Can AI save 1.6 billion tons of wasted food each year?

AI food waste

50% of the food produced globally is wasted. At the same time, a child dies from hunger every 10 seconds, and 25,000 people starve to death every single day. Another billion, almost, are malnourished and don’t have enough food.

Can AI fix this?

In this episode of TechFirst with John Koetsier, we chat with SPRK.Global CEO Alexander Piutti, who is a finalist in Samsung’s Extreme Tech Challenge startup competition.

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John Koetsier: Can AI save 1.6 billion tons of wasted food each year?

Welcome to TechFirst with John Koetsier.

A child dies of hunger every 10 seconds, and 25,000 people globally starve to death every day. Almost a billion people are malnourished around the entire planet, and yet 1.6 billion tons of food is wasted every single year.

Can AI fix this, is the question. To learn more, we’re going to chat with SPRK.global CEO, Alexander Piutti. Alexander, welcome!

Alexander Piutti: Thank you, yes. Thanks for having us. 

 John Koetsier: Really appreciate your time.  Talk to me a little bit about why we waste so much food. 

Alexander Piutti: Yeah. So it’s a really good question. If you look at the supply chain, there’s a lot of oversupply going from A to B, basically. People want to have lots of stock of foods just to make sure that you as a consumer have access to the foods you like. So in general there’s a lot of food, you know, quite an overstock or oversupply.

So, and then because food is perishable it needs to travel from A to B really fast. So if there’s oversupply, we need to make sure to connect the dots really fast otherwise it gets wasted, it goes to the bin.

So that’s a general problem that we can’t fix with the supply chain. However, we can make sure that we distribute or redistribute really fast, and that is only possible through technology to rescue foods and to make sense of food which is oversupply food.

But even better than real time, once you move into understanding patterns — why there are food waste cases —  you understand these patterns and see they come in a regular fashion … we can move from reactive to proactive, to anticipating, to predicting with a certain probability. And then we move from rescue to avoidance, so that’s the solution.

John Koetsier: Interesting, interesting. So let’s dive into the technology around how to do that, in a moment. If we look at that 1.6 billion tons, what is that mostly? Is that like fresh fruits and vegetables that spoil, is that most of it? Is most of that in the Western world? Give us some details on that.

Alexander Piutti: Yeah. So, it holds true for across the globe, Western world or Africa, Asia, it doesn’t really make a difference. So food gets produced, you know, you have produce, you have food production, you have transportation, you have distribution, you have wholesale, you have retail. So if you look at the supply chain, conceptually, it’s quite similar independent of where you are in the world.

Half of the food that gets produced gets wasted sooner or later …

And then of course, the local differences, you know, people like certain food better than other foods, but systematically it gets produced, like half of the food that gets produced gets wasted sooner or later, which is crazy. 

John Koetsier: Wow.

Alexander Piutti: It’s crazy, yeah. It’s not like 2% or 5%, it’s 50%. 

John Koetsier: 50% of the food that we produce globally gets wasted!

Alexander Piutti: Yeah. So that’s all potential, right? So that’s a big problem, but at the same time, as you know, we, as entrepreneurs would like to look at it as a potential, call it “market potential” even.

So that 50% is a blue ocean scenario, right?

And so if we achieve to take out a lot of volume of that potential food waste, that protects our resources because we don’t have to produce as much, obviously. So we can ramp down on production, which makes all the sense in the world because we’re saving our resources. Plus, in addition, some people don’t know there’s a direct correlation between food waste and the climate damage.

Food waste is one of the largest CO2 emitters …

John Koetsier: Yes.

Alexander Piutti: Food waste is one of the largest CO2 emitters, if you like, four times bigger than globally … so that’s huge. 

John Koetsier: So, I mean, the scope of the problem here is massive. Of all the food we produce, half of it is wasted. Not only is that not used, so we used the land, we used fertilizer, irrigation, all that stuff, probably gasoline as well for machinery…

Vlad Voroninski: Exactly.

John Koetsier: …to actually produce that. Probably some of that was also transported and then also it’s thrown away where it decomposes, it rots. And so we’ve got CO2 coming off of it and we still have almost a billion malnourished people around the planet. Okay. So you’re building a system using artificial intelligence to reduce the problem.

Talk about your system, talk about your software. What are the inputs? What are the outputs? How does it work? 

Alexander Piutti: Yeah. So we’re in process of actually building the technology. So it’s not like it’s they’re completed works, you know? It’s like we’re in process of building it up, and as good entrepreneurs, we’ve simulated the process manually and physically at first. And so I’ve started four or five years ago to look at the problem, basically.

So, and one important point to mention is that before the great technology really kicks in, we’re all human beings, so we have to interact. And so we have to talk to suppliers, we have to talk to producers for them to build trust in our capabilities, you know, to build trust into the future technology to take over at some point in an automated fashion, yeah? But until that point — so people need to open up, so call it trust building, because it’s a crazy topic and people don’t like to talk about it generally.

So building trust is key before you understand what you may do with that food, you know, we talk redistribution so it sounds like we generate more demand.

John Koetsier: Yes.

Alexander Piutti: Demand is static, right? Demand will not go up through what we do, but in order to agree what we may or may not do with that food that we actually get our hands on, it’s really important to protect that trust with our supply partners, yeah? So once call it a set of rules, whitelists and blacklists, you know, like may we forward it to NGOs? Yes we may.

May we actually sell it?

Maybe not, because it produces a chain of conflict. May we produce stuff and move that food into production? Yes, that’s fine, close the loop and bring it back to society, call it a set of rules.

Once we have these rules, we can inject them into the technology …

So, and then once we have these rules, we can inject them into the technology and the technology takes over. So then, you know, matching between oversupply and demand in a more concrete fashion over time so that it becomes more intelligent over time. 

John Koetsier: So what’s really interesting here — and by the way, I’m going to ask you to say the name of your startup because people are wondering — but what’s really interesting here, is that I recently did a story on Google’s or Alphabet’s Project Loon, which is delivering internet via balloons. Basically balloons floating around in Kenya, went live two days ago, and they use machine learning so that these balloons — they have about 35 of them in operation — are going up or down in the stratosphere and finding the place where they can hang around in an area, or move to an area where they’re needed, that sort of thing.

The machine learning is needed because it’s a complex process and there’s a lot of variables, and no one person can do that or handle that in real time. So, that’s what makes me interested in what you’re talking about, because we’re talking about processes that involve literally tens of millions of producers, probably similar numbers of people in distribution, and literally billions of people who are consumers.

And so you clearly need some level of very sophisticated technology to handle that. So tell everybody what your startup is called and talk a little bit more about your technology. 

Alexander Piutti: Yeah. So I started what’s called “Spark Global,” it’s SPRK.global and that’s also a domain that you might want to look it up, so SPRK.global is the company’s name.

Now talking about, you gave a great example by the way, right? And to showcase, you know, complexity of the given problem in a very simple fashion, and this is what we need to achieve also. And because we can all relate to food, you know, food is part of our daily lives in that we consume food. It’s an emotional topic we can all relate to. However, when technology kicks in, as you mentioned, there’s like a multitude of demand options where we can put stuff and we have to agree where it makes sense.

So thousands of NGOs, they qualify as demand partners because they’re chronically undercapitalized, underfunded, they have very limited budgets basically, but they all deal with foods on a daily basis because they’re running schools and canteens and kindergartens, and, you know, places for the elderly, and they all deal with food in a large volume, right?

We give the food at a discount to the NGOs and they’re happy because it’s saving half of the money they used to spend …

So my observation is they, and I’ve been talking to these guys for four or five years, purchase food in a very normal fashion, they don’t get discounts. So they’re just going to a wholesaler retailer, purchase whatever they need, so they’re disadvantaged in that sense because they clearly don’t have the budgets to invest into good quality foods, yeah? So, if we can connect the dots conceptually and say like, well, what if we distributed this food oversupply to the folks in need, you know, to the NGOs.

And they become a volume partner which makes all the sense in the world, plus we’re saving them money because we get our hands on that food for free, almost. So we can still sell it, but at a major discount because we are a for-profit in tech venture, we need to make money. We do have business product to scale, and scale the impact, but you know we give the food at a discount to the NGOs and they’re happy because it’s saving half of the money they used to spend on their foods.

John Koetsier: Right.

Alexander Piutti: So win, win, win situation, yeah. So, but this is how we think about the solution, you know, without generating channel conflicts, to be transparent to our supply partners because they need to approve. 

John Koetsier: Yes. 

Alexander Piutti: Why are we making sure we don’t waste as crazy as before? So that set of rules we talked about earlier is very important to make sure we are transparent, we produce a win-win effect, plus we help people like NGOs to do a much better job to invest into better quality foods to nourish the society.

John Koetsier: Yeah. Interesting. So you are starting, if I’m not mistaken, on citywide solutions, and you talked about that and how that works. How can you scale that up over time to maybe countrywide and maybe even international solutions?

Alexander Piutti: It’s not like we want to reinvent the wheel, right?

So there are parties, you know, there’s the odd transactions, there’s a lot of food basically, so we just make sense of what’s there and try to be a little bit smarter by injecting technology, but we don’t create a new market. It’s not like we created a new marketplace, for example, we just connect the dots and in a better way, faster way, more meaningful way, yeah.

Food banks … don’t have access to technology … they just have a phone or they have an Excel sheet

But when you look at food banks, for example, NGOs, they don’t have access to technology so they just have a phone or they have an Excel sheet, you know, they call the three, four, five people they know. And, you know, the bottleneck is time. So if we automate that process and do the job for them basically, we can onboard them onto our platform later on. So we power these food banks in the future, independent of location.

Yes we’re starting in Berlin in Germany obviously, but what stops us to do the same job in New York and San Francisco, and in Asia to onboard these NGOs, give them a home from a technology point of view, make sure our technology captures their requirements, basically, while onboarding the supply chain. Yeah, and you get the concept, it’s like one big platform, call it “Amazon of Food Oversupply” if you like.

John Koetsier: I love that. I love that. I mean, we’ve seen over the past few years that we’ve seen SaaS solutions for every vertical. But you’re absolutely right, the kinds of small local organizations that run food banks don’t have a lot of technology. I’ve never heard of somebody building a tech platform for them and if they had that for inventory and stock and other things, that was shared, well guess what? In Berlin, they have an oversupply and Frankfurt they have too little. They can share, and when it’s reversed they can share back and forth, and internationally at some point as well.

Alexander Piutti: Yeah. And in addition, to give you another example from a commercial point of view, if you are, let’s say a large food retailer and you have hundreds of supermarkets that you ship to, even those still have the means to understand who’s  oversupplied, who’s undersupplied.

John Koetsier: Yes. 

Alexander Piutti: Even those guys we can onboard. Give them, you know, like awards, marketplace that only is visible for them, it’s not transparent for the public. But we can also onboard commercial players and help them shift stuff from A to B which is not possible right now.

Together we have the opportunity to build such beautiful technology, to make them more efficient, to help them make better decisions, to drive down overproduction …

And all these examples talk to use cases we’ve seen firsthand, you know, so like we move in, like we look behind the curtain, like we understand their problems basically. And none of these guys is capable enough to create such a superior comprehensive technology by themselves. And these are very big players, but they  don’t have access to something that cuts across the supply chain. So that marketplace is not in place yet. Together we have the opportunity to build such beautiful technology, to make them more efficient, to help them make better decisions, to drive down overproduction as we called it out in the beginning of the talk to say like 50%, oh the planet’s crazy.

Plus it’s adding costs like this to supply chain, to society, to the planet. Yeah, so it sounds considerably easy to drive that down, but that’s our mission, together with you guys and the supply chain. To start in Berlin, build a powerful solution and roll it out to the world.

John Koetsier: It’s a really, really big vision, because in order to make it work, you need to connect with a lot of local dots, a lot of local providers, suppliers, the NGOs that you talked about, the retailers that you talked about, everything else like that. It’s a really, really big vision and being able to connect everybody, or at least a significant percentage of people, will help enable that.

Now you’re in a startup challenge which I think is billed as the world’s largest startup competition, it’s the Extreme Tech Challenge. Tell us a little bit about that and how you got involved. 

Alexander Piutti: Yeah. So that’s a wonderful story. It happened by accident, if you like, we — so I know some folks at Samsung in Germany — we’ve done projects together and they mentioned Extreme Tech Challenge last year and said, ‘Well, you know, SPRK sounds interesting, you should really apply.’ And so we did, and we had no idea. We said we’re one of like 2,400 something startups from across the globe, you know…

John Koetsier: Not good odds.

Alexander Piutti:  And they’re all innovators and they have a great concept, and you know, Silicon Valley, and Israel, and like whatnot in Germany, right? And so we applied and we had no idea, and surprisingly we made first place in the category called “Smart Cities and Transportation.”

And what surprised us is, you know, our concepts — and obviously we’re starting in Berlin — but obviously it’s relevant to people out there, even in the U.S. And we said like, do we come across as something exotic from Europe? Because sometimes Europeans are looked at, you know, somewhat crazy and different and you know, like special. And they said, ‘No, no, no, it’s a …’

John Koetsier: Very special.

Alexander Piutti: Haha … ‘it’s a global problem. We like your concept and we want you to push ahead and succeed basically, and to come to the U.S. at some point. Yeah, because it’s not a crazy exotic European problem. No, it’s a global problem we recognize and we think you have something that might apply to the globe. So go ahead.’ And you know, this is why we made first place, which is an honor. 

John Koetsier: Very good. Very impressive. I believe you’re one of seven finalists now and you’re going to be pitching Jerry Yang, obviously Yahoo and an internet legend, also some top Samsung executives and a few others. I believe Tim Draper of Bitcoin and venture capital fame is there as well.

Excited about that?

Alexander Piutti:  Yeah, totally excited, totally excited. I mean like, my background is I’ve been in digital marketplaces for most of my life and I’m a nerd, if you like, I’m a techie, you know, tech guy. And we sold our company to Yahoo, this is a long, long time ago, and so I worked for Yahoo for many years after the acquisition but I’d never met Jerry Yang, right? Like I knew of him, of course, but we never really met in person.

And now it’s through the Extreme Tech Challenge we connected and we’re shooting emails back and forth, and that’s wonderful to get access to these very established great minds and to get behind the case and push impact startups like ours, just beautiful… 

John Koetsier: Wonderful, emailing Jerry Yang back and forth. Very, very good. Excellent. Well thank you so much, Alexander, for joining us. 

Alexander Piutti: Yeah, thank you. Thanks for having us … all the best, bye-bye.

John Koetsier: Excellent. 

Alexander Piutti: Greetings from Europe.

John Koetsier: Yeah, it was a real pleasure. Everybody else, thank you for joining us on TechFirst. My name is John Koetsier. I really appreciate you being along for the ride. Hey, whatever platform you’re on, please like, subscribe, share, or comment, maybe all of the above. If you’re on the podcast later on, rate it and review it. That’d be a massive help. Thanks!

Until next time, this is John Koetsier with TechFirst.

 


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