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In recent years, major hospitality chains have jumped on the sustainability bandwagon, urging guests to forego the daily laundering of their towels and sheets to save water and energy. One of the next frontiers for the mega-hospitality companies is sourcing their food more responsibly.
FoodMaven, a Colorado Springs-based tech startup, wants to help make that happen. In the process, the company is striving to give a leg-up to small, local farmers and ranchers by enabling them to distribute their food seamlessly to major customers in their markets.
FoodMaven today is announcing its partnership with Hilton, first in Colorado and soon in Dallas. The company has already begun providing food to Hilton properties in Denver, including DoubleTree by Hilton Hotel- Westminster, Hilton Denver City Center and Hilton Stapleton North and in other cities, including Colorado Springs and Pueblo. Deals with other hospitality chains are also in the works.
Patrick Bultema, chairman, CEO and cofounder of FoodMaven, explained his company’s mission to me over coffee during a visit to Manhattan. Through its platform FoodMaven supplies hospitals, universities, hospitality chains, food service companies, such as Sodexo, restaurants and even pet food makers with food that would otherwise be ”lost” to the system.
That lost food could be surplus product (most farmers produce more than they can sell), imperfect produce or the bounty of local farmers who have no way to distribute their products widely. The idea is to keep high-quality from ever getting to the landfill.
Consider Colorado poultry producer Red Bird Farms, which markets its antibiotic-free poultry as fresh, not frozen, and often ends up with a surplus at the end of the week. If they freeze it, it becomes “out of spec,” meaning the farm can’t sell it to retail customers who expect fresh chicken. But FoodMaven can sell that perfectly good meat to university kitchens, food service companies and other clients through its online marketplace.
Here’s another example: Unilever changed its mayonnaise label and all the old product was suddenly obsolete. But that doesn’t make the mayo any less useful to a university, for instance, for whipping up a batch of tuna salad.
“We figured out how we could intervene and capture food across that full spectrum of reasons and that full spectrum of sources from the farm all the way to the grocery distribution center,” Bultema said.
FoodMaven has already attracted some high-profile investors, including members of the Walton family, the biggest shareholders in Walmart; the Pritzker family’s Tao Capital Partners; and Walter Robb, former co-CEO of Whole Foods and now a board member of FoodMaven. Earlier this year, FoodMaven acquired a Colorado meat processor, which will enable it to cut restaurant-ready steaks from sides of beef provided by local ranchers who lack the resources and regulatory approvals to do it themselves.
FoodMaven’s mission also resonated with Hilton. Its Travel With Purpose campaign aims to slash the company environmental impact in half by 2030. As part of that goal, Hilton is looking at solutions to cut food waste and expand sustainable sourcing by partnering with innovative local companies, Terry Jenkins, senior manager of corporate responsibility for the Americas, explained in a joint statement with FoodMaven.
Strohauer Farms in LaSalle, Colo., north of Denver, benefits from working with FoodMaven. Among other crops, the fourth-generation family farm grows potatoes–lots of them, both conventional and organic. But about 15% of the crop gets sorted out for one reason or another. Maybe the red potatoes aren’t red enough for consumers’ tastes, or the Yukons have silver scurf, a fungus that causes blemishes.
“One of our issues certainly is to utilize all the product that we grow,” said farmer Harry Strohauer. His daughter, Amber, is in charge of the farm’s business development.
Before they teamed up with FoodMaven, many of those potatoes ended up as cattle feed; others went to soup kitchens. Now the Strohauers can get their products into restaurants and hotels they couldn’t access before.
“What we are good at is growing produce,” said Amber Strohauer. Having to make sales and marketing calls and hire more truck drivers, who are hard to find these days, “really takes away from our specialty,” she said. FoodMaven offers warehousing, distribution and food safety services that small farmers can’t handle on their own.
Some of Strohauer’s potatoes are now showing up on the menus of Nikki Newman, executive chef at Hilton Denver City Center. Buying from local farmers through FoodMaven allows him to enhance the guest experience with more artisanal offerings as consumers become more concerned about where their food comes from. By ordering through FoodMaven, Newman can obtain fresh Colorado eggs, homemade pickles, goat cheeses and sausages, among other products, while saving about 20% on purchases.
FoodMaven contacted Newman last summer about partnering with Hilton. “It was an easy decision to make, given their mission and desire to provide food at a discount that might have gone to a landfill,” he said.
Bultema can recite the stats on food waste by heart: about 40% of all food grown in the U.S. goes to waste, representing about $200 billion in losses to the economy. And that waste accounts for about a third of all the garbage that ends up in landfills. Meanwhile, U.S. Department of Agriculture data show that 68% of farmers are in the “economic red zone.”
“Basically, they’re one bad crop away from being in total financial trouble,” said Bultema, who comes from a family of farmers.
While massive amounts of good food disappear from sight, a shocking number of Americans are food insecure. ”Most most peoples’ pets eat better than 47 million Americans,” noted Bultema. “How is that possible?”
All these numbers add up to a big mission and plans for national expansion. The company will move next into Dallas because the city is a big focus of Hilton’s sustainability initiatives. FoodMaven is in the process of acquiring a food distribution business there. Acquisitions will continue to be a major part of the company’s growth strategy, he said. All told, FoodMaven plans to enter six new markets this year. And that will take considerable resources.
“A big round will happen late this summer. We’ve raised $20-some million to date. We’ll raise something in the neighborhood of a billion before we’re said and done,” Bultema said.
March 15, 2019 at 01:04PM
Forbes – Entrepreneurs