Food waste is a significant global challenge with far-reaching environmental and economic consequences.
When food waste ends up in landfills, it decomposes and releases harmful methane gas, contributing to climate change. Additionally, food waste represents a loss of resources, including water, energy, and land.
To effectively address this issue, a multifaceted approach is necessary, encompassing behavioral changes, technological innovations, and policy interventions.
Food Cycle Science Corp. focuses on the technological aspect, offering a practical and efficient solution for food waste reduction after it reaches the consumer table. By providing on-site FoodCyclers, Food Cycle Science enables individuals, municipal communities and commercial entities to divert food waste from landfills and create a valuable byproduct.
The use of a FoodCycler can increase awareness of food waste patterns, potentially leading to behavioral changes that prevent waste at the source. This approach aligns a comprehensive strategy of addressing food waste at various stages, from prevention and reduction to recovery and recycling.
Capital gap
Despite the growing awareness of the food waste problem and the emergence of innovative solutions, there remains an annual $5 billion ‘catalytic capital gap’ in the sector, according to ReFED. This gap refers to the limited availability of investors willing to take on higher risks and provide patient capital to support early-stage food waste ventures despite the emergence of more and more innovative approaches.
Several factors contribute to this gap, including the perceived financial risks associated with emerging technologies, the long-term nature of food waste solutions, and the systemic nature of the problem that also requires behavioral and policy changes.
ReFED’s catalytic grants
ReFED is a U.S.-based nonprofit working to catalyze the food system toward evidence-based action to stop wasting food.
One of ReFED’s key initiatives is a Catalytic Grant Fund designed to accelerate food waste solutions across the entire food system by providing grants and post-grant support to initiatives that significantly reduce food waste and carbon emissions, helping to combat climate change. The Catalytic Grant Fund deploys its capital through an ongoing series of open call cycles that are built around specific, priority food waste themes. Here are some key features of the Catalytic Grant Fund:
- Catalytic: The Grant Fund focuses on opportunities where its funding and support can unlock additional capital and/or impact that might not otherwise have been possible.
- Data-driven: The Grant Fund’s strategy for deployment is rooted in ReFED’s data, analysis, and subject matter expertise about where grant funding and innovation support are most needed.
- Capacity-building: ReFED leverages its position at the center of the food waste reduction ecosystem to provide its grantees with non-financial support through connections to potential funders, strategic partners, publicity opportunities, and other support, as needed.
Flexible capital
The ReFED Catalytic Grant Fund provided a $100,000 recoverable grant to Food Cycle Science in 2023. A recoverable grant uniquely combines grant-like flexibility with loan-like repayment, allowing organizations to access funds without immediate repayment pressure while ensuring the funds can be recirculated to support future initiatives and maximize impact.
This recoverable grant played a pivotal role in the development and growth of Food Cycle Science. This funding was instrumental in increasing visibility for FCS’s food waste diversion solutions for U.S. municipal markets, building on its success in Canada. The grant accelerated market access, supported community partnerships, and helped multiple U.S. municipalities reduce landfill-bound food waste, driving the replication of FCS’s proven impact in a new market.
“Thanks to ReFED and Re+Circular Economy Grants’ support, the additional exposure in the US has supported the distribution of over 600 FoodCycler units across King County, WA,” said Food Cycle Science’s Author Bradley Crepeau. “Ongoing efforts have led to partnerships with crucial Senator staff and organizations within the Greater Seattle Area. Food Cycle Science is happy to support three different educational programs and has given over 50 free units to low-income housing at two YWCA locations.”
Food Cycle Science credited ReFED’s support for its ability to raise follow-on capital, including a strategic investment last year from Power Sustainable Lios.
Crepeau called the investment from Power Sustainable Lios “transformative.” In recent years, “we’ve developed innovative, patented technology, and demonstrated its value in the market,” said Crepeau. By partnering with Power Sustainable Lios, “we can access the capabilities, networks, and capital we need to embark on our next phase of growth, entering new channels and geographies with groundbreaking new products.”
Post-grant support
Beyond the financial support, ReFED also provided valuable non-financial resources. Their network of industry experts and partners connected FCS with potential investors and collaborators, contributing to their overall growth and visibility. ReFED’s advocacy work has helped raise awareness of the food waste problem and create a more favorable environment for food waste solutions.
The success of Food Cycle Science, bolstered by ReFED’s Catalytic Grant Fund, demonstrates the potential of innovative solutions to address the pressing issue of food waste. By providing catalytic capital and non-financial support, ReFED has helped bridge the investment gap and accelerate the development and adoption of food waste solutions in municipal communities. As the food waste sector continues to evolve, the role of catalytic capital will be increasingly important in seeding and scaling solutions.
Visit their websites to learn more about Food Cycle Science Solutions and ReFED’s work.
This article was authored by Dario Parziale, managing director at Toniic. The investment by ReFED’s Catalytic Capital Fund into Food Cycle Science was selected among the catalytic capital investments in the open-source Transaction Database, powered by Toniic thanks to the generous support of the Catalytic Capital Consortium (C3). The database highlights deployment trends in catalytic capital, and analyzes investment terms and investor types at the transaction level.
Go deeper with additional catalytic-capital case studies:
- “How catalytic capital helped unlock ecosystem regeneration in Brazil,” by Dario Parziale.
