EXCLUSIVE: Why Kroger is pulling out all the stops to reduce food waste

Food waste continues to be a tricky challenge for supermarkets. Although there are a number of innovations and policy changes chipping away at the mountain of food that gets tossed into landfills, the titanic problem remains.

“There is this fundamental absurdity that 40% of food produced in the US never gets eaten and we have over 50 million Americans struggling with hunger,” Sunny Reelhorn Parr, executive director at the Kroger Co Zero Hunger Zero Waste Foundation told AFN.

The Foundation — set up by retail giant Kroger — has been investing in startups that can help solve this waste problem. This year, it has been looking for businesses and technologies that manufacture, process, or distribute ‘upcycled’ consumer food products.

The main driver behind selecting this category is the staggering disparity between the amount of food that goes uneaten in the US and the number of people who experience hunger. Turning materials that would otherwise be wasted back into consumer goods bridges this gap while creating new opportunities.

“We are here to disrupt the current linear supply chain that’s sending over 24 million tons of edible food to landfills every year before a final product even reaches a consumer’s home. We’re looking at imperfect and surplus produce lines, manufacturing byproduct utilization, meal kits, and so many more solutions that we know are just taking flight,” Reelhorn Parr said.

For its second year, the Foundation decided to partner with Village Capital (VilCap), a seed-stage, impact-driven VC fund and accelerator group that has experience backing agrifoodtech companies.

When the Foundation started thinking about its second year of investing in food waste startups, instead of doing another open call for applications, it engaged in some research to see where assistance was needed most. It also put out a request for partnerships.

“What I am most excited about is the investment readiness program. VilCap wrote the book on that,” Reelhorn Parr said.

“This time we are deploying $2.5 million and doing it with the belief that VilCap’s investment readiness program over the course of the next six months is absolutely the right space to help the startup seed funding stage gain traction and be successful.”

According to VilCap’s sustainability practice manager Kelly Bryan, the firm has noticed “an uptake of and desire for” upcycled foods – not only from the consumer perspective, but also from retailers.

“These solutions have the largest potential for impact, particularly when it comes to waste diversion and water savings, according to ReFED’s food waste monitor research. Using byproducts to create novel foods can sustainably reduce food insecurity and nutritional deficits,” she told AFN.

One challenge is integration within the ecosystem, she added. An integrator may have a great idea for an upcycled product, but getting connected to the right partners to conduct a pilot, or finding seed-stage capital, can be difficult.

Greenwashing is another issue that may hamstring some startups’ best efforts to create a new category of food products. 

“It is a concern, and a very important part of our evaluation process is to better understand how each of these solutions is really creating real change and not just saying that they are,” Bryan explained.

“What I really respect about this collaboration [with the Kroger Zero Hunger Zero Waste Foundation] is that [we’re] looking for solutions that can prove to us that they’re actually making some systems-level changes, not just changing consumer behaviors or telling the consumer they’re doing something that they’re not.”