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Start-up aims to fix this $165 billion problem: Food waste

You know that bruised apple you pushed aside at the grocery store? It's probably in a dumpster or a landfill somewhere, along with the 40 percent of America's food that is thrown away.

Food Cowboy is a start-up looking to redirect the fate of rejected food, not only to end hunger in America but to save food distributors money.

Throwing food away is expensive. According to the National Resources Defense Council, Americans spend $165 billion a year on food that they waste, that's twice as much as the federal government spends on food stamps.

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"We are an air traffic control system for food that is coming in from a donor and going out to a recipient charity," said Barbara Cohen, one of the company's co-founders.

The company's other founders, Roger and Richard Gordon, saw firsthand how rampant food waste is in the country after trying time and time again to donate food, only to be turned down by charities and food banks.

Helping food find people

Richard, a longtime trucker, would call his brother, Roger, to find somewhere he could donate rejected food.

"He'd have a shipment that was rejected by the receiver because the eggplants were too dark, or the carrots weren't straight enough, so he'd call me and I'd go looking for a church, or a food bank, or someplace to take it to," said Roger.

Most of the time, their attempts to help the needy failed since truckers off-load late at night when most nonprofits are closed.

"We started to think, well, maybe if you could build an app to get people to food, maybe you could build an app to help food find people," said Roger.

Richard and Roger Gordon are hoping their business, Food Cowboy, can help eliminate some of the billions of dollars of food that is wasted each year.
Source: Food Cowboy
Richard and Roger Gordon are hoping their business, Food Cowboy, can help eliminate some of the billions of dollars of food that is wasted each year.

Their application gives for-profit food distributors a way to communicate with nonprofits to arrange a donation.

"To build an app like ours, you really need to understand the truckers' issues and also the food pantry systems and put it all into one platform. We're trying to change the way two systems work," Roger said.

Thinking like a business

The Gordons understood the distribution system, but they needed help to craft an app that was palatable to nonprofits. They found Cohen, who brought a background in public health, nutrition and hunger issues into the mix.

"The business community holds the food, and they're the ones to donate the food, so creating a system the charities can use that replicates the way the businesses think creates a better match," said Cohen.

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Donors enter information such as food type, temperature, quantity and description so food banks know what they're receiving. Food banks provide logistical information about where and when they can accept.

Food Cowboy is hoping that nonprofits will adapt to a more businesslike approach. Nourish Now, founded by Brett Meyers, is a Maryland food bank that's doing just that.

"As the food donor goes through the process of putting the information through a mobile application, it's an endless possibility of getting more and more food donated," said Meyers.

Recipients pay Food Cowboy ten cents a pound for donated food, which is a big discount. Normally non-profits pay between 25 cents to 49 cents a pound for donations.

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The app even processes the paper work needed for donators to receive a tax benefit, an incentive crucial to Food Cowboy's success.

The process also helps truckers make their routes more cost-effective and efficient.

"There are truckers who are very happy to save time and money, because it costs them money to throw away food. It costs them time to find a place to throw away food. So they've been happy that we have the app and we can find them a food bank or a kitchen," Richard said.

Truckers aren't the only ones who benefit from donating excess food, restaurants can also use the app.

Bringing in restaurants

Dave Dennis of Mamma Lucia Restaurants donates leftover food at least once a week. At the end of a typical restaurant or catering shift, it can be hard to get one of his employees to drop food off at a shelter, if they can even find one that's open.

"We need them picked up at this time, at this location, and they come and pick it up and take it to the appropriate shelter … we stand to benefit because we get rid of the food that's going to go to waste," Dennis said.

In the near future, Food Cowboy's founders expect they can capitalize on the growing sharing economy to help reduce surplus.

Imagine during your typical trip to the grocery store, picking up an extra bag of food, or picking up the kids at school along with food donated by the cafeteria and dropping it off at a food bank that you pass on your way home. Food Cowboy hopes to coordinate food drop-offs like this, making food donation part of a daily routine.

They're already closer to achieving that goal, the start-up just released Food Cowboy 2.0, which allows restaurants and local cafeterias to alert charities when they have food to donate.

Besides getting people involved in food donation, Roger, a lawyer who also has an MBA, believes the tax code has to change in order for Food Cowboy to continue to prosper. Larger companies are guaranteed by the Internal Revenue Service the right to take tax deductions for donating food, but smaller companies like family-run farms or local restaurants have fewer guaranteed government incentives, he said.

Still, the start-up is expanding rapidly. In just 18 months, Food Cowboy has moved about 500,000 pounds of food and signed up about 1,000 truck drivers.

Roger estimates that more food is wasted by food companies in the supply chain in 19 days than is donated through the largest food bank network all year, so there's still plenty of room to expand.

Now that's food for thought.

Andy Rothman contributed to this report.