In April, I wrote about some exciting food sustainability startups coming out of Y Combinator in 2016 (that post also includes background on the world’s top startup incubator). As follow up, I reviewed YC’s 2017 Winter Demo Day to find out the latest in YC food system innovation. Of the 60+ startups that pitched during the two-day event, there were six that caught my attention as positive change agents in the food sector. Their solutions offer an interesting snapshot of the technologies and business models paving the future of our food system.
The trends that to 2016 were also at play with the 2017 food cohort: automation, sensors, predictive analytics, consumer convenience, and lean supply chain. Among the latest batch there seems to be even stronger emphasis on simplifying the supply chain to get as close as possible to direct to producer and consumer. As you’ll see below, this is an operating model that works in developing and developed economies alike and could go a long way to helping deliver a safer, better quality, and more cost effective food supply.
Cowlar brings the wearable technology revolution to agriculture, creating the ‘fitbit for cows’. By equipping cows with special collars that track body temperature and daily behavior changes, Cowlar helps dairy farmers more accurately prepare for a cow’s heat cycle. A farmer can identify faster when a cow is pregnant and thus ready to milk. It can also detect when a cow is sick or injured, allowing farmers to treat the livestock sooner. The founders hail from Pakistan and see the product technology particularly beneficial in developing countries where milk production cycles fall far below those in the US. The new data and ability to respond faster to a cow’s cycle will help dairy farmers increase yields and profits.
Movebutter is the Trader Joes of grocery delivery services. The startup grocer claims to achieve 40% margins in the notoriously low-margin grocery business by selling fewer items and working directly with top suppliers. Founder and CEO Chai Mishra noticed that with traditional grocers 80% of sales came from 20% of their product inventory, so he decided Movebutter would focus on just those 20% of grocery items while reducing the costs associated with overstocking. Suppliers package and ship from Movebutter distribution centers. Customers order online and then receive groceries at their doorstep in just a few days. This lean operating model expects in the process to also reduce food waste.
No Lean Season is a nonprofit startup that helps farmers earn money during the off-season. The idea is to reduce the risks and costs of seasonality to farm workers by providing a stipend covering travel and a few days of food and hospitality in a nearby city where they can find a temporary job. A successful transition to temporary employment in the city means a new income stream for these workers and helps to keep food on their families’ tables. A research team from Yale, the London School of Economics, the University of Sydney, and Innovations in Poverty Action studied the impact of such stipends in Bangladesh and found that with the aid of the stipend workers took the initial risk and went to urban areas to find employment. Moreover, the families of those that found off-season employment experienced increased caloric intake compared to those who didn’t. The program was started by Evidence Action as part of an accelerator that tests pilot interventions in developing countries.
Supr Daily wants to digitize India’s milk delivery system. The startup employs a direct-to-consumer subscription service that also cuts out the layers of middlemen to reduce costs and ensure a safer, higher quality product. Government reports have shown that some 68% of the country’s milk supply is deemed ‘tainted’. A common reason for this is that businesses sometimes water down milk products in order to increase their supply. To make up for any discoloration or flavor change, those same businesses add chemicals or additives. By working directly with the producers, Supr Daily ensures that none of its milk is altered. The company features a mobile app for faster ordering and communications. Currently, the company operates out of Mumbai but expects to expand to cover the entire city by the end of the year, before it moves to other cities. The platform will soon also add other products like butter and bread.
Trade is a marketplace startup working to eliminate the middleman and preserve greater revenue for the producer. While middlemen typically charge in the range of 50-70% of the sale of goods, Trade charges only 6%. The SMS platform provides market data and prices to farmers and sellers and then brings those parties together to complete transactions. The platform maintains user anonymity, includes a database with all relevant market data, and will also help enable transportation of the goods sold on the platform. The company is starting with five commodities in West Africa where it hopes it can revolutionize the economics of commodity trading.
Vinsight uses forecasting software and data analytics to help farmers better predict annual yields. Instead of developing and deploying its own expensive array of sensors and satellites, Vinsight takes advantage of the existing supply of relevant agriculture data. The company reviews and aggregates data from growers and government agencies (historical reporting, weather data, satellite imagery) and then analyzes that data to make accurate yield predictions and help farmers optimize their own forecasting. It then uses machine intelligence to further improve those predictions. Vinsight charges farmers $25 per acre to provide that level of insight and analysis. Currently, the startup boasts the world’s largest winery as a client.