WHY IS THIS ISSUE RELEVANT?
Nourishing habits and the food industry have changed greatly in the last 50 years. We have shifted the culture of utilizing all of the food available due to the fact of it being scarce, to a point where we do not even need to plan our meals according to what sits in our fridge and waste is not seen as irresponsible anymore.
According to FAO up to one third of all food is spoiled or squandered before people consume it. Therefore, food losses
represent a waste of resources used in production such as land, water, energy and inputs, increasing the green gas emissions in vain (FAO). Much of the waste is already known to cme from households and businesses, but a great part of it is actually produced during the process of production, in terms of rejected products that do cope with national health law but do not do so with private corporate standards. What this ultimately means is a huge amount of waste of product that is perfectly edible throughout different categories as it can be observed in the following graph:
This waste is having a serious impact not just in terms of utilized resources during production, but also because of gas emissions once the rejected products accumulate in dumpsters. The dimension of the problem is such that if greenhouse emissions derived from food waste were taken and computed as those of a nation, it would suppose the 3rd most contaminating country, right after China and the United States.
WHAT ARE WE GOING TO DO ABOUT IT?
After analyzing outcomes of crops of different fruit and vegetables, we have seen how the ratio of pieces that do not pass state standards or have a cosmetic appearance that would make them unmarketable, is very low. Moreover, studies indicate that over half of the consumers would be willing to buy oddly-shaped and other types of rejected fruits and vegetables if they comply with quality standards. Therefore, there is a great opportunity to bring fresh foods closer to the customers at cheaper prices, since agriculture producers would not make profit out of it otherwise.
The Recovery Project intends to do so by operating at a local level focusing on a dual strategy:
- MICRO LEVEL: By establishing small warehouses in cities with feasibility for such products to be sold, the rejected fruits and vegetables could be quickly processed and delivered to the customer who could simply buy them online. Since we are principally talking about fresh foods (salads, soups and smoothies among others), preparation does not take a long time, and individual customers as well as larger orders for companies and organizations would get to them as fresh as possible.
- MACRO LEVEL: Due to the quantities, it could also be profitable to directly sell the product in bulk to buffets and other similar types of business. Further options for big deliveries are feasible and profitable.
By achieving these objectives, local communities would benefit on both sides: producers will increase their income and have more financial security and consumers could have access to healthy items at a more competitive price that would suppose an incentive for individuals to eat healthier; meaning that also by joining rejected food management with awareness and education programs, a large positive effect would be reflected in society.
There is an opportunity to tackle a big part of the issue from the beginning and reduce this waste, improving the lives of suppliers and consumers while, at the same time, promoting an eco-friendlier approach for agriculture, the food industry and the eating habits of society. It is a sustainable business opportunity that would have an enormous positive impact in many different social groups; it just needs to get started.
HOW ARE WE GOING TO DO IT?
We have analized the market in terms of demand, supply and overall market structure coming up with the following business model canvas:
In terms of originality and feasibility there are a few points to be talked about:
A/ ORIGINALITY: We have already seen some initiatives like http://www.farmfreshtoyou.com/ where foods are directly delivered from the farm to your home, in some cases adding the value of having an organic label. However, most of these products are appealing to a certain part of the market and could be considered luxury products in terms of elasticity of demand as they are usually consumed when income rises and when it falls consumers switch back to the main products available. The Recovery Project brings originality through innovation in different aspects:
- Producers-Consumers Network: By providing direct contact such as its done in financial markets, individuals as well as businesses could directly access and buy products (macro approach) potentially taking advantage of the whole market depending on the level of customization available.
- New Channels: Deliveries could be made by farmers or arranged by them as they have a great deal of knowledge of the logistics. The Recovery Project would also be part of this proces by establishing alliances with transport companies and providing the connection between the two sides of the transactions, minimizing intermediaries and thus, reducing the price at the same time as keeping the revenue for producers at fair market levels.
- Vast Potential Market: What selling such raw and elaborated products would ultimately mean is the penetration of a new market into the already existing one as some products that were not even considered as sellable could now be easily acquired from the comfort of the computer or phone. Part of the targeted customer (health and enviromentally conscious) would be shared with other similar products, but the maority of the marketshare would be formed by those who previously did not have access to such foods or considered them as too much of a luxury to actually purchase them.
B/ FEASIBILITY: As it has been previously explained, there is potential success for such products in the market; however, how can we be sure that this idea will indeed succeed and have a commercial impact strong enough to keep it running? Various articles ilustrate the reality in which agricultural producers (especially those of fruits and vegetables) live where retail chains and stores end up getting between 65-75% of the total profit,leaving farmers in a position where in some cases, they do not even break even.
We though that even if the numbers add up, we needed to go to those who would directly be involved in the daily operations of the business, and so we met with several stakeholders that ocuppy differents position throughout the chain, from producers to restaurant owners and we got positive feedback from all of them. Here is a list of such supporters:
- Farmers Associations (USA, UK, Northern Europe & Spain)
- Transport Companies: They simply showed suport as it could mean more business to them.
- Restaurant Owners
- Gobernment Officials and Organizations (Regional Agricutural Comittees)
- Foreign Ministry of Spain and other International Organizations
After all these consultations we have come up with our business model wich you can see together with expected impacts in the following infographic.
Were there any questions contact the Recovery Project team at email@example.com.