Good Morning
What we’re reading this week:
Wave-powered tech: (TB)
An intro to wood harvesting and storage for carbon removal (CLD)
CO2 removal is not a current climate solution (N)
The Greendicator
Top Deals of the Week
![Sepura (batch 2 pre-order) – Sepura Home Sepura (batch 2 pre-order) – Sepura Home](https://substackcdn.com/image/fetch/w_1456,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F87e68d89-f54a-43a6-82a5-0e675ff19dee_2000x2000.png)
Everstream, a startup using AI to improve supply chain sustainability, raised a $50M Series B led by 1GT, StepStone Group, and Columbia Capital (BW)
Industrial supplier of bio-fabricated silk protein materials AMSilk raised a $27.3M Series C extension led by ATHOS (FN)
X Shore, a 27-year-old Stockholm company that makes electric boats, raised a $27.4 million. SEB Investment Management was the deal lead. (TEU)
E-mobility startup Magenta Mobility raised a $22M Series A-1 led by bp ventures (FN)
HeatTransformers, a Dutch heat pump installation startup, raised a $16.4M Series A led by Energy Impact Partners (FN)
tado, a Munich, Germany-based intelligent home climate management company, raised a $13.1M round led by S2G Ventures (FN)
Contained vertical farming system startup Babylon Micro-Farms raised an $8M Series A led by Venture South (TC)
Helical Fusion, a Tokyo-based provider of a helical fusion reactor, raised a $6M seed round led by SBI Investment (FN)
Magnotherm, a four-year-old German startup that is developing technology to remove environmentally harmful refrigerants, raised $6.9 million. Extantia Capital led the transaction (TC)
Zero Cow Factory, a New York-based biotechnology company producing animal-free protein and dairy products, raised a $4M seed round led by Green Frontier Capital, GVFL and piVentures (FN)
Sepura Home, a startup making your kitchen sink a composter, raised a $3.7M seed round led by sink-maker Blanco (TC)
Ecosapiens, an eco-conscious collective that defends the climate through creative tech, raised a $3.5M seed round led by Collab+Currency (FN)
Green Theory
The Real Cost of A Full Fridge (Whose Waste is it, Anyway? Part II)
Last week, we discussed the fundamental reason so much food gets wasted, at each level from farm to fork. Whether you’re a grocer stocking your produce aisle, or a shopper stocking your fridge at home, each handoff in the food supply chain balances the theoretical pain of running out of food vs. the pain of wasting food. In operations management, this tradeoff is often evaluated around the idea of the Newsvendor Model, and it applies to more than just business decisions.
For a grocery store, the “pain” of running out of strawberries for the day is that they lose the business (profit) of the remaining shoppers looking to buy strawberries. The pain (cost) of overstocking—if you don’t care about (pay for) the actual societal costs of food waste—is roughly the wholesale price at which they get their strawberries.
![](https://substackcdn.com/image/fetch/w_1456,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F586c0352-27e2-4cdc-80c1-4dbd638119db_1774x1298.png)
The cost of running out of something has another big consideration to include for big grocery stores’ strategies. If they’re out of the (even niche) item that you want, they know they likely lose the rest of your business on buying other products, too; after a few incomplete shopping trips, you’ll opt to go to a different store altogether.
Wait, how is my refrigerator akin to a newsstand?
At home, we commit food waste using the same logic, even if it’s less consciously orchestrated. Do I need 6 eggs, or a dozen? If I use 6 right away, I’ll have to go back to the store, or go without eggs for a little while. If I buy 12, and only use 6 before the rest spoil, at least I had the option to use 6 more, right? Shopping for food isn’t easy, because we can’t perfectly know what we’ll want, when. Unless you live inside a supermarket, there’s a cost to each trip, so it takes some planning to make the trip count. The same goes for a grocery store in trying to predict what they need to stock every day.
For these reasons, the self-serving, financially optimal amount of food to purchase and “stock” (at home, or in the store) is often higher than the amount we actually expect to sell, or eat (not waste). Subsidies in producing food, and externalization of societal costs, creates an artificially low dollar cost of food waste. In turn, the lower cost of overstocking increases the gap between a store’s expected and “optimal” quantity, and waste increases.
Unfortunately, the planet, our communities, and our healthcare system all pay the price for the cheap grocery store food we may take for granted in many parts of the US, while every county has individuals suffering from food insecurity.
What can software do about it?
Forecasting demand is no easy task, with many variables to consider. Further, these decisions are pushed out to many independently operated businesses. If software can help combine historical and live data with automated calculations, perhaps it can systematically target sources of food waste that are costing the business more than expected. Afresh has raised over $100M, and rolled out its software to Albertsons Companies (including Safeway and Jewel-Osco supermarket chains), suggesting that there’s room for grocers to save money and food in optimizing forecasting with tech tools.
Though much less far along in their journey, a women-founded Icelandic company with a brilliant name, GreenBytes, is applying the same framework as Afresh to a segment with perhaps even less forecasting and ordering prowess, and generating even more risk, cost, and waste as a result: restaurants.
![](https://substackcdn.com/image/fetch/w_1456,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2Fe82b58c1-3ac4-441f-b7fe-c6cffadd7929_1128x994.png)
It’s possible, for certain forecasting models and certain foods, that improved visibility into inventory forecasting might suggest ordering and wasting even more food, rather than less, due to the same reason the Newsvendor Model creates food waste in the first place; saving costs isn’t exactly the same as growing or sustaining a customer base. At the same time, predicting daily inventory levels is hard, and in ensuring that perishable foods are both there when people need them, and less likely to be there when people don’t, software offers a chance to reduce the mismatch in optimal vs. expected quantities by letting decision-makers more easily elevate the rigor of calculations.
Last Call for Donuts
Have you ever seen a perfectly good box of donuts dumped in the trash at 5pm? Downstream of the decision to purchase food to stock the restaurant or grocery store, could software make money and reduce waste, focusing on this wasted donut box?
Companies such as Too Good To Go suggest they decrease food waste, by letting consumers “rescue” food from their favorite restaurants right before it’s thrown out. This concept seems sensible: we’d all rather the restaurant earn a few extra dollars at day’s end, especially knowing more meals got an extra shot at nourishing someone, rather than going in the garbage or compost.
![](https://substackcdn.com/image/fetch/w_1456,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2Ffd3b2c16-de07-49c4-aa4f-5c47057220dd_1368x576.png)
According to the Newsvendor Model, however, offering a restaurant an extra way to sell overstocked perishable food would lead to more food waste over time, not less. When a business can suddenly salvage perishable products for discounted revenue, the cost of overstocking goes down, and the restaurant’s optimal quantity of food to purchase gets even higher than the expected quantity. That being said, this platform could let restaurants feed more people with less overall risk, and unless regulated or taxed properly, food waste is not a restaurant’s main concern, nor is reducing it their typical key role in society.
Extra! Extra! Read all about it.
The Newsvendor Model offers an insightful look into part of the reason the food supply chain has such a high level of waste, end-to-end. Even though the model is imperfect, and it’s difficult to account for every relevant metric, its prevalence in operations management theory and absence from food waste discussions combine over a complex, but critical area of climate tech undergoing massive-scale experimentation.
With more than 5% of all global emissions attributable to food waste, will software companies help solve hunger and waste simultaneously, or entrench and accelerate the social ills of private companies profiting on cheap overstocking? To answer this question, company by company, we ought to consider how the software alters the difference between expected and optimal amounts of perishable foods.
Post Script:
Special thank you to all of our readers who helped contribute to the research that went into these last two articles. Between students, business leaders, data scientists, and food sector professionals, your perspectives each lend invaluable insights into understanding emerging “food waste tech” and behavioral science, and their places in climate tech, society, and business.
Special thank you to all of our readers who helped contribute to the research that went into these last two articles. Between students, business leaders, data scientists, and food sector professionals, your perspectives each lend invaluable insights into understanding emerging “food waste tech” and behavioral science, and their places in climate tech, society, and business.
The Closer
Red pandas!?
First person to trademark GreenByte Greenbite GreenBytes is gonna be the real winner in this race. I got an email from the Zilkha Center the other day with a section of their newsletter with the same name.
Great stuff as always. Love forecasting content.