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Waste Not
Milwaukee Startup Helping Small African Farms Turn Waste into Livelihoods

Agricycle wants to address poverty and put a dent in global food waste. So far, it has created nearly 7,000 livelihoods in Africa and diverted 177 tons of food waste — and counting.

Smallholder farms in sub-Saharan Africa account for up to 90 percent of local food production. Yet these small operations can lose as much as 90 percent of their products, because local markets are flooded with the same crops that farmers can’t sell through regional or global markets. These smallholder farmers are among the world’s poorest people, and many are women.

A Milwaukee-based startup called Agricycle targets these challenges with a vertically integrated supply chain that transforms food waste from African smallholder farms into products. Farmers use Agricycle’s passive solar dehydrators to preserve their mangoes, pineapples and jackfruit — which the company buys and sells in the United States and Europe.

Roughly a year after raising $1.4 million, Agricycle is firing on all cylinders. It won Rabobank’s 2020 FoodBytes! pitch competition in December, opening the door to new investment to be announced in April. A hiring spree will more than double its global headcount, and new products are in the works. Agricycle is also applying its model to lionfish — an invasive species that threatens coral reefs. And as Agricycle continues to grow its network of smallholder farms, it plans to distribute 2,000 solar dehydrators by the end of 2022, compared to the nearly 300 in service today.

“We are proving that you can source from people who have — for centuries, at this point — been excluded from the global agricultural supply chain, out of neglect and disparaging thoughts that [questioned] how could smallholders create quality, food-grade products,” Josh Shefner, 23, Agricycle’s co-founder and CEO, told Sustainable Brands™. “Nobody ever went that extra step [to ask], ‘What would they need do that?’”

Investors are attracted to Agricycle’s focus on upcycling and solving challenges at the “farmgate” — which refers to products purchased directly from a farm in the B2B space — says Anne Greven, head of food and agriculture innovation at Rabobank, which facilitates the Foodbytes! initiative.

“The technology of dehydrating has been around forever,” she says. “This is not new; but how they were deploying it, how they were supporting smallholder farms, how they work with farmers to reduce waste and create value at the field was really powerful.”

Agricycle’s seeds were planted in a 2015 university engineering project aimed at helping Jamaican farmers turn dried mangoes into beer. They designed a passive solar dehydrator for the project, but the farmers said more support was needed.

“They basically spelled out that it’s not enough just to provide a technology and teach them how to use it,” Shefner said. “You have to figure out how to get this out of the country; and somebody has to brand it, market it and sell it.”

Shefner carried the project forward, eventually joined by Claire Friona, 21 — Agricycle’s co-founder and portfolio manager. They spent the next few years iterating the model in Panama, Haiti and Uganda. In Kenya, Shefner met Agricycle co-founder Patrick Nderitu, 38, who was working with an NGO that helped mango farmers address food loss. Nderitu began developing Agricycle’s operations in East Africa in 2019. That included building a supply network of smallholder farms, recruiting a team of food safety and finance experts, and fine-tuning the design of the passive solar dehydrator — which became mobile, stackable and collapsible. In the US, Shefner focused on raising funding, branding and marketing.

Agricycle now operates in Kenya, Tanzania, Uganda and Liberia; and it is discussing expanding to Latin America. Its global supply network includes 44,000 members who can access training (food safety, financial literacy and agricultural practices), technology (dehydrators and SMS messaging tools) and benefits (including health insurance). Members can buy the $350 dehydrators via microloans or layaway programs, and some are subsidized through county governments and the UN FAO.

Image courtesy of Agricycle

Nearly 1,100 network members, or 2.4 percent, are also producers (Agricycle wants to increase that proportion to 25 percent by the end of 2021, and by 50 percent by the end of 2022). Some producers are smallholders, and others are women or youth who form microenterprises to buy and dehydrate fruit from smallholders for sale to Agricycle.

Rural farmers in Kenya make an average of $2 daily, Nderitu says. 71 percent of the smallholder farmers Agricycle works with are women.

“Whenever they dry a kilogram of mangoes, it increases their income by more than seven times when they’re selling to us,” he says. The company claims it has created nearly 7,000 livelihoods based on producers with whom it has initiated supply contracts.

Agricycle launched its first brand, Jali Fruit Co., in April 2020. The line of dried mangoes, pineapple and jackfruit proved the concept that sourcing from a distributed network of smallholder farms is more resilient than the large plantation model. Jali Fruit products are sold in nearly 200 US stores — including Harmon’s, Bristol Farms and Market of Choice — and directly to consumers via its website. Each bag of dried fruit is traceable with a QR code that lets consumers learn about the farms the supplied the fruit.

Agricycle’s supply chain has expanded to include other forms of agricultural waste. For example, Liberia alone generates 2.4 million pounds of waste coconut shells and 7.6 million pounds of waste palm kernel shells. A new product called Tropicoal Ignition upcycles these materials — along with cassava root — into charcoal briquettes, avoiding the deforestation associated with standard charcoal production. Agricycle planned to introduce Tropicoal Ignition in April 2020, but the pandemic delayed its plans to summer 2021.

Field Better is a new B2B line of more than 75 functional, upcycled and sometimes unusual ingredients — including soursop, pigeon peas, thorn melon and cascara. CPG manufacturers can use the upcycled flours, powders, extracts and purees in their own products or via upcoming co-branded partnerships with other upcycled food companies.

In May 2020, Agricycle acquired Olacoral, a startup that created a network of fisherman in Belize to harvest lionfish for sale as food and jewelry via regional and global markets. In December, Agricycle spun off Olacoral and it is now seeking its own funding.

Agricycle has created many success stories within its network, Nderitu says. Many African suppliers are divorced or widowed women who have been able to use the dehydrators to process fruit from their homes, landowner or not. One widow, for example, made enough money to build her own house; while another producer was able to put two of her daughters in school — including a teenager in secondary school, which most girls do not complete.

“What happens with most of these daughters who are unable to go back to school, they get married early and they sustain that cycle of poverty,” he says. “So, we have a lot of hope in these initiatives that are breaking poverty cycles in the poor households we serve.”