In the first real test of the potentially transformative power of its food preservation technology, Santa Barbara, California-based Apeel Sciences is bringing its innovative food processing and supply chain management services to distribution centers in select markets in Asia, Africa and Latin America.
The aim is to reduce food insecurity among farmers, who are one of the most vulnerable populations to malnutrition, said James Rogers, director of Apeel.
"Most of the fruits and vegetables grown on this planet are grown by smallholders, and two-thirds of the people who are unsafe are farmers too," Rogers said.
The reason farmers are more at risk than other populations is because of their inability to get the maximum benefit from their crops due to the risk of spoilage, Rogers said
By introducing its spoilage preservation technologies and willing buyers to existing Apeel customers in markets such as the USA, Denmark, Germany and Switzerland Rogers said the company can have an oversized impact in improving the amount of money that goes into a farmer's pocket.
"The program with IFC is to build supply chains," he said. "The value lies not only in the longer-lasting products, but also in the market access for these longer-lasting products."
The first markets are Mexico, Costa Rica, Peru, South Africa, Kenya, Uganda and Vietnam, where Appeals Technology treats avocados, pineapples, asparagus and citrus fruits like lemons, limes and oranges.
In a way, this is the culmination of the work Appeal has done in recent years to get grocers around the world to join its approach to waste reduction.
The company has always placed smallholder farmers at the center of its corporate mission – ever since Appeal was founded in partnership with the Bill & Melinda Gates Foundation and International Development Department. The aim has always been to extend the shelf life of fruits and vegetables produced by farmers without access to the modern refrigerated supply chain. It's just that the company has had to refine its technology and build a retail network over the past several years.
To achieve this goal, Apeel raised over $ 360 million, including a $ 250 million funding round that closed earlier this year.
Rogers' plans will come true as the company brings demand from international markets to these local producers through regional exporters.
Without access to a chilled supply chain, the majority of smallholders can only reach local markets where supply exceeds demand. The perishability of plants creates market conditions in which these fruits and vegetables cannot be exported, leading to market dynamics that exacerbate poverty and increase food loss and food waste among people who earn their living on agriculture, Appeal said .
"With more time, we can get these small producers involved in the global food system and help them reap the economic value inherent in this natural resource," said Rogers.
Introducing a new demand in international markets that can be met by treating crops with Appeal technology can create a positive cycle that ideally increases the prices of crops and brings higher payouts to farmers. At least that is Rogers' vision for the latest implementations of Appeal technology at regional distribution centers.
There is potential for the middle men distributing the products to overseas buyers to amass most of the value from the adoption of the Appeal technology, but Rogers rejects that scenario.
“The work is to get these small producers more directly into the exporter's supply chain. Now that you are familiar with the technology, you can use the technology to create cooperative value and use these cooperatives to unlock value for the very small producers, ”he said. "As the demand for products grows in the markets, the supply has to come from somewhere. Exporters deserve their cut on a volume basis. The way they add value is by increasing their volume. You want to increase the volume and demand suitable for export. Then the challenge turns around and it does not become a demand challenge, but a supply challenge. And they have to encourage people to get involved in this offer. "
To fund this international rollout, Appeal raised an additional $ 30 million from investors such as International Finance Corp., Temasek and Astanor Ventures .
"Innovative technologies can change the course of development in emerging countries and save livelihoods, economies and in this case food," said Stephanie von Friedeburg, interim managing director and executive vice president and chief operating officer of the IFC, in a statement. "We are excited to partner with Apeel to invest in a breakthrough technology that can cut food waste in half, improve sustainability and mitigate climate change."