June 7, 2022

By Lynda Kiernan-Stone, Global AgInvesting Media

At a time when one in seven Americans is food insecure, 52 million tons of food ends up in a landfill, not counting another 10 million tons of food that is left in fields discarded or unharvested each year. 

One-third of the food produced in the U.S. is never consumed, and food accounts for the most common material present in landfills or material being incinerated, at 24 and 22 percent respectively, according to the report From Farm to Kitchen: The Environmental Impacts of U.S. Food Waste released by the Environmental Protection Agency (EPA) in November 2021. 

This wasted food translates to a litany of “wasted” agricultural land, water, inputs, and energy – not to mention the greenhouse gas emissions released in its production and degradation to the environment and biodiversity.

The EPA outlines that every year, food loss and waste reflects:

~ 140 million acres of agricultural land, or the size of the states of New York and California combined.
~ 22 trillion gallons of water, or the equivalent of water usage for 50 million homes.
~ 6,350 million kg (14 billion pounds) of fertilizer – or enough to produce all plant-based foods in the U.S. for domestic consumption.
~ 664 billion kWh – enough energy to power 50 million U.S. homes for a year.
~ 170 million MTCO2e GHG emissions (not including emissions from landfills) – or the equivalent to the annual GHG emissions from 42 coal-fired power plants.
~ And enough calories to feed more than 150 million people each year. 

Despite these sobering numbers, and the fact that in 2015 the U.S. pledged to cut food waste in half by 2030, not much headway has been made toward that goal. But creative solutions are being developed by innovative thinkers and financiers. 

ReFED, a multi-stakeholder, non-profit composed of influential leading business, foundation, non-profit, and government leaders committed to reducing food waste, has partnered with Closed Loop Partners, a New York-based investment firm with a focus on building the circular economy, to launch a new $100 million Circular Food Solutions Funding Platform. 

This first-of-its-kind initiative is a blended finance investment and innovation platform designed to scale food waste reduction by mobilizing critical capital to where it is needed. With an emphasis on catalytic funding, this platform will provide private and philanthropic financing and other support for organizations, innovators, and municipalities that are developing solutions that will foster a 35 percent reduction in the food that goes unsold or uneaten each year in the U.S.

“Uneaten food is a major driver of greenhouse gas emissions, generating 4 percent of U.S. and 8 percent of global emissions annually, so the announcement of this new systems-inspired funding vehicle is an exciting milestone in the fight against climate change,” said Alexandria Coari, vice president, capital, innovation & engagement, ReFED. “Together with our partners, we’ve designed this Funding Platform to have a real impact on the amount of food going to waste, which in turn will drive reductions in greenhouse gasses. We’re inspired and humbled by the opportunity to help drive critical capital where it is needed most.”

Broken down, this platform, which has already attracted Seed funding from Google and the Betsy and Jesse Fink Family Foundation, will consist of three verticals: an $80 million investment fund, a $10 million grant fund [the ReFED Catalytic Grant Fund], and a $10 million innovation program. 

“With Google’s anchor funding in the Catalytic Grant Fund portion of the Funding Platform in March, we’re already seeing momentum,” said Emily Ma, head of Food for Good at Google. “Working together with ReFED and Closed Loop Partners in this manner significantly accelerates our ability to achieve our circularity commitment of maximizing resources in our own operations and our supply chains, and enable others to do the same.”

Jesse Fink, Trustee of the Betsy and Jesse Fink Family Foundation and a ReFED Board member, commented, “It’s amazing to see two high impact organizations such as ReFED and Closed Loop Partners working together to pioneer a new investment vehicle, particularly one that provides catalytic capital from a mix of philanthropic funders, impact investors, and corporations.”

Fink continued, “While there has been an exciting amount of growth in the sector in recent years, it needs to happen faster, and catalytic capital deployed at scale will unlock multiples of traditional capital. This groundbreaking funding vehicle was designed with that in mind, and we are proud to be a seed investor.”

By leveraging ReFED’s expertise in food waste data and solutions in the food waste arena, with Closed Loop’s experience in circular economy-focused investing and innovation, the Funding Platform will drive critical capital to develop and scale promising solutions. New data from ReFED indicates that private investment into food waste solutions since 2011 reached $7.8 billion, including a record $2 billion in 2021, alone. But, the partners stated, much more is needed to reach national and international goals of 50 percent reduction by 2030.

Over the life of this platform, ReFED and Closed Loop estimate that it has the potential to divert 10 million tons of food waste, resulting in 15 million mtCO2e being avoided, or the equivalent of taking 300,000 cars off the road every year for 10 years, and saving nearly 800 billion gallons of water.

But beyond these measured impacts, ReFED and Closed Loop also expect the platform to accelerate the flow of capital to food waste solutions through:

~ Demonstrating the vast impact potential of food waste funding opportunities.
~ The sharing of market intelligence on how scalable, feasible, and viable specific food waste solutions are, and,
~ De-risking investment in order to unlock more risk-averse types of funding. 

“There is a significant gap in what is needed for catalytic capital in the sector, and we feel the time is right to deploy this Funding Platform,” said Bridget Croke, managing director, Closed Loop Partners. “We’ve had a lot of great encouragement from a variety of stakeholders who are eager to participate, and we encourage anyone who is interested to join us.”

~ Lynda Kiernan-Stone is editor with GAI Media, and is managing editor and daily contributor for Global AgInvesting’s AgInvesting Weekly News and  Agtech Intel News, as well as HighQuest Group’s Unconventional Ag. She can be reached at lkiernan-stone@globalaginvesting.com.

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