E-commerce

Why Kellogg’s is backing Yume – the ‘eBay for surplus food’

Food waste is one of those unavoidable certainties in commercial food production and it is proving costly not just to businesses but to the environment.

Each year, in Australia alone, 4.1 million tonnes of food goes to waste in the commercial industrial food space.

Katy Barfield founder and CEO of Yume uses a visual analogy to describe the enormity of the situation that really hits home.

“If you stacked 4.1 million pallets of food on top of each other, each weighing a tonne, it would reach all the way to the International Space Station. And it would do that 14 times over. That is just Australia, every year, just commercial industrial food waste,” Barfield told Inside FMCG.

Originally the founding CEO of food rescue organization, Second Bite, Barfield is now leading the charge at Yume, an online b2b marketplace that provides a commercial option to manufacturers and farmers to deal with excess food.

Suppliers can list quality surplus food on the platform at their chosen price, and buyers can purchase perfectly good food at a discount.

“When I first put the idea out there people said, ‘you are bonkers; no one is going to go for this. No one who is going to buy surplus food off a platform sight unseen.’ Well $4.5 million dollars later, I’m proud to say, ‘yes they are’,” Barfield said.

Yume acts as a connector between suppliers and buyers to help surplus food find a new home, with the likes of Unilever, Baiada and Kellogg’s already onboard.

Kellogg’s is using the platform to sell its excess ingredients which could be a result of deleted product lines or raw materials that are no longer needed for production.

“We pushed all that out to market and gave them a return of over $400,000 in two months and moved over 100,000 kilos of stock,” Barfield said.

“We don’t touch any of that, we’re just a connector really, like an eBay for surplus food.”

The B2B nature of the platform means nothing is going out to consumers and suppliers are in control of the whole process.

“They have the control; they list the product, and they dictate the price. But the market dictates whether or not that price is realistic.”

Yume encourages suppliers to allow potential buyers to make an offer, to generate a bit of excitement. The supplier then has the right to accept, reject or counter the offer.

Reasons for surplus food

Manufacturers can be left with perfectly good surplus food for a variety of reasons such as spelling errors on packaging, incorrect allergen information.

Food Standards Australia New Zealand (FSANZ) reported a record 106 food product recalls in Australia in FY19, a large chunk of which was due to undeclared allergens.

FSANZ said that allergen recalls are often due to poor information on labels; supplier verification and mistakes on packaging.

“There’s never been a solution for products where there’s an allergen missing on the packaging. That is a huge problem for a manufacturer,” Barfield said.

Yume provides complete transparency so suppliers can control where the food goes. They can either have it brand facing or white labeled, but must provide all necessary certifications.

“If it’s made for retail environment, we’ll ensure it goes into a commercial or a manufacturing environment, so the product will never appear on a shelf again; yet you can get a return on it.”

So what happens when surplus food doesn’t find a new home, where does it go? The reality in some cases, is quite disturbing. Often manufacturers will bury product deep in the ground where it will never be discovered.

“It’s called deep burial or secure burial, where branded goods are wrapped in plastic and put very far down in the belly of the earth so that they will never see the light of day again and that brand will never be seen,” Barfield said.

“It’s pretty shocking and most people don’t realize the enormity of the problem in the commercial food industry. This is right at the top of the food waste hierarchy.”

Brands bury food for a number of reasons, mainly because of brand risk. With such strict packaging laws, many are so concerned that it could somehow get into a retail environment that they bury it instead.

“The reality is the amount of time it would take paid to depack all of that and repackage it all and then find a new market for it… now you’ve lost a bit of shelf life; It just becomes more efficient and economical to put in the ground, even though it doesn’t necessarily make sense.”

Big buyers

There’s already a host of big names on the buyer side including Accor, Spotless, Sodexo, Melbourne Convention Center and Harris Farms to name a few.

“These products are going to premium customers, so we need to make sure that we’ve put all the protections in place to make sure that the buyers feel confident that it will be safe and good quality.

“People never associate surplus with quality, but actually, given the nature of the platform, we’ve seen everything from sirloin steaks to salmon, from quality suppliers.

Barfield is also eyeing up the possibilities of collaborating with government, the biggest procurer of food in the country.

“Prisons, hospitals, aged care, defence, the amount of food that they buy is extraordinary. Now what a wonderful solution for our manufacturers who’ve got off spec product or packaging. It saves the public purse, saves the environment and gives money back to Australian manufacturers.”

Only getting started

Barfield knew that she needed to create a really easy option to get people onboard and to date the platform has prevented over 1.2 million kilograms of food from going to waste, and returned over $4.5 million to manufacturers and Australian farmers.

“We’re only getting started and we’re already having quite a significant impact. We’ve seen three fold growth in the last 12 months which is really pleasing,” she said.

“It took four and a half years of sleepless nights, barely seeing my kids and a lot of stress to get it to this point. As someone that’s really passionate about food waste, it’s really encouraging that [companies] seem to really care about the difference they are making.”