclature. We don’t call it food waste,” explains Warren. “Secondly, we will be hitting fairly heavily on social media. It gives us a chance to explain that some of these produce and seafood seconds are actually nutritionally superior.”
Cauliflower provides a good example. If a head of cauliflower has too much anthocyanin pigment, it can bear a purplish hue which supermarkets and consumers find unsightly. This compound has been associated with multiple health benefits, however, including preventing eye disorders and improving brain function.
“The more anthocyanin it has, the better it actually is for the pet nutritionally,” says Warren. “That hue actually disqualifies it from making it onto store shelves because we are conditioned to buy white cauliflower. Social media will allow us to point out the silliness of the purchasing habits of consumers and how we are manipulated into doing stupid things when we buy food.”
This is relatively easy compared to marketing in the past, he notes, with social media’s ability to instantly send a message on a more widespread basis and a much lower price.
In addition to a sound social media marketing strategy, forming strategic partnerships is an important goal for Dockside. The new venture with Midgard and Perennia is just a sampling of the partnerships to come, says Warren.
“You’ll see us doing deals with very big names,” forecasts Warren. “The plan is to make Nova Scotia the center of research regarding how to use rescued fresh food and sustainable products in the pet industry. We intend to bring in significant partners to assist in that.”
In a recent statement, Dane Creek Capital announced that it was looking to partner with new pet industry companies seeking fresh sources of funding and management support. It anticipates closing up to three investments by the end of 2016.
As for scaling Dockside, Warren is optimistic. They’re experimenting with apples, carrots, cranberries, and Pollock, a meaty white fish, for future product lines. Mealworms are also on their radar, and the company is already experimenting with using mealworm oil as a binding agent.
There are a few challenges, including navigating the rapidly shifting food safety regulations in the US. The FDA has made substantial strides implementing the new Food Safety Modernization Act, which applies to both human food and pet food.
Not every state recognizes insects as a protein, either.
“Our plan and expectation is that more states will start recognizing cricket protein for pet food and meal mix,” he says. “It’s just a matter of time.”
Warren seems like the right person to man Dockside’s helm. He is the founder and former president and CEO of Pethealth, which he formed in 1998. Pethealth became the world’s largest provider of companion animal microchip technology, and a leading provider of pet insurance, cloud-based software, and online pet specialty retail to pet owners, veterinarians and animal welfare organizations throughout North America and the UK.
Combined with the company’s equally experienced CFO, Gary Tennison, the duo has over 30 years of experience in the pet food industry.