The practice of transforming food destined for disposal into new products has gained steam in recent years. Between celebrity investments and stories in mainstream media outlets from CBS News to Vogue, the concept of ‘upcycling’ – creatively reusing a ‘waste’ material to create a product of higher quality or value than the original – is in the spotlight. According to ReFED’s Innovator Database, more than 40 new “Food Product Creation” businesses have formed in the United States since 2012 (likely with more in early concept stages or conducted as projects of existing organizations). But before then, few enterprises practiced this model, and virtually none were dedicated to the craft. That changed in 2012, when a triathlete from Brazil moved to the U.S. with an idea for a new snack offering.
Bananas are the most purchased grocery item, and strict cosmetic standards coupled with high-production demands mean bananas are among the most wasted food items. ReFED’s A Roadmap to Reduce U.S. Food Waste by 20 Percent identifies Value-Added Processing, a synonymous term for extending the usable life of food by creating new products, as a food waste solution capable of diverting 102,000 tons of food waste annually while generating $285 million in Economic Value. Barnana is a for-profit enterprise based in Santa Monica (CA) that utilizes organic bananas that don’t qualify for export to create partially-dehydrated health snacks with very similar nutritional content as a fresh banana, yet with a much better shelf-life.
To learn about what it is like to be a pioneer in an industry with the potential to make a huge dent in America’s food waste problem, ReFED caught up with Caué Suplicy, Founder and CEO of Barnana. Excerpts from the conversation are below.
ReFED:Did you experience any challenges starting a business that utilizes a ‘waste’ product as a base ingredient? If so, how did you get past these issues?
Caué Suplicy:We didn’t set out to start a company that was going to tackle food waste – we weren’t even fully aware of the issue at the time. In the beginning, I noticed piles of bananas on farms that looked perfect but were left to rot because they didn’t qualify for export. The quantity varies from country to country; in Brazil, which has a large population, there is much less waste in the banana industry because there are people to eat the surplus and rejects. In small countries like Peru, Ecuador, and Costa Rica, the quantity of rejects is huge because they are producing bananas for the world, yet cannot sell the surplus in internal markets. We realized we could use the rejects for our product, helping farmers and the environment at the same time.
It took a long time, but we found the right banana producers to grow with and scale. As the first brand to create value-added products from reject bananas, we constantly have producers from all over seeking us out and asking if we want to buy their bananas.
R:Developing strategic partnerships with stakeholders like co-packers (third-party processors/packagers for food manufacturing clients) can be tough when starting out, especially for a social enterprise focused on impact and profit. How did you navigate this process?
C.S.:When you’re starting something, it is never going to be easy; you have to raise capital, you need to build a like-minded team…if all you have is an idea, it is difficult to get people to agree to work with you. To get past this, I relied on a core value of our company: passion. People felt my passion and bought into my vision – they wanted to be a part of this when the business grows. If you are not passionate about the problem you’re trying to solve, you’re going to give up. If you do something that is important to you, you will have what it takes to keep going. This is especially true for novel businesses solving a problem like food waste.
R:Now that Barnana has reached store shelves, what new difficulties does the company face?
C.S:There are thousands of different brands trying to get into stores like Whole Foods, and only a limited amount of shelf space. We need to think about packaging, think about how to emphasize traits like non-GMO, organic, upcycled…if another company is presenting something similar, how do we get the customer to choose us? This is where our differentiation as an ‘upcycling’ company really matters.
For the first time in history, people want to support businesses that have a story behind them and are willing to pay slightly more for this. We were already using bananas that didn’t qualify for export prior to advertising our product as such, but now we realize we can actually educate and connect with customers through our story. Our hope is that through engaging with our company, our customers become more mindful about wasting food on a daily basis.
R:In 2017, the Barnana team expects to process 4 million pounds of bananas. If 100 Barnana’s popped up across the country with similar processing volumes, that alone would reduce the nation’s wasted food by over 3 percent. How do you continue to scale the business and thus your impact?
C.S.:I wish more, larger corporations were thinking this way [using food that would otherwise be wasted as raw ingredient]. It is difficult when you’re small – it limits the difference you can make. If we were that much bigger, we would be saving that much more food – this is what excites me the most. For the first few years, we have done business mainly with natural stores (e.g., Whole Foods; Sprouts; co-ops), but we feel now, the traditional grocery stores are ready for our product. These are the grocery stores where a majority of people shop – and we go from being in hundreds of stores, to thousands.
Fortunately, Suplicy’s plan is already coming into fruition, with Barnana now distributing at Costco’s Midwest locations. Also, in January, Barnana announced that they had completed a $5.3 million growth equity funding round led by Trently Advisors, which the company will use to fund the production and launch of new products, and support their expansion into new markets.
Barnana’s success serves as inspiration for additional ‘upcycling’ companies to come online. Just how many new businesses will depend on how effective these pioneers are at educating necessary stakeholders (e.g., investors, distributors, retailers, consumers) in the supply chain on the economic and environmental opportunities associated with creating new products from what is now considered ‘waste’. ReFED’s Innovator Database will help you keep tabs on this sector, so be sure to check it out today!