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Good morning! It's Thursday, February 1st. Today, we’re unpacking Yume, a food redistribution platform that’s addressing global food waste and helping manufacturers recoup losses from excess inventory!

THE FEATURE

Yume: Turning Food Waste into Millions

Last year, an estimated one-third of the global food supply was wasted, adding up to $1.3B tons of food worth almost $1T!

Australian company Yume is addressing this issue and generating profits through its platform that's already redistributed 17.6M pounds of food!

So, What's the Business?

Katy Barfield found the inspiration behind Yume from owning and operating a bar in Melbourne. This was Barfield's first time in the food and hospitality industry, and she was shocked at the amount of unused ingredients thrown out each day. 

This realization sent her down a rabbit hole— if her small bar generated that much waste, what about the ~40,000 other restaurants across Australia?

However, food waste isn't just isolated to restaurants. 40% of Australian food waste occurs at the industrial level before it ever gets to distributors. 

Food manufacturers generally don't have sophisticated inventory management systems for clearances, and excess inventory only makes up 2% to 5% of total inventory. As a result, manufacturers can focus on other channels to boost revenue rather than addressing food waste. 

So, Barfield founded Yume to address this food manufacturing dilemma, selling her company as a viable way for the food industry to outsource their waste issues and recover costs. 

Yume's platform focuses on consumer packaged goods and helps manufacturers find resellers. Partnered manufacturers just have to identify excess inventory, upload it to the Yume platform, and wait to receive offers from interested buyers. For example, if a food manufacturer has a batch of mislabeled dairy products, a commercial kitchen may purchase them for use as raw ingredients. 

Before Yume, manufacturers looking to offload inventory would have to make phone calls to countess buyers. Yume's algorithm cuts out all the busy work and personalizes the process to the manufacturer's needs. To illustrate, if a manufacturer's goal is to clear out a warehouse, Yume will prioritize offers from high-volume buyers instead of those offering the best price. 

Manufacturers must pay a subscription fee to access Yume's platform, which varies depending on their excess inventory volume. For buyers, creating an account is free, but Yume charges a transaction fee on all purchases. 

Traction

Yume's client list includes big-name manufacturers like Kellogg's, Unilever, and Mars Food and Nutrition. These leading manufacturers have earned $22M from selling their surplus food on Yume. 

Kellogg's ANZ sales director reported selling 330K pounds of excess food within the first three months of using Yume and seeing substantial returns. Yume's utility isn't just reserved for big manufacturers. On average, Yume users sell 128% more excess food with a 150% return increase versus offloading inventory independently.

A few days ago, Yume secured $2M AUD in seed funding, bringing the startup's total funding to $7M. 

Key Observation

Yume's customers are primarily attracted to the platform to recoup losses on excess inventory, but that's not the only reason. 

With the advent of ESG scores and other societal impact metrics, manufacturers are looking for ways to bolster their standing in the public eye, and Yume helps them do that. 

Yume is classified as a climate tech startup, making the case that food waste is one of the largest contributors to greenhouse gas emissions. Additionally, Yume has partnered with Australia's four largest charities, making it easy to donate excess inventory that isn't selling on the platform. 

So, manufacturers that use Yume can address shareholders on how they are taking critical steps to address climate change and food insecurity, all while making money off excess inventory. A classic win-win situation. 

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