How We’re Helping Solve the Global Food Waste Crisis
There’s a paradoxical problem with America’s food system: 1 in 10 Americans experience food insecurity, yet 30–40% of our food is wasted. This waste not only stresses our economy and costs the US a staggering $200 billion a year, but it also seriously taxes our planet, as wasted food means squandered land and water assets. This isn’t even including the wasted resources required for needless transportation and packaging.
Understanding the retail food waste problem
Food waste occurs at every step of the supply chain, from raw harvesting and production to distribution. One of the most glaring issues we uncovered when digging into this problem was the role grocery stores play in exacerbating this waste. We discovered that retailers generate 16 billion pounds of food waste each year. We pay for the piles of apples and fresh avocados we see when we walk into a grocery store — and we also pay for the fact that, on average, one in three of those items is thrown away in the garbage. It’s even worse in certain aisles, as 35% of bread goes unsold and 40% of deli sandwiches get tossed in the trash. Why does this problem persist? It is in part because grocery stores rely on guesswork to stock their shelves.
Where sustainability meets innovation: Meet Shelf Engine
At PLUS, sustainability is one of our core investment themes. We seek to partner with startups that leverage technology to solve some of the toughest problems for the benefit of people and the planet alike. Upon meeting Stefan Kalb, founder and CEO of Shelf Engine, we learned that this has been the playbook Shelf Engine has been running for some of the biggest grocery retailers and foodservice providers in the country including Kroger, Whole Foods, Compass Group and many others.
By swapping antiquated, semi-manual ordering methods riddled with guesswork with intelligent demand forecasting powered by AI, Shelf Engine helps its grocery retail customers order what they’ll most likely sell. This dramatically decreases a grocer’s food waste and minimizes the out-of-stocks that erode sales and irritate shoppers. This approach has proven very good for business — Shelf Engine has achieved a SKU-level gross margin improvement of up to 400% for thousands of stores across the nation. This is revolutionary in an industry where margins are notoriously razor-thin. Every point of margin improvement achieved as a result of more efficient ordering directly impacts both these grocery retailers and the health of our planet simultaneously.
We are thrilled to be backing Shelf Engine as investors alongside partners from our artist & athlete collective — Ellen DeGeneres, Portia de Rossi, Shaun White and Shawn Mendes — who share Shelf Engine’s passion for transforming our broken food system. Together, we hope to amplify the company’s mission and achieve what Shelf Engine calls a “triple win” for retailers and suppliers, consumers and the environment.
