the energy and fertilizers needed to grow, process and distribute food are wasted.
At the other end of the supply chain are cash-strapped consumers, who have been distressed even more in recent years by factors such as the Covid-19 pandemic and inflation.
Spoiler Alert, a company founded by two MIT alumni, helps businesses bridge the gap between food waste and food insecurity with a platform connecting major food and beverage brands with discount grocers, retailers and non-profit organizations. The platform helps brands reduce or donate excess and short-term inventory days, weeks and months before it expires.
“There is a huge amount of underutilized data in the manufacturing and distribution space resulting in the waste of good food,” says Ricky Ashenfelter MBA ’15, who co-founded the company with Emily Malina MBA ’15 .
Spoiler Alert helps brands manage distressed inventory data, create offers for potential buyers, and review and accept offers. The platform is designed to work with businesses’ existing inventory and fulfillment systems, using automation and pricing intelligence to further streamline sales.
“At a high level, we are waste prevention software designed for sales and supply chain teams,” says Ashenfelter. “You can think of it as a [business-to-business] eBay in a way.
Spoiler Alert works with global companies like Nestlé, Kraft Heinz and Danone, as well as discount grocers like United Grocery Outlet and Misfits Market. These brands are already using the platform to reduce food waste and put more food on people’s tables.
“Project setting [a nonprofit working on climate solutions] has identified food waste as the number one priority to tackle the global climate crisis, so these types of business initiatives can be very powerful from an environmental perspective, ”said Ashenfelter, noting that the he nonprofit organization estimates that food waste accounts for 8 percent of global greenhouse gas emissions. . “Compare yourself to that with the increasing levels of food insecurity and the inability of people to access affordable food, and you start to see how tackling inefficient supply chain can have a impact. dramatic impact from an environmental and social point of view. This is what motivates us.
Untapped data for change
Ashenfelter came to MIT’s Sloan School of Management after several years in the field of sustainability software and management consulting in the retail and consumer products industries.
“I was really drawn to the transition to something a lot more entrepreneurial and to capitalize on not only Sloan’s focus on entrepreneurship, but also the focus MIT’s ecosystem placed on technology, entrepreneurship, clean tech innovation and other things on that front, ”he says.
Ashenfelter met Malina at one of Sloan’s admitted student events in 2013, and the founders quickly decided to use the data to reduce food waste.
“For us, the idea was clear: how to better leverage data to manage excess and short-term inventory? Said Ashenfelter. “The way we do things has evolved over the past six years, but it’s all rooted in solving a huge climate problem, solving a major food insecurity problem and, from a capitalist point of view, help businesses reduce costs and generate revenue from otherwise wasted products. “
The founders spent many hours at the Martin Trust Center for MIT Entrepreneurship with support from the Sloan Sustainability Initiative, and used Spoiler Alert as a case study in almost every course they took, with product development in mind, to sales, marketing, pricing, etc. their courses.
“We introduced our idea into just about every action learning course we could at Sloan and MIT,” says Ashenfelter.
They also participated in MIT’s $ 100,000 entrepreneurship competition and received support from the Venture Mentoring Service and the IDEAS Global Challenge program.
After graduation, the founders began to create a platform to make it easier to donate excess inventory, but quickly learned that large companies’ processes for discounting this inventory were also very manual. Today, over 90 percent of Spoiler Alert’s transaction volume is in storage, with the rest donated.
Different teams within an organization can upload excess inventory reports to the Spoiler Alert system, eliminating the need to manually aggregate data sets and prepare what the industry calls “blowout lists.” ” for sale. Spoiler Alert uses machine learning-based tools to help both parties with pricing and negotiations close deals faster.
“Companies are taking fairly manual and slow approaches to deciding [what to do with excess inventory]”Ashenfelter says.” And when you have slow decision making, you waste days or even weeks of shelf life on that product. It can be the difference between selling a product versus donating, and making a donation. compared to dumping. “
Once a deal has been made, Spoiler Alert automatically generates the forms and workflows necessary for fulfillment teams to release the product. The relationships that businesses build on the platform are also a major factor in reducing waste.
“We give suppliers the ability to monitor the arrival of their discounted and donated products,” says Ashenfelter. “This is really powerful because it allows these CPG brands to ensure that this product is, in many cases, available through affordable nutrition outlets in underserved communities.”
Ashenfelter says the majority of inventory goes to regional and national discount grocers, supplemented by significant purchases from local and non-profit grocery chains.
“Everything we do is aimed at helping sell as many products as possible to a set of reputable buyers at the most fair and equitable prices possible,” Ashenfelter said.
Scale for impact
The pandemic has disrupted many aspects of food supply chains. But Ashenfelter says he’s also accelerated the adoption of digital solutions that can better handle such volatility.
When Campbell first started using the Spoiler Alert system in 2019, for example, it saw a 36% increase in discounted sales and a 27% increase in donations in the first five months.
Ashenfelter says the results have proven that companies’ sustainability goals can go hand in hand with initiatives that improve their bottom line. In fact, because Spoiler Alert is so focused on the untapped revenue associated with food waste, many customers don’t even realize that Spoiler Alert is a sustainability company until they’ve signed on.
“What’s interesting about this program is that it becomes an incredibly powerful internal case study of how sustainability and operational results don’t conflict and can drive both business results and impact. global environmental impact, ”says Ashenfelter.
Going forward, Spoiler Alert will continue to develop algorithmic solutions that could further reduce waste internationally and across a broader product line.
“At every step of our process, we collect a huge amount of data on what sells and doesn’t sell, at what price, to which buyers, in which geographies and with what remaining shelf life,” says Ashenfelter. . “We’re only just beginning to scratch the surface of bringing our recommendation engine to life for our suppliers and buyers. Ultimately, our goal is to propel the economy without waste, and rooted in that, make better decisions faster, collaborating with a growing ecosystem of supply chain partners, and with the least amount of intervention. manual possible.