Innovation

Observing that food waste was largely occurring at the farm level when produce is deemed “ugly” or imperfect, Ben Simon and Ben Chesler founded Imperfect Produce in 2015. Simon and Chesler saw an opening to create new markets for farmers to sell produce that would otherwise go to waste. With the mission of eliminating food waste to produce a sustainable food system at the core of Imperfect Produces’ culture and business model, the purchase of ‘imperfect produce’ from farmers has created unique opportunities to innovate along the produce supply chain. Specifically, Imperfect Produce offers farmers a new market to sell “ugly” produce, a solution to reduce climate impacts associated with food waste emissions, healthy affordable food to those in need, and living wages for employees.

To farmers, Imperfect Produce pays roughly triple the cost of what processors would typically pay for produce. The purchase of this produce offers farmers another revenue stream where previously farmers would generally either till “ugly” produce into the soil, feed it to animals, or throw it in a landfill where it emits a greenhouse gas called methane. Through its model, Imperfect Produce recovers this produce and delivers it at a discount. Dylan Bondy, Head of Outreach, inferred that “there were almost no markets to know what was being thrown out at the farm level before Imperfect Produce. We pay them (farmers) well for the “ugly” produce and we are still able to offer that produce at a discount.”

To accomplish this, Imperfect has several distribution warehouses in communities around the country where it ships produce via its online ordering system. Using an online subscription model, Imperfect gives customers the ability to customize a box and get it delivered directly to their doorsteps.

The company’s subscription pricing also presents a more affordable option when compared to a grocery store with roughly ~30% savings over grocery store prices. For those experiencing low-incomes according to SNAP, Imperfect also offers a reduced-cost box which shaves an additional 33% off its standard box price. In total, these customers would receive a discount of over 50% what would normally be paid at a grocery store.

Beyond its subscription delivery service, Imperfect builds strong bonds with those in the communities it serves by creating partnerships within these communities with chefs, community leaders, municipalities, food banks, and anyone interested in partnering. Imperfect hires individuals within those communities providing permanent jobs at livable wages, in the 75th percentile, with benefits including an equity stake in the company, health care, and ability to earn an annual raise. Dylan Bondy, Head of Outreach, says “everyone deserves a living wage and that is something we are committed to doing.” As a priority, Imperfect seeks to support the communities in its growing areas of service as it works to change the food system for the better. Vertical integration also provides Imperfect with more control of its delivery operations and increases reliability within its distribution networks to customers.

Inspiration

Simon, a student at the University of Maryland, discovered that over 20 million pounds of food is thrown out on college campuses. After this discovery, Ben Simon, along with some friends, started a non-profit called the Food Recovery Network (FRN) to reduce food waste on college campuses and provide meals to those who are hungry within community. This prompted Simon to search for the root causes to the food waste challenge. Simon discovered that roughly 40 million Americans experience hunger and there’s an estimated ~20 billion pounds of produce wasted every year at the farm level. To tackle the issue from the source, he started asking farmers why this waste was occurring. Simon learned that farmers have to throw away and take a loss if their produce does not meet form and image of the industry standard. It was here where Ben Simon and Ben Chesler who worked for the FRN came together to create a solution to food waste at the farm level.

In 2015, upon founding the company, the focus was on paying farmers well and changing their behavior to pick produce even if it doesn’t meet grocery standards. This business model secured farmers a new stable revenue stream and, later in the supply chain, allowed Imperfect to sell produce to consumers at a discount. In turn, Imperfect can divert edible produce from landfills and reduce overall food waste.

Overall impact

Imperfect Produce is committed to reducing food waste (SDG-12 Responsible Consumption & Production, SDG-13 Climate Action), quality, supporting farmers financially (SDG-8 Decent Work and Economic Growth), providing affordable health food (SDG-2 Zero Hunger) and bringing transparency and honesty to the produce industry.

Imperfect Produce is systematically changing the way consumers perceive and understand value. By building a business with the core principle of selling what has previously been deemed trash, Imperfect Produce’s impact can give rise to new ideas and business innovations that can grow out of an emerging waste economy. The success of Imperfect Produce brings attention to a critical problem and presents a solution that disrupts traditional models. Imperfect Produce started by asking questions that others have assumed to be law of the land (i.e. that products need to be pure, that customers won’t sacrifice or compromise, that selection of the best quality ultimately means a less desirable portion will be invalid in the market). The growth of Imperfect Produce’s model signals a much larger trend beyond the food industry that there are opportunities in the current economy to minimize impact and maximizing the capture and delivery of value thereby shifting toward a more circular economy.

Imperfect Produce is building a movement, addressing a significantly flawed industry in a humorous and optimistic manner. By reimagining “ugly” produce, IP has introduced innovative marketing techniques to personify rejected fruits and vegetables with the “googly eyes” campaign. This allows consumers to see value in what previously was documented in unattractive ways. By simply changing the way a consumer sees a product, Imperfect Produce aims to shift consumer behavior beyond current industry standards.

Dylan Bondy emphasized how Imperfect Produce customers are able to create real change when they invest in a subscription with the company. Customers are “saving time, saving money, and given an opportunity to vote with their dollars”, supporting a business that values less waste, better nutrition, affordable pricing, empowering farmers, combating climate change and supporting a business that is maximizing utilization, all while giving society a new lens to perceive true value. Why place value on the appearance of a piece of food if the taste and nutrition are the same if not better? There is beauty in uniqueness and the widespread acceptance of nutritious and delicious “ugly” food can improve livelihoods throughout current and future food systems.

Business benefit

Imperfect Produce’s business model offers new and fruitful opportunities at several points along the value chain upon which it has built its success. First, by sourcing produce that is generally a waste product from farmers, Imperfect Produce can provide fair compensation and a new revenue stream to its network of over 150 producers. Through its strong and mutually-beneficial relationships with these farms, Imperfect Produce has built a thriving subscription service and local distribution networks, which ultimately supports a reduced-cost box to low-income customers as well as substantial donations to local food banks. In this case, the subscription model represents an ideal platform to facilitate growth in its current service areas as well as creates the opportunity and visibility to scale to new regions.

Since its inception, Imperfect Produce has been able to replicate its initial success to several new regions beyond the western states. As Imperfect Produce has grown, it has developed a strong brand and community presence. As a mission-driven organization, Imperfect Produce presents a compelling story of passion, dedication, and transparency where stakeholders from the Imperfect Produce service areas including staff, farmers, customers, and other partners can directly tie the value created by the organization to its mission and 4 core principles. The alignment between its business model and its social and environmental values not only shows a strong potential for meaningful impact on food systems and waste but it also demonstrates a replicable model for continued success and subscription growth.

Social and environmental benefit

Food waste represents a flaw in system design. The economic loss for farmers and low-income consumers demonstrate that traditional agribusiness models are unsustainable. Add the significant threats to climate change from methane-emitting by decomposing food waste at landfills and it becomes very clear why the work Imperfect Produce does is vital.

Landfill reduction by means of creating a new market for “imperfect” produce, offers significant social and environmental benefits. Farmers are financially empowered to increase margins as Imperfect Produce provides fair compensation for what otherwise would be losses on both the financial books and the land. This allows farmers to cover operating costs and allows Imperfect Produce to share the load of the logistics, such as packaging and transporting the produce to end consumers. To illustrate its commitment to its values and empowering farmers, the company relies heavily on produce sourced from family farms or cooperatives (78%) while the rest is split between wholesale (13%), grower representatives (6%), and corporate farmers (3%).

On the environmental front, Imperfect Produce has saved 40 million pounds of food from landfills, 1.2 billion gallons of water, and 110 million pounds of CO2. The benefits for continued prosperous food production on farms is felt in the utilization of a product like broccoli leaves, which previously had no market. When Imperfect Produce is able to introduce new products to its customer base, it can trigger an incentive for farmers to diversify their crops, which increases biodiversity and resiliency.

When Imperfect Produce expands to a new market, it sets up new infrastructure to support its growing distribution network, creating many local full-time jobs in the community. Imperfect also donates frequently to local food banks. To date, Imperfect Produce has also donated an estimated 2.2 million lbs of produce to local organizations, providing fresh food to communities most in need. As partnerships are essential to its growth strategy, Imperfect Produce continues to build a network that thrives in empowering communities, lifting spirits with affordable nutritious produce and helping re-establish a healthy ecosystem.

Interview

Dylan Bondy, Head of Outreach