Can Americans Learn to Love 'Ugly' Produce?

$160 billion worth of produce in the US gets tossed every year. Misfits Markets wants you to eat ugly produce instead.

Published online: Jan 28, 2019 Articles Chavie Lieber
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Source: Vox 

When shopping for produce, it’s only natural to pick up what looks the best.

We assume the shiny red apples will be crunchier than the bruised ones, the smooth peppers will taste better in your salads than the mushy ones. Those oddly shaped carrots are an unspoken, yet firmly understood, hard pass.

About one-fifth of produce is trashed simply because it’s unattractive.. And while food waste experts have said tossing perfectly edible produce is a global issue, Americans are particularly bad offenders. Some 60 million tons, or $160 billion worth, of fruits and vegetables gets thrown away in the United States every year, and the Environmental Protection Agency estimates that the average American family of four throws out an annual $1,600 worth of produce.

But just because produce is ugly doesn’t mean it’s not edible. Misfits Market, in fact, wants you to eat it. The Philadelphia-based startup, which launched over the summer, sells subscription boxes of ugly produce, which the company buys directly from farms. Misfits’ ugly fruits and veggies sell for 30 to 50 percent less than their retail prices.

It’s a tricky business, of course, selling unsellable produce. Plenty of unattractive produce gets donated to food banks and soup kitchens, so it might feel wrong to buy fruits and vegetables that could otherwise end up in the hands of the needy. I recently chatted with Abhi Ramesh, the CEO of Misfits Market, over the phone. I’ve volunteered in soup kitchens before, and am familiar with the dire need for unwanted produce. But Misfits Market kept popping up in my Facebook feed, as friends gleefully reported ordering hauls of ugly produce.

Ramesh explained how his company is providing a new line of income for farmers who don’t have the infrastructure to donate their ugly produce, and how he sees Misfits as playing a major role in helping decrease global food waste. This interview has been edited and condensed.

I used to work for a private equity fund called Apollo Global Management in New York, and I studied food supply logistics. It was there that I noticed how old-school and largely inefficient the industry was. There was so much human error that caused food to perish, and there’s also not a lot of infrastructure across the country to store perishables properly. There’s so much food being thrown away.

Last year, I had an interesting experience at an apple orchard, where a farmer walked me through his sorting facility when I went apple picking. He showed me the apples going to groceries and which he sold to companies that make products like cider.

There was a big percentage that would sit in his warehouse, though, because they were bruised or ugly. He didn’t have the resources to donate it all, so some was donated, but a lot went to waste. A lightbulb went off for me there: to bring farmers access to customers who would buy this kind of produce, and to keep it from going to waste. It took a few weeks to set up Misfits after that orchard experience, and we launched in summer 2018. We now ship to all the major cities in Pennsylvania, New Jersey, Connecticut, and New York.

So what do customers get when they buy from Misfits?

We send weekly groceries that are significantly marked down from grocery store price. People can buy a one-off box, or they can sign up for weekly or biweekly subscriptions. A small box, the Mischief box, costs $19 plus shipping, and the larger order, the Madness box, $34 plus shipping. All the produce is organic, and you’re paying about $1 per pound, whereas at a grocery store you’d pay about $2.50 per pound of organic produce.

How do you guys know you aren’t selling customers rotten produce?

We have a team that does quality checks, and this is very top-of-mind for us. We’re selling misfits, not old produce. It’s coming straight from growers, it’s good-quality, and we have eight to 10 touch points before the produce even makes it to the box. It’s possible some things go bad in the box, because there are things we can’t control like weather, but it’s pretty rare that things will arrive rotten to customers.

Did this country always dislike food that didn’t look nice?

No, but it definitely has become a thing. Some people shop at farmers market, but most primarily buy produce from grocery store shelves. These are retail stores at the end of the day, and they have to be designed in a way that’s attractive, in order to drive people in. So you walk in and you see perfect triangles of oranges, and squash shaped perfectly. Historically, grocery stores haven’t wanted to stock anything that isn’t attractive, and so people have gotten used to produce looking a certain way.

We started with a few local farms near Philly, and the network has really grown because they are recommending us to their friends. They are excited to work with us because it’s a new stream of income, and we are also selling product that they didn’t have an avenue to get rid of previously.

Aren’t you guys taking away food that would otherwise be going to charity and food banks?

That is actually a common misconception people have about this type of business. A very small percentage of commercial farms have the infrastructure to donate their misfits to food banks and soup kitchens. Those are not the ones we work with. But there are tens of thousands of other small to medium farms that don’t have that infrastructure.

There is a ton of costs associated with shipping — costs which are actually higher than the produce itself, and so they let it go bad instead of spending to get it to food banks. We see ourselves as the Robin Hood figure here. We’re the aggregator of food waste. We sell what we can and give customers a great value while giving farmers money. But there’s also a big chunk of the produce that we are donating because we’re investing in the pipeline between farms and food banks.

So you guys are skimming off the top to take the better stuff?

We’re not taking the better produce; we’re actually just picking out the produce that has a longer shelf life. We just got a huge shipment of eggplant, for example. They are all ugly, but some of them will last much longer, while others are very soft and will go bad very soon, probably in the next 24 to 48 hours. That’s what we would donate.

This is produce that food banks wouldn’t have access to otherwise. The same way farmers don’t have money to get it to food banks, food banks also aren’t going out to farmers to pick it up. We’re driving 400 miles, round-trip, to get the produce and bring it to our warehouse. We’ve created a pipeline for produce to get to food banks in western Pennsylvania that didn’t exist before, and we plan to create one in every major market we work in.

But it still feels to me like you’re first and foremost catering to well-off millennials on Instagram … like my friends, who want a deal, as opposed to food banks.

I understand how, when you initially think about those interested in reducing food waste, you think about wealthy folks who are privileged, and care about sustainability. But most of our customers are actually families that are cost-conscious, and we’re saving them money on groceries. Some also don’t have access to it currently. There’s about 30 million Americans that live in food deserts, which are urban areas that are a mile away from a supermarket. A part of our mission is to providing the access of produce to these people.

Well, one way we are is by shipping everywhere. You’ll notice that a lot of startups will target wealthy zip codes, or look for urban areas that are super-concentrated with millennials. But we ship to everywhere in the states we’re in, and that’s how we reach a lot of customers who need affordable produce the most. We also have a pilot program in the works that will allow us to accept SNAP payments.

Is opening this kind of business costly?

Yes. There is so much we’re putting into this, and there’s a ton of logistical hurdles that food has that perhaps other industries don’t. Shipping and receiving all kinds of produce costs [a lot of money], and then you have to deal with warehousing and cold storage in order to make sure the stuff doesn’t go bad, and there’s safety regulations for that too.

There’s this stereotype that people aren’t cooking as much today. Seamless is booming, and then you have all those meal kit services, which is like cooking for dummies. Why do you feel confident enough to start a produce company now?

That’s a good question. Like I said before, the trendy millennial customer who wants to experiment with the meal kit from Hello Fresh probably isn’t buying our boxes. It’s usually families in suburban or rural areas who cook seven nights a week and need access to more affordable groceries. Cooking is the more affordable thing to do, because eating out is a privilege.

I also want to mention, because I’m a millennial myself, that a lot of us are looking for ways to save money. And that means cooking your own meals. There’s been a big push to meal prep on Sunday nights, and cook our own food. So I do think there’s opportunity.

What other categories of food do you guys plan on moving into?

There is so much food that’s get wasted! Canned goods are going to be the obvious next point. Cans are packaged in a highly automated system, and so many of them get set aside because the labels are printed upside down, or mislabeled, or if there’s a tiny dent. Other produce with similar problems is rice, nuts, grains, things like that. If there’s any sort of color or aesthetic imperfection, it can’t be sold.

How else do you see Misfits expanding?

We want to be a national name when it comes to sustainability and food access. Right now, because we’re Philly-based, the primary company we’ve been donating food to is Philabundance. But we want to expand nationally, and quite possibly open soup kitchens and food banks of our own.

What do you want consumers to know about ugly produce?

Produce doesn’t have to always look a certain way. And just because it’s ugly doesn’t mean it’s rotten or tastes bad.