Apeel Secures Funding to Combat Food Waste in Emerging Markets

Santa Barbara, California-based Apeel Sciences is initiating the first significant field trials of its groundbreaking food preservation technology, extending its innovative food treatment and supply chain solutions to distribution centers in specific regions across Asia, Africa, and Latin America.

According to Apeel’s chief executive, James Rogers, the primary objective is to address food insecurity experienced by farmers, a demographic particularly vulnerable to issues of inadequate nutrition.

Rogers stated, “The majority of the world’s fruits and vegetables are cultivated by small-scale farmers, and a substantial two-thirds of those facing food insecurity are also farmers.”

Rogers explained that farmers are disproportionately at risk due to their difficulty in maximizing the economic return from their harvests, a challenge stemming from the potential for crops to spoil.

By deploying its preservation technologies designed to minimize spoilage and connecting them with potential purchasers – existing Apeel customers in locations such as the U.S., Denmark, Germany, and Switzerland – Rogers believes the company can substantially increase the income received by farmers.

“This program, in collaboration with the IFC, focuses on developing supply chains,” he said. “The benefit isn’t solely the extended shelf life of the produce; it’s also the access to markets for that longer-lasting produce.”

The initial rollout will target markets in Mexico, Costa Rica, Peru, South Africa, Kenya, Uganda, and Vietnam, where Apeel’s technology will be applied to avocados, pineapples, asparagus, and citrus fruits including lemons, limes, and oranges.

This represents a key milestone in Apeel’s efforts over the past several years to encourage global retailers to adopt its waste-reduction approach.

The company has consistently prioritized smallholder farmers in its core mission – a commitment established from its inception through partnerships with the Bill & Melinda Gates Foundation and the Department for International Development. The original intent was to extend the freshness of fruits and vegetables grown by farmers lacking access to modern refrigerated supply chains. However, the company first needed to refine its technology and establish a robust retail network.

To support this endeavor, Apeel has secured over $360 million in funding, including a $250 million investment round finalized earlier this year.

Rogers envisions the success of these plans as the company connects demand from international markets with local growers through regional exporters.

Without access to refrigerated transport, a significant portion of small farmers’ production is limited to local markets where supply often surpasses demand. The perishable nature of crops restricts their ability to reach export markets, contributing to poverty and increasing food loss and waste among those who depend on farming for their livelihoods, according to Apeel.

“By providing additional time, we can integrate these small producers into the global food system and enable them to realize the economic value inherent in that natural resource,” Rogers said.

The introduction of new demand from international markets, achievable through the application of Apeel’s technology, has the potential to create a positive feedback loop, ideally leading to higher crop prices and increased earnings for farmers. This is the core vision Rogers holds for the latest implementations of Apeel’s technology at regional distribution centers.

Rogers dismisses the possibility that intermediaries distributing the produce to international buyers will capture the majority of the benefits from Apeel’s technology.

“The focus is on incorporating these small producers more directly into the exporter’s supply chain. With growing familiarity with the technology, it can be used to foster cooperative value and leverage those cooperatives to unlock benefits for the smallest producers,” he said. “As demand for produce grows in these markets, the supply must come from somewhere. Exporters increase their value by expanding their volume. They aim to increase the volume suitable for export to meet the growing demand. The challenge then shifts from demand to supply, requiring incentives to encourage increased production.”

Apeel has raised an additional $30 million in funding to finance this international expansion, with investments from the International Finance Corp., Temasek, and Astanor Ventures.

“Groundbreaking technologies have the power to reshape development in emerging markets and safeguard livelihoods, economies, and, in this instance, food supplies,” stated Stephanie von Friedeburg, interim managing director and executive vice president, and chief operating officer of IFC, in a press release. “We are pleased to collaborate with Apeel in investing in a transformative technology that can potentially halve food waste, promote sustainability, and mitigate climate change.”