Up to 40% of food worldwide is wasted, with the pandemic causing more spoilage.
Shelf Engine, a Seattle-based company whose software is designed to reduce food waste, has raised $12 million in a Series A funding round. Such food retailers as The Kroger Co., Whole Foods and Target use technology from Shelf Engine.
The company, which launched in 2016, said it will use the new capital to hire 65 more members of its engineering and product development teams, along with 25 sales and support employees. The funding round was led by GGV Capital with participation from Initialized Capital, Foundation Capital, Correlation Ventures, 1984, and Liquid 2 Ventures. Hans Tung, managing partner at GGV Capital, will join the board of Shelf Engine.
The company’s technology enables food retailers to better manage inventory and improve forecasting via advanced machine leaning and other methods. Shelf Engine said that some 500 U.S. food retail stores have deployed its technology to cut food waste by nearly half, increase margins and boost profits. Shelf Engine said that more than 30% of highly perishable foods in grocery stores can go to waste — a figure that has increased during the ongoing pandemic.
The U.S. Department of Agriculture (USDA) and the Food and Agriculture Organization (FAO) of the United Nations estimate that up to 40% of food worldwide is wasted. In the United States, as with other developed nations, that number is likely even higher. Education along with better technology could help bring about food waste reductions.
“Forecasting is traditionally hard for grocery stores but regular buying patterns have been completely disrupted by the pandemic catching many stores in a costly dilemma of overstocking or understocking,” said Stefan Kalb, co-founder and CEO of Shelf Engine. “Shelf Engine is helping grocery stores, large and small, eliminate the uncertainties of the food supply chain.”
Cincinnati-based Kroger employs nearly half a million associates who serve 9 million-plus customers daily through a seamless digital shopping experience and 2,757 retail food stores under a variety of banner names. The company is No. 3 on The PG 100, Progressive Grocer’s 2020 list of the top food retailers in the United States. Target is No. 7 and Whole Foods is No. 24.