Data snapshot: Investment in food waste tech down in the US, but sector still ‘well positioned to outperform overall trends’

Data Snapshot is an on a regular basis AgFunderNews attribute analyzing agrifoodtech market funding information supplied by our dad or mum agency, AgFunder.

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Funding in meals raze options throughout the US dropped 33% from 2022 to 2023, in keeping with AgFunder’s most well-liked Global AgriFoodTech Funding represent, which contains information and evaluation from meals raze nonprofit ReFED.

The decline is in keeping with most different agrifoodtech courses for 2023, a year that integrated excessive corrections to agency valuations, aggravating fundraising conditions and a mass exodus of the sector by generalist retailers.

Then all as quickly as extra, funding throughout the US meals raze sector stays increased than it modified into as quickly as in 2019 and 2020, suggesting continued momentum.

No subject the downturn, meals raze tech is “properly positioned to outperform total developments,” ReFED government director Dana Gunders tells AgFunderNews.

“Due to the elevated [food] prices, there’s extra motivation for corporations to be adopting a few of the [food waste] utilized sciences.”

Clients, too, are altering some behaviors spherical meals raze “ensuing from of the rigidity that extreme meals prices are putting on households,” although Gunders notes that family meals raze is nonetheless a methods extra delicate to hint than raze elsewhere throughout the value chain.

Meals retail has constantly considered doubtlessly probably the most progress, she offers. For example, the Pacific Hover Meals Smash Dedication (PCFWC), a public-non-public partnership between meals corporations and West Hover jurisdictions to attenuate meals raze throughout the assign, reported a 25% reduction in grocery retail meals raze from 2019 to 2022.

“We’ve by no method had that earlier than,” says Gunders, including that this info is possibly probably the most attention-grabbing occasion of progress the US has to exhibit merely now by methodology of meals raze.

Meals raze options: class enhance over time

ReFED tracked funding and deal numbers for 4 various meals raze options between 2019 and 2023.

These options drop into three elementary courses, as laid out by the ReFED Insights Engine, a whole hub of meals raze information and information for the US.

Recycling: Meals recycling is in essence about turning surplus meals, scraps and different non-fit to be eaten meals sides into treasured presents for business. Composting, whether or not at dwelling or in team-scale settings, is a foremost resolution on this class together with anaerobic digestion and turning would-be raze into livestock feed, as many insect-primarily based fully methods are doing.

Rescue: Meals rescue includes diverting wholesome meals equivalent to win from the landfill and donating it to meals discount businesses. In foodservice and a few grocery environments, meals rescue additionally comprises selling surplus objects or these nearing expiration to patrons at fastidiously discounted prices.

Prevention: Prevention is interested by earlier phases of the agrifood provide chain, from optimizing harvests throughout the area to enhancing distribution and product administration and reshaping consumer environments esteem meals retail shops. Specific options, or “motion areas” include “lively and mental” packaging, standardized date labels, raze-tracking strategies, extra environment friendly transit, and consumer training.

Zoom in on meals raze recycling

Over the closing half-decade, necessary funding has lengthy gone into the Recycling class, which is in whole considered as scalable and in an area to sort out immense volumes of raze, in keeping with AgFunder’s signify.

Data serene from the ReFED Insights Engine reveals that, in 2023, the Recycling class raised $681 million throughout 44 offers.

Gunders says this class comprises, “your complete lot from turning issues into animal feed [via] insect farming or different processing methods to composting or anaerobic digestion and even turning meals scraps into non-food merchandise esteem textiles or bioplastics.”

In line with worldwide agrifoodtech funding developments, the quantity of funding to recycling options is down considerably (from $1 billion in 2022) however best marginally lower by methodology of deal rely (46 in 2022).

Bucking worldwide developments, funding to meals recycling options in 2023 modified into as quickly as over 40% increased than in 2021, a banner yr for heaps of agrifoodtech funding (although deal rely dropped 36%). That is principally attributable to a few of mega offers.

Sevana Bioenergy, which turns agricultural byproducts into biogas via anaerobic digestion, modified into as quickly as purchased by Ontario Lecturers Pension Belief via a $250 million leveraged buyout. France’s Ynsect raised $175 million from endeavor capitalists for its raze-to-protein insect farming mannequin.

Recycling options took 4 of the tip 5 funding rounds for meals raze in 2023:

Later-stage offers on the upward thrust

Even though meals raze as a sector nonetheless is throughout the early phases of sample, ReFED says we’re actually seeing options corporations enter the later stage and starting to scale with the help of corporates.

Gunders says there’s “no question” that here is a sign of maturity. “There’s an on a regular basis drumbeat now of not decrease than double-digit, million-greenback investments in corporations [and] we possess a few that possess gotten purchased.”

Insect farming, the place bugs flip raze and agricultural byproduct into excessive-price components (largely for animal feed), illustrates this maturity properly. Ynsect, Protix, and Grubbly Farms all raised later-stage rounds in 2023 (be taught our current deep dive into this phase HERE).