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More connections, less waste.


This is the Wunderfood business plan by Tony Gui, Matthew Ridenour, Uzair Ahmed and Franzi Sessler. It is the capstone project for the MBA in Design Strategy program at California College of the Arts, San Francisco. April 2016.


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We believe food shouldn’t be wasted. 5


Table of Contents

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003Executive Summary 011Company Overview Vision Mission Values Corporate Strategy Objectives Leardership Team

023The Challenge The Food Waste Problem What is Food Waste Food Waste Throughout the Supply Chain Produce: The Root of Food Waste The Customers

041Opportunity Market Trends Market Size Market Opportunity Learning Journey

053 This is Wunderfood The Wunderfood Experience Value Prop Business Model Canvas Strategic Partnerships Go to Market Financials Investor Ask Impact

089 Competitive Analysis Industry Overview Competitive Landscape SWOT Analysis Competitive Advantage

097 Design Corporate Identity Corporate Design

125 Closer Appendix

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Executive Summary 3


More connections, less waste.

Wunderfood is a surplus and imperfect food marketplace that connects farmers with food buyers

Vision

A world without food waste.

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Mission

Wunderfood’s mission is to significantly reduce food waste by creating more farmer to buyer connections. By doing so, we will:

Drive higher farmer and buyer profits Protect the environment Decrease food insecurity


Objectives

Leadership Team

Organizational Become a food waste innovation leader by year 5 Build a highly effective and world-class team and culture Help build food waste reduction movement

The Wunderteam is an international group of business and design rockstars passionate about solving real complex problems for the benefit of people and the planet. The Wunderteam is comprised of experienced entrepreneurs and social evangelist who believe business can be a force for good.

Economic

Franzi Sessler

›› Increase profit margin every year, achieving >50% by year 5

Matt Ridenour

›› Surpass $50 million in annual revenue by year 5

›› Secure an average transaction amount of $30,000 by year 2

Customer

›› Acquire >8,000 farmers and >300 food buyers by year 5 ›› Achieve a positive customer experience rating >4.8/5 by Year 3 ›› Increase farmer sales >$100k/ year by year 5

Creative Direction, Design Design Lead, DEO Strategic Partnerships & Sales, CMO Tony Gui

COO, Operations Lead Uzair Ahmed

CTO, CFO, Research

›› Decrease buyer costs >$500k/ year by year 5

Advisor Our strong diverse network spans from agricultural experts, business designers, CFO’s and operation gurus.

Social

›› Carl Fudge, Business Designer, IDEO

›› Facilitate >1 donated meals by year 5 ›› Increase access to affordable food for >500k people in need

Environmental

›› Divert >1 million pounds of food from the landfill by year 5 ›› Save >3 billion gallons / year of water by year 5 ›› Reduce GHG emissions by 100K tons by year 5

›› Shawn Ardaiz, Chief Innovation Officer, Culture Code ›› Maaike Doyer, CFO, Strategy Designer, Business Models Inc. ›› Caitlin Antle Wilson, Sales and Marketing Director, T&A Farms ›› Nolan Paul, R&D Strategy & Emerging Technologies, Driscoll’s ›› Brian Durkee, COO, Numi Organic Tea ›› Michael Fox, Silicon Valley Emissary, Global Corporate Venturing

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The Food Waste problem Economic The United States spends $218 billion per year growing, processing and transporting food that is never eaten. This adds up to 52.4 million tons of food sent to the landfill each year. On the farm alone, over 10 million tons of food is left unharvested and never goes eaten. Social With all this waste, we face a moral dilemma given that 1 in 7 people in the United States are food insecure. How is it that we are throwing away enough food to feed millions of people, and yet we still have millions in the U.S. (and around the world) living withouth knowing where their next meal will come from? Environmental If that wasn’t enough, food waste is the largest single contributor to GHG emissions in the United States. In fact, food that is never eaten consumes 21% of all fresh water, 18% of all cropland, and occupies 21% of the space in landfills.

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The Need

Farmers $15 Billion of food that is grown on the far do not make it to a hungry consumer resulting in food waste manifesting in 3 ways: ›› Surplus food - excess cosmetically perfect food due to unpredictable demand of the market ›› Imperfect food - cosmetically imperfect food that is too big, too small, blemished, or bent ›› Rejected orders - entire orders of packaged and harvested food rejected upon delivery by a food buyer

Large Scale food buyer The competitive food industry results in food buyers competing on price and quality. Buyers are constantly seeking ways to increase profit margins while providing high quality food, but are limited to:

›› Lack of Reliable Channels – limited channels for food buyers to purchase surplus or imperfect food ›› Consumer Demand – consumers perceive imperfect as unsafe

›› Delivery and Transportation Challenges – quick, reliable food delivery execution is a major challenge


The Opportunity

In the U.S alone, food uncaptured at the farm is a $15 Billion annually economic opportunity. The agriculture industry in the U.S is racing to capture value from technological innovation and discontinuities in food and agriculture. From 2004 to 2013, global food industry investment have grown threefold, to more than $100 billion. The shift in consumer demand for transparent and socially conscious food is increasing the desire for new food choices. The global food waste reduction movement is growing rapidly, as reference by the French government putting a ban on food waste at the retail level. New organizations such as ReFED and NRDC are launching campaigns to reduce food waste. The Rise of Imperfect Foods is bringing in entrepreneurship and changing corporate messaging. Farmers are looking to more efficiently utilize existing food resources to meet the increasing demand for crop yield. Farmers and food buyers have a desire to sell more of their food in order to increase sales and profits.

Wunderfood Business Concept Wunderfood is a digital marketplace that connects farmers with large scale food buyers who are seeking surplus and imperfect food. Currently in the U.S., channels for surplus foods are almost non-existent. Wunderfood seeks to create a simple, intuitive digital marketplace that makes selling and buying surplus foods a delight. Wunderfood offers:

›› B2B – generating large, recurring sales selling to businesses ›› Large Scale – Wunderfood facilitates high volume transactions. ›› Delivery – partnership with C.H. Robinson transportation means simple, on-demand delivery. ›› Flexible Pricing – allows the buyer to select a range of prices ›› Farmer & Buyer – friendly digital platform - an intuitive interface adapted to the needs of farmers and buyers ›› Visual Preview – farmers can instantly upload photos of food to align buyer expectations ›› Food Grade Selector – buyers choose what grade of food they are seeking ›› Free – farmers can upload “free” foods for donation ›› Food Inspection – food safety inspection can be selected as an option ›› Delivery Tracker – track the status of the order, communicate

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Go to market strategy Our strategy targets launching with large scale farmers and buyers in order to deliver quickly generate significant revenue, prove the model, and quickly become the market leader. Tanimura & Antle Farm is excited to partner together for our pilot program with 2 large scale food buyers. Wunderfood will build an MVP version of our platform. Next, we will onboard more farmers and buyers to grow the business. By month 6 we expect to hire a full time developer who will build the beta version of Wunderfood. We will scale and grow the business and expect to expand internationally in year 5.

Financial Overview Wunderfood will begin year 1 at a deficit and require investment to build and sustain the product and team. Once we are able to facilitate transactions, Wunderfood will generate significant revenue from a few large key accounts. We expect to gain profitability during Year 2, reaching $60 million in revenue in Year 5. 8

Our revenue is obtained by charging our buyers and farmers a transaction fee of 3% each, totally 6% per transaction.


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Company Overview 11


Vision A world without food waste.

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Mission Wunderfood’s mission is to significantly reduce food waste by creating more farmer to buyer connections. By doing so, we will: ›› Drive higher farmer and buyer profits ›› Protect the environment ›› Decrease food insecurity

Values Connectedness a sense of shared community among the Wunderfood community Customer-First always act in the interest of our customers Excellence everything we create will deliver the highest standards of professionalism Fun we have fun and it shows in our offerings Positive Impact every business decision will drive toward a more positive world Sustainability we drive for a more sustainable earth Transparency we are always fully transparent about our business operations

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Objectives Organizational ›› Become the industry leader in food waste by year 5

Corporate Strategy

›› Build a highly effective and world-class team and culture

Wunderfood will become B Corp Certified to ensure and be held accountable for the highest standards of social and environmental performance, public transparency, and legal accountability. Wunderfood’s initiatives are positioned to join the growing global movement of business as a vehicle for positive impact. Wunderfood is a social enterprise driven by the opportunity to generate benefits for all stakeholders, including staff, customers, investors, beneficiaries and the planet.

›› Surpass $50 million in annual revenue by year 5

Economic

›› Increase profit margin every year, achieving >50% by year 5 ›› Secure an average transaction amount of $30,000 by year 2

Customer

›› Acquire >8,000 farmers and >300 food buyers by year 5 ›› Achieve a positive customer experience rating >4.8/5 by Year 3 ›› Increase sales for farmers >$100k/year by year 5 ›› Decrease buyer costs >$500k/ year by year 5

Social

›› Facilitate >1 donated meals by year 5

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›› Increase access to affordable food for >500k food insecure people

Environmental

›› Divert >1 million pounds of food from the landfill by year 5 ›› Save >3 billion gallons / year of water by year 5 ›› Reduce GHG emissions by 100K tons by year 5


Meet the Wunderteam Leadership Team The Wunderteam (Wunderfood’s four founding partners) is an international group of business and design leaders. Our team sought one another out to engage in this effort during our fourth semester of the MBA in Design Strategy program at the California College of the Arts. Both as individuals and collectively, the Wunderteam is passionate about bringing creative solutions to complex social challenges. We care about people, the planet, and generating a healthy profit. We are similarly passionate about bringing meaningful change and innovation to the food and agriculture industry. We have experience as entrepreneurs, leaders in social ventures, educators, and designers.

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Franzi Sessler Franzi is a creative powerhouse shaking up the business and design world!

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As a former art director, Franzi has worked at a design agency in Munich with a broad client base including BMW, Alianz, Telegate and Airbus. Franzi left the business of design to start designing business! Doing just that, Franzi is a visual & strategy designer at Business Models Inc. where she helps organizations innovative new business models. Through design, Franzi has a talent for visually communicating new opportunities businesses may not have seen before. She has pushed organizations out of their comfort zones and has triggered breakthrough moments for companies such as Google and Nasa, startups and hackathon events. She is a seasoned and curious visual storyteller with a knack to “WOW” her audience. Her designer heart continues to beat for her most recent venture “Kreatives”: forming allstar cross-industry teams to solve messy problems. She was awarded a Fulbright scholarship during her MBA in Design Strategy at CCA, San Francisco. Franzi also holds a Bachelor of Arts in Mediadesign from Munich, Germany.

Team Role

Creative Director, Design Lead, DEO Professional Role

Visual & Strategy Designer at Business Models, Inc. ( +1 415 797 8473 * fsessler@cca.edu


Matt Ridenour Matt focuses on Business Strategy & Partnerships at IDEO. Matt designs strategies to grow and scale OpenIDEO’s global impact while developing key partnerships to support the business. Matt leads IDEO’s Accelerate program, a global effort using design thinking to tackle our biggest environmental challenges. Currently, Matt is becoming an expert in food waste as he leads the food waste innovation efforts for OpenIDEO’s Accelerate program, including launching a Food Waste Ditigal Lab. He has also managed open innovation challenges and has designed and built IDEO’s Fellowship program for Environmental Impact entrepreneurs. Prior to OpenIDEO, Matt worked in the Architecture industry– designing projects in the U.S., China, Singapore, and Kuwait. Matt also worked for a GreenTech startup, led design workshops for a VC firm, and mentored students as a Youth Director. Having visited 46 countries and building a medical clinic in Kenya, Matt thrives on international adventures. Matt will complete his MBA in Design Strategy at CCA in May 2016. He holds a degree in Architecture from Cal Poly, San Luis Obispo, and studied design in Denmark through University of Copenhagen.

Team Role:

Strategic Partnerships & Sales, CMO Professional Role:

Business Design & Strategy at IDEO ( +1 805 660 6288 * mridenour2@cca.edu


Tony Gui Tony is a multidisciplinary hustler, entrepreneur and designer.

Team Role:

COO (Operations Lead) Professional Role:

Business Development at fuseproject ( +1 778 288 1738 * zgui@cca.edu

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He currently works in business development at fuseproject, an award winning design studio in San Francisco and New York. Tony is also the founder and design strategist at Kreatives where he prototypes the business model of assembling teams to solve complex problems. Tony has extensive experience leading workshops for businesses and startups who are looking for new insights and actionable directions to push their business forward. Recent clients include Powerade, Red Hat Innovation Labs, NASA, and various number of startup hackathon events around the world. Tony receive a Fast Company Innovation by Design Award in 2015. In a past life, Tony founded Physio for the People in Vancouver, a Physical Therapy clinic designed specifically to create a better experience for patients. His love for challenging the traditional status quo triggered his move to San Francisco where he completed his MBA in Design Strategy at CCA. Tony received his Bachelors in Human Kinetics and Master’s of Physical Therapy from the University of British Columbia.


Uzair Ahmed Uzair is currently remotely managing a sports management firm called Sports Paddock co-founded by him in his hometown Bangalore, India. He is the CTO and Art Director of Sports Paddock and has built the company’s brand perspective and digital strategy from the ground up. Sports Paddock currently provides the only FIAFA standard soccer league to amateur athletes in South India and has had 3 successful leagues in the last 2 years. Prior to Sports Paddock, Uzair worked with a partnership that focused on providing strategic design and video solutions to its clients by using a network of independent professionals and resources. His roles were design management and business development. His passion for learning and interest in design brought Uzair to San Francisco for the MBA in Design Strategy program. Through the program, Uzair has found his calling in Design Research. Uzair brings with him a diverse background with a Bachelor in Computer Science and professional experiences in marketing, web development, video production, branding and business development.

Team Role:

CTO, CFO & Research Professional Role:

Manager at Sports Paddock, India ( +1 415 967 8434 * uahmed@cca.edu

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Advisors & Network*

*Thank you!


Carl Fudge

Business Designer IDEO

Shawn Ardaiz

Chief Innovation Officer Culture Code

Maaike Doyer

CFO, Strategy Designer Business Models Inc.

Caitlin Antle Wilson

Sales and Marketing Director T&A Farms

Nolan Paul

R&D Strategy & Emerging Technologies Driscoll’s

Brian Durkee

COO Numi Organic Tea

Michael Fox

Silicon Valley Emissary Global Corporate Venturing

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The Challenge 23


We have a

big 24

problem.


Food waste is everywhere, and it’s not going away. Food waste represents a significant problem economically, socially, and environmentally. Economic The United States spends $218 billion per year growing, processing and transporting food that is never eaten. This adds up to 52.4 million tons of food sent to the landfill each year. On the farm alone, over 10 million tons of food is left unharvested and never goes eaten.

Did you know: Food waste creates the biggest environmental impact on the globe “The global carbon footprint, excluding land use change, has been estimated at 3.3 Gtonnes of CO2 equivalent in 2007” – Food Wastage Footprint

Social With all this waste, we face a moral dilemma given that 1 in 7 people in the United States are food insecure. How is it that we are throwing away enough food to feed millions of people, and yet we still have millions in the U.S. (and around the world) living without knowing where their next meal will come from? Environmental If that wasn’t enough, food waste is the largest single contributor to GHG emissions in the United States. In fact, food that is never eaten consumes 21% of all fresh water, 18% of all cropland, and occupies 21% of the space in landfills.

We wunder: How might we significantly reduce food waste?

Food Waste


What is Food Waste?

Maybe it’s an image of a metal trash can overflowing with food, or the extra milk we throw out because it’s past it’s expiration date. Whatever it may be, we each have a picture of food waste in our head. Clear as that picture may feel, it can be challenging to categorize precisely what is “food waste”. Definitions are helpful to provide context and bringing clarity.

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According to the UN Food and Agriculture Organization (FAO): Food Loss - unintended loss of food during harvesting, post-harvest handling, processing and distribution. In order words, food that is spoiled before reaching the consumer. Food Waste - food that is lost at retail and consumption stages The USDA refers to food waste as “wasted food that occurs anywhere along the supply chain.”


For the purposes of our business, Wunderfood will define terms as: Food Waste

food that is grown and produced that goes uneaten Food Surplus

grade A (USDA classification) foods that are an excess supply Buyer Rejected

foods that reach the food buyer but are returned to the farmer, a sunk cost for the farmer Imperfect Food

foods labeled as sub-grade A (USDA classification) due to cosmetic abnormalities, but are perfectly healthy for human consumption Not-for-Consumption Did you know: “Standardised date labeling on packaging equates to approximately $29 billion of wasted consumer spending each year� - refed.com

foods that are unfit for human consumption but can be used as animal feed, biofuels, or compost

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Food Waste throughout the supply chain Food waste occurs at every stage of the supply chain. Farms: food loss occurs at the production level. Low market prices and high labor costs often make it uneconomical for farmers to harvest anything other than “perfect” foods. Strict USDA cosmetic standards keep imperfect-looking foods (oversized or bent) from being sold to retailers. Manufacturers: while this represents the lowest food loss in the supply chain, production line inefficiencies often occur. Additionally, as food is processed, the trimming of end products can lead to edible parts being discarded. Manufacturers have limited access to buying imperfect or surplus foods.

Consumer Facing Business (Grocery stores, restaurants, etc): customers have high standards for perceived food freshness and appearance. This leads to businesses overstocking and disposing of healthy, edible food. Food companies are reluctant to change their inventory and stocking practices because of the higher premiums they can command for their “perfect” foods, and also protect their brand identity. Consumers: consumers have come to expect that all foods appear perfect, and thus refuse to purchase foods that appear sub-optimal. Additionally, consumers underplan and over purchase food, creating enormous waste at home. Likewise, many families buy in bulk in order to save money, however food often goes uneaten. The lack of standardized expiration date labels often leads consumers to discard food prematurely. Finally, consumers often lack education on food safety and discard or disregard perfectly healthy, safe foods, perceiving them as unsafe.

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Farms

10M 16%

Manufacturers

t / year

1M 2%


Food Waste * by Weight Total 63 Million Tons / Year

*Vared, Sarah. A Roadmap to Reduce U.S. Food Waste by 20 Percent. Rep. N.p.: ReFED, 2016.

Farms 10M or 16% Manufacturer 1M or 2% Consumer Facing Businesses 25M or 40% Homes 27M or 43%

Values of Waste $218 Billion / Year Farms $15B Manufacturers $2B Consumer Facing Businesses $57B Homes $144B

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Consumer Facing Business

25M 40%

Homes

27M 43%


Fruits & Vegetables account for 42% of total food wasted in the united states. - refed.com

Produce: the root of food waste

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Food waste can be classified in two categories: perishables and nonperishables. Perishable foods account for 80% of the food waste including: meats, fruits and vegetables, seafood, milk and dairy. Perishables are often discarded because they are inexpensive and quickly spoil. Over 40% of total food waste is generated by fruits and vegetables since they are the least expensive and fastest spoiling food. In contrast, seafood and meats are the most expensive food categories and account for the least amount of waste. Non-perishable foods include pastas, canned goods and highly processed foods, each wasted at lower rates given their longer shelf lives.

At 40% of total food waste, we decided to launch Wunderfood with an initial focus on fruits and vegetables. By starting here, we can generate significant impact early on, and then build on our momentum to move into new markets and offerings. Once we prove the business model, Wunderfood will expand to all types of foods, building capacity to handle all types of food, reducing food waste on a large scale.


Our team dove into understanding three major questions:

Why? Why is produce being wasted at such an alarming rate? Who? Who are the major players in the agri-business ecosystem? How? How might we design creative solutions to solve the “why” of food waste for the “who” that are involved?

The Customers Significant primary and secondary research has led us to more clearly understanding the food ecosystem, and specifically the why, who and how of designing for food waste reduction.

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Farmers

Currently, $15 billion of food grown on U.S. farms does not arrive to the consumer. This represents a huge waste of economic and environmental resources for the farmer. While farmers want to make a profit on their sales, they also have a strong desire for consumers to eat their food, whether that means turning a profit or donating it. Farmers incur large (and growing) labor costs, preventing them from harvesting all the produce they’ve grown, leading to food waste manifesting in 3 ways:

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Surplus Food Often farmers are left with excess food due to the unpredictability of buyer demand. When farmers have surplus food, finding buyers in short notice is nearly impossible. Farms often make the effort to donate food, however, the cost of labor and delivery is a significant economic investment for the farmer. It can be economically more beneficial for farmers to discard significant amounts of surplus food.

Imperfect Produce Produce standards regulated by the USDA have strict policies for produce cosmetic appearance. Consumers expect fruit and produce to appear “perfect” and lack the incentive to purchase produce that appears less than perfect. This leads farmers to reject all fruit and produce that does not appear as “Grade A”, leaving millions of tons of waste on the farm. In additional, food distributors and grocery shops do not purchase produce that is too big, too small, or curved due to both shipping inefficiencies and consumer expectations.

Rejected Orders Food buyers often reject entire orders of fruit or vegetables if the standards don’t meet the strict expectations upon delivery. Food buyers will even reject food when they’ve over-ordered, in an attempt to lessen their loss. The farmer pays for rejected orders, resulting in a significant cost for resource, transportation, and labor and the opportunity cost of the sale.


Large Scale Farmer Persona 1

Caitlin Antle Wilson Part Owner Tanimura & Antle Farms (T&A) ›› Lives in Salinas, CA ›› Grew up on the farm ›› Wants everyone to experience the joy of eating fresh produce ›› Buyers include: Walmart, Costco, Dole

“I would love to sell all our excess produce, but if our current buyers don’t

demand it, we have to leave perfectly good produce in the field. Even worse, if

a buyer rejects an order, we have to pay for it and for the transportation back, so we dump it.”

Needs

›› Sell surplus and imperfect produce ›› Easily communicate with large buyer network ›› Coordinate all delivery automatically

“We already use software to coordinate sales, so using technology is easy for us.”

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Small Batch Farmer Persona 2

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“We often can’t sell all our fruits or vegetables. We just want people to eat and enjoy them. In fact, we often can’t even donate because we can’t easily notify food banks.” “I would love to be using more technology to help sell our product and make more money!”

Needs

Coy Roberts

Operations Director Heirloom Organic Farms

›› Increase income ›› Access more buyers ›› Simple, “anyone can use” tech solution

›› Hollister, California ›› Sustainable farming methods ›› Sell to wholesalers, produce distributors, restaurants ›› Family owned business ›› <20 employees ›› Believes all people should be able to eat organic ›› Loves farming, not the logistics of selling, business

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Food Buyers Food buyers include: processors, food management companies, industrial kitchens, restaurants, hotel management groups, wholesalers, schools, hospitals, corporate companies, jails, army, etc. Food buyers compete with one another on price and quality. If buyers can purchase from farmers at a lower cost, they have more flexibility for profit margins. Currently, because surplus and imperfect foods are largely unavailable, buyers are spending the maximum price because they purchase only “Grade A” food. Surplus and imperfect foods can offer buyers the same or higher nutritional quality at lower cost, but they are limited due to:

Lack of Reliable Channels

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Currently there are limited channels for food businesses to purchase surplus or imperfect foods. Given the very quick turn-around time required for selling and purchasing produce, sourcing and delivering excess is very challenging.

Consumer Demand Consumers expect fruit and produce to appear “perfect”, as a result food processors have less incentive to purchase produce that appears less than perfect. Interestingly, when a major supply shortage exists, food buyers are forced to purchase less than perfect foods, hoping that the consumers will still purchase sub-optimal produce.

Delivery and Transportation Challenges Time is of the essence. Sourcing and ensuring quick, reliable food delivery scheduling and execution is a major challenge.


Food Management Group Persona 3

Abigail

Food Buyer Compass Food Group ›› Hard working ›› Expects high quality on fast turnaround ›› Managing large, efficient team ›› Wants to explore purchasing imperfect and surplus produce to increase supply options and sources

“We begun sourcing through pilot version of an imperfect produce program because this is such a big need.” “Our biggest challenge is supply–I can’t get enough food!” 37

Needs

›› Meet Sustainability Goals ›› Source large quantity & variety of foods ›› Fast delivery turnaround


Food Processor Persona 4

“We would purchase 100% of our fruit and vegetables as imperfect if we could find a reliable source” “I don’t want to worry about delivery logistics”

Needs

›› Consistent, reliable delivery ›› Low cost ›› Large quantities of single item

Scott Operations Manager Evolution Foods ›› Cold-pressed juice and smoothie processor 38

›› Believes in bringing healthy vegetables as juices to the masses ›› Wants to do his part in reducing waste ›› Would like to purchase imperfect produce, if it were a reliable source


Farmers

Large Scale Farmer

Painpoints

Desired Experience

›› Lose sales from surplus & imperfect product

›› Instantly access surplus & imperfect food buyers

›› Lose money from rejected orders ›› Limited to current buyer network ›› Complex delivery coordination

Small Batch Farmer

Food Buyers

Food Management

Food Processor

›› Instantly access alternative food buyers & complete logistics ›› Instantly access massive network of buyers ›› Automatic transportation & delivery

›› Limited to small buyer network

›› Instantly access massive network of buyers

›› Produce goes unsold, time-sensitive

›› Instantly access food buyers

›› Not “tech savvy”

›› Farmer-friendly technology

›› Challenge to source & coordinate donations

›› Donation match

›› Need to meet lofty sustainability goals

›› Big sustainability solution

›› Securing enough supply for needs

›› Large food quantity & variety

›› Short deadlines

›› Fast delivery turnaround

›› No reliable channels for purchasing surplus / imperfect food

›› Reliable surplus and imperfect food channel

›› Current food costs too high

›› Ability to fulfill large quantities

›› Need large quantities of single item

›› Low purchasing cost


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Opportunity 41


Market Trends

waste as this represents their largest single economic loss. Consumers are increasingly open to purchasing food The global agriculture industry is waste diversion products. The global enormous. The major market trends that food waste reduction movement inform the need for Wunderfood: is growing rapidly, as referenced by the French government putting Agriculture Industry Growth a ban on food waste at the retail The global Food and agribusiness level. Additionally, the United States industry forms a $5 trillion global government has rolled out massive industry that is growing. By 2050, food waste reduction plan, seeking caloric demand will increase by 70 50% reduction by 2030. Just this year, percent. In the United States alone, the organizations focused on food waste agricultural sector represents an $835 like ReFED and NRDC have released billion annual industry and increases 4% comprehensive data and are launching year over year. sweeping consumer education campaigns around reducing food waste. These large In fact, investors are making increasingly opportunities reveal a gaping need for large bets in the food industry, â&#x20AC;&#x153;racing innovation and new business models. to capture value from technological innovation and discontinuities in food and agricultureâ&#x20AC;?(Lutz). From 2004 to 2013, global food industry investments have grown threefold, to more than $100 billion.

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Shifting Consumer Demand Consumers are increasingly interested in knowing the story behind their food. As consumers become more aware of business practices, many are demanding food companies have a robust sustainability and social mission beyond simply profit. Consumers are seeking a new relationship with their food, from organics, locally sourced foods, and meat-substitutes, characterized in massive efforts like the Slow Food Movement. Consumers are becoming more aware and rewarding companies who are willing to bring more sustainable practices into their company by becoming loyal customers. Food Waste 40% of food waste is wasted globally. This represents a major economic, environmental, and social loss. Food businesses are rushing to reduce their

As the population increases, farmers are increasingly running out of space for growing and running out of resources required to produce enough crop yield to meet demand.

Rise of Imperfect Foods As consumer awareness and concern for food waste grows, the demand for purchasing surplus and imperfect foods will grow significantly. Just in the past year, Food companies like Whole Foods and Bon AppĂŠtite Food Management have designed imperfect produce programs. Startups like Imperfect Produce and Full Harvest have recently begun to bring new business models to the imperfect and surplus food opportunity.


Bringing Silicon Valley to the Central Valley Inefficiencies in the supply chain demand a highly effective technological solution. The agriculture industry has traditionally been late adopters to tech trends, but now an increasing number of farmers and food buyers seek to embrace innovation. Farmers are becoming increasingly more technologically oriented, and are realizing they become obsolete if they are unable to adapt and utilize technology to improve their operations. Noticing this significant opportunity, there is a rapidly growing food waste tech movement toward agricultural innovation. Many working on the problem call it “bringing Silicon Valley to the Central Valley” – meaning bringing the technological innovation of California’s Silicon Valley to the heavily agricultural regions of the Central Valley. Organizations like Food+Tech Connect and IDEO’s Food Co-Lab are gaining significant momentum in agricultural innovation. Increasing Demand and Resources As the population increases, farmers are increasingly running out of space for growing and running out of resources required to produce enough crop yield to meet demand. Instead of using more land and resources to meet the increasing needs, there’s a massive opportunity to more efficiently utilize the existing food and resources that have already been produced.

Increasing Farmer and Buyer Desire Farmers have a desire to sell more of their food in order to increase sales and profits. They also have an innate desire for their crops to not be wasted, but to be utilized and enjoyed. Similarly, the primary point buyers compete on is price. Many buyers are realizing the best way to remain competitive is to increase the variety of products they purchase, giving them more flexibility in purchasing prices and allowing them to increase their sales and profits.

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Market Size In the U.S. alone, $15 Billion annually in economic opportunity is not captured due to food waste at the farm. This is from imperfect, surplus, unharvested and buyer rejected foods. Approximately 70% of this food is consumable, representing $10.5 Billion annually in potential sales. The 30% of food that is not for consumption can be used for animal feed, biofuels or compost and represents a $4.5 Billion annual opportunity. As Wunderfood has the opportunity to grow, we have the goal of expanding internationally. With 40% of $5 trillion annual global food being wasted, the overall market opportunity is enormous ($2 trillion).

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2.1 Million # of U.S. Food Buyers

29,300

USDA.gov

# of U.S. Farmers


$15B

Annual Food Waste Value in U.S.

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$10.5 B

Consumable

$ 4.5 B Not for consumption


Market Opportunity Given that the surplus and imperfect food market is almost not being touched currently, it represents a uniquely open space for business opportunity. The Wunderfood marketplace aims to capture 8% of this $15 billion market. 8% of this market represents $840 million in transactions taking place on Wunderfood annually. Wunderfood’s two-sided business model connects the farmer with the food buyer. We will charge each side 3% per transaction (6% total), resulting in over $50M annual revenue from our transaction model alone. We see other opportunities for additional revenue streams that we will explore in further detail.

46

“It’s all about the story. Messaging. Getting customers to care and connect on a heart level.” Fedele Bauccio CEO of Bon Appétit


Learning Journey Wunderfood’s initial MVP (minimal viable product) sought to provide those unable to visit the farmer’s market access to fresh food from local farmers. We learned that small batch farmers are unable to sell all their produce at Farmer’s Markets, leading to 25% of inventory going unsold. This surplus is either wasted or donated to food banks. This surplus is unable to be sold because there is a lack of additional effective sales channels for the farmers. We also learned that customers don’t have easy access to affordable high quality produce for the following reasons: farmer’s markets are held at limited and inconvenient times, markets are often too far from home, customers are unable to buy all their needs in one location and high quality produce at the supermarkets are expensive. We saw an opportunity to connect the farmers who are unable to sell all their produce at the farmer’s market to customers who don’t have easy access to affordable high quality produce. In the first iteration of Wunderfood, buyers purchase their farmer’s market goods on our virtual marketplace. A personal shopper (Wunderfoodie) is notified of the purchase, visits the market, assembles the order and delivers direct to the customer. This original Wunderfood experience was:

47


Joanna is at work and concerned that she is unable to buy her weekly groceries from the farmerâ&#x20AC;&#x2122;s market due to the limited hours.

Joanna hears about Wunderfood from her colleague and is intrigued. She tests out the service.

Joanna is impressed that she can purchase all her produce from the local farmerâ&#x20AC;&#x2122;s market

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Joanna chooses a delivery time and price that works for her schedule and budget


Our Wunderfoodie, Nick is notified of Joanna’s order

Joanna hears about Wunderfood from her colleague and is intrigued. She tests out the service.

Once the order is complete, Joanna receives an update. Nick confirms he is on his way to deliver Jonna’s order by bike.

Joanna receives her order and is delighted by the friendly service and that she is able to enjoy her order direct from the farmer’s market.

49


What we learned from this iteration In a two-sided business model we would need to scale up the volume and per transaction amount

›› Logistics pose a major challenge; driving up cost for the customer

›› In order for our business to be successful we would need a steady stream of customers, farmers and personal shoppers ›› The food delivery service space is highly competitive ›› The profit margins would be low and a challenge to scale

The Pivot

We realized we needed to change our business model but were uncertain where to move. We decided to pack up the car and take a team field trip down to Salinas to experience the farm firsthand. We were hoping for inspiration, and inspiration came!

The Ah-Ha Moment “If we can’t find a buyer immediately, we leave the produce in the field”. – Caitlin Antle Wilson, T&A Farms

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After learning more about the operations and pain points of large scale farms, we had an enlightening conversation with Caitlin Antle-Wilson, one of the owners of T&A Farm. Caitlin helped team Wunderfood understand how challenging the farming business is. They operate on an extreme supply and demand cycle, but predicting either beforehand is nearly impossible. A slight shift in weather can change an entire harvest, for example, making it unfit to be sold.

We learned that on-farm food waste occurs on a daily basis, and farmers are constantly searching for new channels to make sure their food is enjoyed, whether it’s through donation or for profit. The farm’s current strategy for surplus produce is to frantically call their current buyer network, hoping to salvage some of their investment. Often this method fails, and thus they are left with wasted food. Even finding the right food donation channel is challenging, so they most often till excess food back into the soil and count it as a loss. This current food waste system represents a big business, environmental, and social opportunity. These pain points became the inspiration to pivot focus Wunderfood on delivering for these deep needs.


Insights

Through all this research weâ&#x20AC;&#x2122;ve discovered a few very important insights:

Farmers want to sell all their food Buyers want flexibility in the grade and price of their purchases Currently no reliable channel for connecting these needs exists The solution will need to be: Fast Reliable Simple

If we can fix this: This is a massive economic, social, and environmental opportunity.

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52


This is Wunderfood 53


54


Wunderfood is a surplus & imperfect food marketplace that connects farmers with food buyers.

55


56


57

More connections, less waste.


58


Problem Currently, channels for businesses to access surplus and imperfect foods are limited. Positioning Wunderfood exists to provide farmers with a channel to sell, and buyers with a means to purchase surplus and imperfect produce. In doing so it delivers community, harmony, and justice. It delivers this through an interactive online marketplace with curated profiles, seamless transactions, and dynamic pricing. 59

Outcome Wunderfood significantly reduces food waste from the farmer to the food buyer.


Scenario 1 Current System: Farmers frantically call the few buyers they work directly with to try to sell excess produce. If they donâ&#x20AC;&#x2122;t sell, it goes to waste. Wunderfood: Send out the information

to hundreds of potential buyers immediately, find a match, and make the transaction seamlessly.

Scenario 2

Current System: Buyers are unable to source enough food for their business. They call their usual suppliers but are unable to get it. Wunderfood: Post a request that

immediately alerts thousands of farmers. Find a match who has discounted imperfect produce, saving money. Seamlessly integrate delivery.

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Food Buyer Food Processor Rick Gonzales, Partner and Buyer at Greenfoods, Inc.

Rick is a food buyer who is looking for a large order of Broccoli for his business, he doesnâ&#x20AC;&#x2122;t care if the produce is imperfect or surplus, since he will be processing it anyways. He is shopping on competitive price, quality, and safety.

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Rick logs into Wunderfood and browses through the selection of available produce.


Rick can filter his search to localize the farmers he wishes to purchase from in order to reduce food miles and simplify logistics.

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Unable to find his specific wants, Rick sends out a request for the amount of Broccoli he is looking for.


Wunderfood notifies Rick to confirm his request details.

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Rickâ&#x20AC;&#x2122;s dashboard shows all previous transactions including his most recent request.


Farmer

Small Batch Farmer Maria McAlister

Owner of Broccoli & Co Farms

Farmer Maria visits wunderfood.com

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Maria browses the â&#x20AC;&#x153;want to buyâ&#x20AC;? market place to see if she is able to meet any of the demands from the buyers.


Maria sends out a message to the buying community about the surplus broccoli she has on the farm. She creates a new listing based on the type of product, the price, the location, and contact information.

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Wunderfood asks Maria to confirm.


Maria has a buyer! Rick from Greenfoods Inc has requested her Broccoli. On her dashboard she can manage all her orders and listings. Maria can also track how much she contributed to the initiative of reducing food waste.

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Significantly reduce food waste Increase farmer sales Decrease buyer costs Reduce environmental emissions 72

Decrease food insecurity


Value Prop 73


Key Partnerships

Key Activities

›› Transportation & Cargo Companies

›› Software Development

›› Government Agencies

›› Customer Service

›› Food Banks

›› Exploring Growth Opportunities

BMC

›› Food Educators

›› Marketing

›› Food Waste Organizations ›› Volunteer Organizations

Cost Structure

74

›› Platform ›› People ›› Office ›› Marketing

Key Resources ›› Developers ›› Strategists ›› Software ›› Marketers ›› Business Developers


Value Proposition

Customer Relationship

Customer Segments

Significantly reduce food waste

›› Personalized self-serive

Farmers

›› Customer Service ›› Wunderfood Subscription

Increase farmer sales

Small Batch Farmers Large Scale Farmers

Decrease buyer costs

Channels ›› Web-based platform

Reduce environmental emissions

›› App ›› Social Media, Forums, Blogs.

Food Buyers

Food Management Groups Food Processors

Decrease food insecurity

Revenue Streams ›› % of the transaction (surplus) ›› % of the transaction (imperfect) ›› Subscription model

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Strategic Partnerships Mutually beneficial strategic partnerships will be crucial for Wunderfood as we seek to scale and deliver value for our customers.

76


Transportation Of utmost importance is our partnership with C.H. Robinson. C.H. Robinson is one of the worldâ&#x20AC;&#x2122;s largest logistics providers, with 2015 gross revenues of $13.5 billion. They provide freight transportation and logistics, outsource solutions, produce sourcing, and information services to 110,000 customers across the world. C.H. Robinson has agreed to provide delivery and transportation services for all Wunderfood orders. Given the size and breadth of their operation, they are able to provide same-day pickup for orders and deliver across the nation in refrigerated trucks. They have agreed to a profit-sharing model with Wunderfood on a per-transaction basis. C.H. Robinson has provided quotes for potential delivery routes so that we can provide these for our customers. As an example:

Food Educators Partnering with food education programs like the Green Education Program will allow us to help educate consumers, school children, etc. about food waste reduction Food Waste Organizations Organizations like ReFED and the Food Waste Reduction Alliance will provide Wunderfood with the opportunity to connect with a coalition of large scale agri-business changemakers and also get connected with other potential customers. Volunteer Organizations Organizations that provide bring together talent to volunteer with purpose-driven organizations like Code for America or Net Impact could bring significant value to Wunderfoodâ&#x20AC;&#x2122;s culture and reach.

Salinas to San Francisco $650.00 Salinas to Denver, Colorado $3,200.00 Salinas to New York City $6,400.00 Food transportation with companies like C.H.Robinson provides significant value for us and for our customers, by providing the pickup, logistics and delivery from the farm to the buyer. Government Agencies Partnering with government agencies like USDA will enable us to help us advocate for change at a national level and help push forward food waste reform Food Banks Food banks and food donation programs represent a very important segment for delivering on our mission of reducing food waste and food insecurity.

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Go to market Wunderfood will begin small, but will scale quickly. Our strategy targets launching with large scale farmers and buyers in order to deliver quickly generate significant revenue, prove the model, and quickly become the market leader. Tanimura & Antle Farm is excited to partner together for our pilot program. Given the size of T&Aâ&#x20AC;&#x2122;s current operations ($40-50 million/year), we will quickly be able to partner with large scale food buyers to understand their needs. We will invite two food buyers as our test market: one processor, Evolution Foods, and one food management company, Compass Food Group. Wunderfood will build an MVP version of our platform and complete transactions between the farmer and the buyers. To fulfill delivery, C.H. Robinson transportation will deliver all Wunderfood orders from farmer to buyer. We will engage in extensive customer research, including requesting daily feedback summaries and a weekly in-depth research survey. We will perform ethnographic research by embedding ourselves in the field with the farmer, buyers, and delivery partner. We will build the product to where it is a functioning MVP, capable of facilitating transactions. 78

Next, we will onboard more farmers and buyers to grow the business. By month 6 we expect to hire a full time developer who will build the beta version of Wunderfood. We will scale and grow the business and expect to expand internationally in year 5. The ongoing development and trajectory is outlined below in the 5-year plan, which illustrates our vision and how we will execute on this growth.

Customers

Product

Media Strategy

Engagement

People Plan

Key Barriers

De-Risking


YEAR 1

YEAR 1

YEAR 2

YEAR3

YEAR4

YEAR 5

›› Launch w/ T&A Farm

›› Onboard farmers (15)

›› Grow farmer (350)

›› Scale farmer (1,200)

›› Scale farmer (3,600)

›› Scale farmer (8,200)

›› 2 buyers: 1 processor, 1 management

›› Reliable buyers (4)

›› Grow buyer (60)

›› Scale buyer (140)

›› Scale buyer (240)

›› Scale buyer (320)

›› Design MVP

›› Wunderfood Beta

›› Wunderfood V1 Launch

›› Wunderfood V2

›› Wunderfood V3

›› Build, test

›› Desktop

›› Desktop & Mobile

›› Continuous improvement

›› Wunderfood V4: Global + international

(Month 0-6)

›› Test

(Month 6-12)

›› Integrated w/ transportation software ›› Stealth mode

›› Word of mouth

›› Hands-on, high touch

›› Major ag & tech industry press

›› Keynote conference

›› Keynote conference

›› Develop Social Media

›› Social Media Community

›› Major news outlets

›› Major international news outlets

›› Email newsletter

›› Blog articles

›› TV & Wunderfood TV Launch

›› TV

›› Customer service team ›› Discounts every 10 transactions

›› Founding Team

›› Developer

››

›› Launch Press Release

›› Presentations

›› Direct face-to-face relationship

›› Integrated w/ Sales software

›› Sales ›› Marketing ›› Customer Service

›› Video series

›› Event series

›› Thought leadership ›› Global events

›› Launch digital Wunderfood community

›› Long term customer discounts

›› Dedicated customer growth and service team

›› Development team Design

›› Design team

›› Global Development Team

›› Sales Team

›› Operations Team

›› Marketing Team

›› HR

›› Operations

›› Legal

›› Global Customer Service team ›› HR team

›› HR ›› Customer Service Team ›› Time constraints

›› Labor

›› Stealth mode

›› Supply / Demand

›› Thorough customer testing

›› Transaction testing, different environments

›› Customer growth / adoption

›› Customer growth / retention

›› Scaling & maintaining growth

›› International expansion into key markets

›› Regulations

›› Competition

›› Extensive customer interviews

›› Robust sales / customer pipeline

›› Sales / customer pipeline

›› Innovative service offering

›› Develop product to customer needs

›› Testing in key markets, pilot in many markets, launch in few.

›› Seek protection through farmer insurance


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$


Financials Wunderfood’s financial outlook is bright due to a few key factors: ›› We are launching with large customers from the outset ›› We are entering a large and growing industry ›› We have identified great desire and need for this service ›› We currently have no major competitors

These key areas position us for success. Wunderfood will begin year 1 at a deficit and require investment to build and sustain the product and team. Once we are able to facilitate transactions, Wunderfood will generate significant revenue, from a few large key accounts. We expect to gain profitability during Year 2, reaching $60 million in revenue in Year 5. We expect to lead the food innovation industry and continue a sustainable and healthy growth trajectory for years to come.

Assumptions Growth We expect that Wunderfood will consist of its core team members for our launch, but will make our first strategic hire in a CTO developer who will build and manage the Wunderfood platform. As we grow our revenue, we assume that

we will add team members as needed in order to deliver on our growth projections. This will include hiring individuals that eventually become teams focused on: development, design, sales, customer service, marketing, HR, operations and legal. We assume that we will grow at a steady rate, up to a team of >40 in year 5. Revenue Structure Our revenue is purely based on fixed rate transaction fees for a two-sided business model. We are assuming a 3% per transaction fee for both the farmer and buyer, totaling at 6% per transaction. This is significantly lower than Uber, which charges 20% or Airbnb at up to 12%. This may mean that we can charge a larger transaction fee, but we are intentionally keeping the price low in order to encourage mass adoption and to deliver on our mission of supporting the farmers and buyers by increasing their profits. Since we are the channel and do not sell the inventory, our COGS are zero. For transactions, we have assumed $30,000 (average price of two truck loads of produce discounted 25% below Grade A produce). This generates $1,800 in revenue for Wunderfood per transaction. We assume that each buyer will complete 2 transactions per month the first year, and expect to increase to 8 transactions per month before year 5. Other Tax Rate: 35% State Tax Rate: 8.89% Market Expense: 10% of Revenue Avg Salary per employee: $ 85,000 /-

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Administrative Year 1

Year 2

Year 3

Year 4

Year 5

Managing partners

4

4

4

5

5

Developers

1

1

2

3

4

Sales

0

1

3

5

6

Customer Service

0

4

6

8

12

Marketing

0

2

3

4

5

HR

0

1

2

2

3

Design

0

0

1

2

3

Operations

0

0

1

2

3

Legal

0

0

0

0

1

Total Headcount

5

13

22

31

42

Salary

$425,000

$1,105,000

$1,870,000

$2,635,000

$3,570,000

Office + Equipment Cost

$12,500

$32,500

$55,500

$77,500

$105,000

Year 1

Year 2

Year 3

Year 4

Year 5

Farmers

15

350

1200

3600

8200*

Buyer

4

60

140

240

350**

# of Transactions/month

2

4

6

8

8

$ per Transaction***

$30,000

$30,000

$30,000

$30,000

$30,000

Yearly Transaction value

$2,880,000

$7,200,000

$25,200,000

$57,600,000

1,008,000,000

Wunderfood Revenue****

$172,800

$5,184,000

$18,144,000

$41,472,000

$60,480,000

Revenue Streams

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*

8,200 represents 0.5% of the 2.1 Million Farms in the U.S.

** ***

350 represents 1.2% of the 29,300 Food Buyers in the U.S. $30,000 per transaction is approx. amount of 2 truckloads of imperfect produce

**** Wunderfood revenue = 6% of overall transaction value


Income Statement %

Year 1

Year 2

Year 3

Year 4

Year 5

Sales

$172,800

$5,184,000

$18,144,000

$41,472,000

$60,480,000

COGS

0

0

0

0

0

Gross Profit

172,800

$5,184,000

$18,144,000

$41,472,000

$60,480,000

Office

(12,500)

(32,500)

(55,000)

(77,500)

(105,000)

Marketing

(17,280)

(518,400)

(1,814,400)

(4,147,200)

(6,048,000)

Salaries

(425,000)

(1,105,000)

(1,870,000)

(2,635,000)

(3,570,000)

Web hosting

(3,000)

(3,000)

(3,000)

(3,000)

(3,000)

Total Expenses

(457,780)

(1,658,900)

(3,742,400)

(6,862,700)

(9,726,000)

Depreciation

0

0

0

0

0

Amortization

0

0

0

0

0

Total Operating Expenses

(457,780)

(1,658,900)

(3,742,400)

(6,862,700)

(9,726,000)

Operating Income

(284,980)

3,525,100

14,401,600

34,609,300

50,754,000

Operating %

-164,92%

68.00%

79.37%

83.45%

83.92%

EBIDTA

(284,980)

3,525,100

14,401,600

34,609,300

50,754,000

Interest Expense

0

0

0

0

0

Interest Income

0

0

0

0

0

EBT

(284,980)

3,525,100

14,401,600

34,609,300

50,754,000

% of Revenues

-164.92%

68.00%

79.37%

83.45%

83.92%

Tax Expense

0

(1,545,404)

(6,313,661)

(15,172,717)

(22,250,554)

Net Income

-$284,980

$1,979,696

$8,087,939

$19,436,583

$28,503,446

% of Revenues

-164.92%

38.19%

44.58%

46.87%

47.13%

Operating Expenses

*COGS is 0 because Wunderfood does not manage the money transaction between the farmer and the buyers. We charge a service fee of 6% on the transaction amount.

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Year 1

Year 2

Year 3

Year 4

Year 5

Revenue

$0.17

$5.18

$18.14

$41.47

$60.48

Expenses

$0.46

$3.20

$10.06

$22.02

$31.98

$70.00 $60.00

Revenue Expenses

$50.00 $40.00

$30.00 $20.00 $10.00

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$0.00

Year 1

Year 2

Year 3

Year 4

Year 5


Investor Ask Wunderfood anticipates scaling quickly. In order to best position ourselves to fully invest ourselves in building this business, we are currently seeking $500k in seed funding. The funding will be used to cover our startup, operational, and marketing expenses for the first year, particularly hiring a CTO. We are interested in partnering with like-minded investors who are passionate about the mission and vision of Wunderfood. We would like any investor to bring a deep expertise in technology, and specifically in ag-tech. We are seeking a world-class developer who will join as our CTO. The developer must be able to quickly jump in and help us scale. This person will need to believe in the mission and vision of Wunderfood and have a demonstrated body of work aligned with the needs of Wunderfood. Joining us as an investor or employee at Wunderfood provides the benefit of participating in the launch and growth of a high impact social enterprise alongside a dedicated, passionate, and FUN team!

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Impact Wunderfood drives huge impact The greater the challenge, the greater the potential for impact. When Wunderfood reaches year 5, it will continue to provide significant social, environmental, and economic bene

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Food Waste Movement Leader Become a food waste innovation leader Help build food waste reduction movement Economic Increase farmer sales >$100k/year by year 5 Decrease buyer costs >$500k/year by year 5 Social Facilitate >1 million donated meals by year 5 Increase access to affordable food for >500k people in need Environmental Divert >1 million pounds of food from the landfill by year 5 Save >3 billion gallons / year of water by year 5 Reduce GHG emissions by 100K tons by year 5

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88


Competitive Analysis 89


Industry Overview

90


For years, consumers have expected, and only been able to purchase, cosmetically perfect foods from food retailers. Recently, many organizations have surfaced to give the ‘ugly’ produce a second chance and to educate the consumers about their food choices and purchasing behaviors. The most dramatic initiative to prevent food waste has been championed by France, who has made instituted a regulatory ban on for supermarkets in the country to throw food into the landfill. In addition, many documentaries, talks, and authors are advocating for ugly produce.

The need for a reliable channel for bringing surplus and imperfect food to the food buyer is immense. Many companies struggle with the logistics of food delivery as the single minimum orders from a B2C strategy may not meet the needs to generate enough profit. We believe Wunderfood is uniquely positioned to transact high volumes of surplus and imperfect food from the farmers to the food processors/ companies.

While the food waste reduction movement is growing rapidly, businesses are still trying to play catchup. In the U.S., we are slowly seeing the adoption of ugly produce as startups such as Imperfect Produce are reclaiming the cosmetically imperfect produce and offering CSA box deliveries. Imperfect Produce’s presence has caught the attention of big box grocers such as Whole Foods who are prototyping an imperfect produce section as one of their offerings. Likewise, Walmart plans to join the imperfect produce movement, while the former president of Trader Joe’s has opened Daily Table, a grocery store selling surplus and aging food at a value cost.

91


Competitive Landscape Perfect

Traditional Retailers

Traditional Retailers

›› Grocers (Safeway, Costco)

›› Distributers (Sysko, Bi-Rite)

Replace and make obsolete

›› Food Service (Bon Appétite Management)

›› Wholesalers (C&S, United Natural Foods)

Convert to customer

›› Restaurants (Chipotle) B2C

B2B

Imperfect to Consumer

Imperfect to Business

›› Misfits Produce ›› Imperfect Produce

›› Programs (Whole Foods, Imperfectly Delicious)

›› Hungry Harvest

›› Full Harvest

Imperfect

Most direct competitor, in stealth mode


The imperfect and surplus industry is a recently emerging industry. The four quadrants of the competitive landscape canvas include: Perfect / B2C Businesses selling perfect produce exclusively to consumers only are traditional retail models. These include grocery stores, supermarkets, institutional and restaurants. Wunderfood is not competing with these directly, but could be as these businesses seek to gain B2B market share. Wunderfood can capture market opportunity from them by moving into to the B2C space as well, offering a direct-to-consumer channel. Perfect / B2B Businesses selling perfect produce exclusively to businesses are traditional food distributor models. These include distributors like Sysko and Wholesalers like C&S. Wunderfood is not competing with these directly. That said, Wunderfood does compete with the distributor since it cuts out the distributor, connecting the farmer directly with the food buyer. If traditional food distributors were to open a “sub-grade” program (like the Imperfectly Delicious Program), then we would become competitors. Wholesalers are not competition, in fact they are potential Wunderfood customers as resellers of imperfect food. Wunderfood can capture market opportunity from them cutting out the food distributors from the supply chain and bringing on wholesalers as customers. Imperfect / B2C Businesses selling imperfect produce exclusively to consumers. These include Imperfect Produce, Hungry Harvest, and C.H. Robinson’s current “Misfit Produce” pilot program being rolled out with grocers.

Wunderfood is not competing with these directly, but could be if these businesses seek to gain B2B market share. Wunderfood can capture market opportunity from them by moving into to the B2C space as well, offering a direct-to-consumer channel. Imperfect / B2B Wunderfood’s direct competitors. Businesses selling imperfect produce exclusively to businesses. These include programs like Whole Food’s upcoming launch with Imperfect Produce and Bon Appétite Management’s “Imperfectly Delicious Program”. Wunderfood is not directly competing with these programs, as they are more retail-facing, both brand new, exclusive, not an open source opportunity for farmers and buyers, and not an integrated digital platform. Our most direct competition is Full Harvest, the only entirely digital B2B imperfect and surplus food platform. Full Harvest is still in stealth mode and is yet to launch. By moving quickly, we can scale up to surpass Full Harvest through our partnership with T&A farms.

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SWOT Strength

Weakness

›› Human-Centered Design team approach

›› Lack of team business & technology experience

›› Visual design

›› Lack of agriculture domain expertise & connections

›› Located in SF, technology capital ›› Innovative business model

Opportunity

›› Large potential market, emerging

›› Farms go direct to buyers (cut WF out)

›› Big social need

›› Competition (Imperfect, Full Harvest)

›› Growing trend & increasing demand ›› Government commitment to reducing waste

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Threat

›› Regulatory Issues ›› Labor challenges

›› Small amount of competition

›› Lack of buyer interest

›› Connections in food innovation industry

›��� Lack of farmer engagement

›› T&A farm customer pilot project

›› Food safety damaged reputation

›› C.H.Robinson transportation

›› Technology doesn’t work ›› No funding


Competitive Advantage Wunderfood offers distinct competitive advantages, as outlined above in the Competitive Landscape. Much of the competition is either focused on perfect produce only, or imperfect direct to consumer. The only direct competitor may Full Harvest, a B2B business model for surplus food are still in stealth / beta mode. Given that this is the only direct competition, we are confident that Wunderfood is entering this vast and growing market at the right time. Competitive advantages include: B2B Nearly all imperfect produce business models are currently focused on delivery to consumer. We have a distinct advantage in generating large, recurring sales from businesses This enables Wunderfood to maximize profit and grow quickly, with just a few customers. Large Scale Wunderfood is strategically positioned to connect farmers with food buyers and facilitate surplus and imperfect high volume transactions. Delivery Wunderfoodâ&#x20AC;&#x2122;s partnership with C.H. Robinson transportation allows us to solve a big pain point for both the farmer and buyer: simple, on-demand delivery. Flexible Pricing Allows the buyer to select a range of prices they might pay for a particular quantity of food.

Farmer & Buyer-Friendly Digital Platform An intuitive interface adapted to the needs of farmers and buyers, allowing them to easily connect, communicate, and facilitate transactions Visual Preview Farmers can instantly upload photos of their produce to the platform. This allows farmers to more easily show the quality of their product, aligning expectations with the buyer, enabling more accurate price negotiation, and encouraging less rejected orders. Food Grade Selector Buyers choose what grade of food they are searching for. Free Farmers can upload â&#x20AC;&#x153;freeâ&#x20AC;? foods for donation. Wunderfood does not charge for donations, offering this as a step toward our social mission. Food Inspection Wunderfood only works with health safety certified farms. If a food safety inspection is required, this can be selected as an option, notifying a local food safety team. This is a very important service option for most buyers. Delivery Tracker Allowing both farmer and buyers to track the status of the order and communicate effortlessly with one another and the delivery driver.

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Design 97


Corporate Identity The team conducted internal design reasearch.

Here is s the outcome.

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Loud Colorful

Silent Black & White

Orange

Purple

Winter

Fall

Spring

Summer

Pineapple

Eggplant

Lemon

Ginger

Rabbit

Tiger

Child

Teenager

Salsa

Ketchup

Tesla

Google Car

Red Cross

Science Museum

Circle

Square

Farm

Urban

Green

Red

Plastic

Aluminum

Peppermint Tea

Red Wine

Book

Ipad

Solid

Pattern

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If Wunderfood was a celebrity, who would it be?


Jamie Oliver He’s hip, he’s relevant, he’s charismatic and fun. He’s empathetic, compassionate, and cares a ton about FOOD. He’s food-oriented without being a “super farmer” -- off the grid, dusty, dirty hands… he’s still got style and you could go get a drink with the guy. He’s inclusive and immediately draws people in with his life and vibrancy. He cares about farming but isn’t off isolated as a poor backwoods farmer detached from the world – he’s connected with the people!

David Hasselhoff David Hasselhoff – because he brings a lot of wonder to women. There is a magical feeling.

Not Kim Kardashian. Wunderfood is not concerned about it’s own image but rather reaches to enhance it’s customers’ brand and exposure. The Fresh Prince of Bel Air He mixes up the “business as usual” within a “minority” demographic in a fun, unique, fierce, smart but humble way.

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Associations

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Corporate Design The look and feel of the wunderfood evolved over a process of 5 months.

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Early Sketches


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Smudger Smudger (ITC) is a casual script-font designed by Andrew Smith in 1994. The imperfect font looks like a quick, handwritten note. It represents a manual receipt one could find at a market place. Every letter stands for itself which also represents the diversity of products offered.

Avenir LT, Heavy Avenir is a geometric sans-serif typeface designed by Adrian Frutiger in 1988. He described Avenir as a geometric sans serif with a human touch. The heavy cut set in high caps emphasizes the constructed mechanical look and feel of the font. It represents the technical side of Wunderfood’s virtual market place. Avenir also means “future” in french.

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X

2X

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Swiss chard seakale pumpkin onion chickpea gram corn pea. Brussels sprout coriander? Display Font Smudger, 80 / 82

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Beetroot Carrot spinach okra. Beetroot Carrot spinach okra. Beetroot Carrot spinach okra chestnut rice.

Headline 1 Avenir LT, Heavy 85, 36 / 36

Headline 2 Avenir LT, Heavy 85, 24 / 24

Headline 3 Avenir LT, Heavy 85, 11 / 13

Turnip greens yarrow ricebean rutabaga endive cauliflower sea lettuce kohlrabi amaranth water spinach avocado daikon napa cabbage asparagus winter purslane kale. Celery potato scallion desert raisin horseradish spinach carrot soko. Lotus root water spinach fennel kombu maize bamboo shoot green bean swiss chard seakale pumpkin onion chickpea gram corn pea. Brussels sprout coriander water chestnut gourd swiss chard wakame kohlrabi beetroot carrot watercress. Corn amaranth salsify bunya nuts nori azuki bean chickweed potato bell pepper artichoke.

Body Sabon LT, Light, 11 / 13

Turnip greens yarrow ricebean rutabaga endive cauliflower sea lettuce kohlrabi amaranth water spinach avocado daikon napa cabbage asparagus winter purslane kale. Celery potato scallion desert raisin horseradish spinach carrot soko. Lotus root water spinach fennel kombu maize bamboo shoot green bean swiss chard seakale pumpkin onion chickpea gram corn pea. Brussels sprout coriander water chestnut gourd swiss chard wakame kohlrabi beetroot carrot watercress. Corn amaranth salsify bunya nuts nori azuki bean chickweed potato bell pepper artichoke.

Body Avenir LT, Light 35, 11 / 13

Highlight Avenir LT, Light 35, 11 / 13 , underlined

Highlight Sabon LT, Light, 11 / 13 , oblique

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#FFE600 R 255 G 230 B 0 2 4 99 0

#D3D3D3 R 61 G 261 B 61 68 61 60 49 114

#FFFFFF


#D6C58C R 214 G 197 B 140 17 18 52 0

#000000 CMYK 75 68 67 90

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Readability Test

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Wunderfood TV is a youtube channel or Netflix documentary series showcasing the global battle against food waste.

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We are thrilled you have joined us for our journey through Wunderfood! We are incredibly optimistic about the opportunity to build this not as just an organization, but as a movement. By bringing farmers, buyers, laborers, consumers, government, and everyone else into the conversation we can accomplish world-changing outcomes.

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By creatively solving this one problem, we gain a multitude of positive outcomes: driving better business, protecting the environment, and increasing food access for those who need it most. We look forward to continuing the journey and hope you will join us in growing this effort!

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Appendix Imperfect Produce

Imperfect produce delivers farm fresh produce in the form of CSA boxes to the consumers doorsteps. (imperfect + consumers)

Imperfectly Delicious Program

Partnered with Bon Appétite. Misfits Produce

C.H. Robinson’s program for imperfect produce. (Imperfect + B2B) Blue Apron

Delivery fresh produce to consumers in the form of pre set ingredients for consumers to cook their meals (perfect + consumers) Full Harvest

B2B platform connecting large farms to food businesses to sell surplus and imperfect produce. Still in beta stage. (imperfect + B2B) SF Produce

The San Francisco Market Corporation is to link the produce and food communities of SF and beyond, through the successful operation and development of the San Francisco Wholesale Produce Market. (perfect + B2B) Farmer’s Markets

The Heart of the City Farmer’s Market is a Celebrated non-profit outdoor market features a large selection of locally sourced produce & goods. (perfect + consumers)



Wunderfood Business Plan