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Waste Not
The Ugly Company Raises $9M to Grow Market, Capacity for Upcycled Fruit Empire

The dried fruit snack maker is on a mission to put a dent in the massive produce waste issue on farms in California’s Central Valley, while teaching consumers the value in ‘food waste.’

When The Ugly Company founder Ben Moore speaks about the scale of the wasted-produce problem on farms in the US, he does so with a tone of humility that almost matches the magnitude of the issue.

“Initially, our model was difficult for the industry to adopt as it just wasn’t mechanically possible (in farming),” the fourth-generation farmer told Sustainable Brands®.

Moore’s roots are deep in California’s Central Valley — an agricultural region responsible for 250 different crops valued at $17 billion annually — specifically Farmersville, where he lives and The Ugly Company is based.

His vision for The Ugly Company was fairly simple: Find a way to process a portion of the millions of pounds of the perfectly edible, yet wasted fruit farmers have to toss annually due to a slight blemish or imperfection and turn it into consumable snacks. He set out on this mission in December 2018; and later the next year, he had his first products on store shelves.

Working through infrastructure issues

Moore says one of the larger initial problems was working through the US farming system — which didn’t really have a pathway to handle all of this excess fruit, let alone someone who wanted to purchase it at bulk and reprocess.

“Farmers used to pay us to haul it and dump it, but now I buy it by the ton — basically, a bunch of boxes scaled up,” he says.

The fruit — which now includes cherries, peaches, white nectarines, apricots and kiwis — is then sent to a plant in Farmersville where it is upcycled into dried, shelf-stable products ready for sale at one of the brand’s growing number of retail partners nationwide.

Even in spite of some of those broader issues, The Ugly Company turned more than two million pounds of unwanted produce into dried fruit last year and is tentatively on track to reach three million pounds during calendar year 2023 — joining the growing list of upcycled food innovators such as Agricycle, ReGrained, Renewal Mill, Treasure8 and Wtrmln Wtr and WellVine working to preserve the value and nutrition in previously wasted food streams.

Making waves in the market

In August 2022, The Ugly Company was recognized by grocery giant Kroger as one of five winners of its annual Go Fresh & Local Supplier Accelerator Cohort. The retailer picks a handful of emerging food, beverage and other grocery-related brands each year to support with “business coaching, initial placement in select stores, display signage, a launch event to introduce their product to customers and marketing support through Kroger’s ‘Precision Marketing’ channels,” according to Dan De La Rosa, Kroger group VP of fresh Merchandising, who oversees the competition.

“The Ugly Company stood out for a few reasons; but after learning about their product and seeing farmer Ben’s passion during his pitch, we knew they were a brand we wanted to help grow,” De La Rosa says.

The Ugly Company will debut across several Kroger banners on the west coast later this year.

Targeted investment

Before confirmation of the $9 million investment, Moore had already purchased an old plant in Farmersville, which he plans to renovate to solely focus on processing and packing Ugly Company products.

“The tipping point was finding the Farmersville facility and putting it into escrow,” Moore says. “This created urgency with a set date on the calendar to succeed or fail.”

Moore adds that the next day, Sun Valley Packing — the company’s co-lead investor — agreed to help close escrow; and it had the first portion of the funds in the bank the following week. Then, its other co-lead investor, Value Creation Strategies, flew out to California, saw Farmersville and “were sold on the round, too.”

“Everything fell into place after that,” he says.

Moore says one of his biggest achievements was figuring out how to mechanically remove the stubborn label stickers commonly used on produce — which are placed at the farm post-processing and ultimately needed to be removed by hand, one at a time, in order to be processed for upcycling.

“95 percent of our supply has those stickers,” he notes. “Removing those stickers was very challenging for us and added a tremendous cost.”

Moore says his team has figured out a way to remove those stickers more efficiently, something that will be a focal point in the new plant.

Building and meeting demand

Although The Ugly Company is now stocked on the shelves of select REI and Whole Foods stores, along with the Kroger launch later this year, it remains to be seen whether enough consumers will regularly pay $5-6 for a 4-oz bag of salvaged dried fruit.

“There’s not enough consumer demand to meet the amount of fruit being thrown out,” Moore says; but he’s betting on the “realness” of The Ugly Company’s brand and story to build that demand.

“Ultimately, consumers want to buy great-tasting products from a brand that they believe in. I started this company from the seat of a tractor,” he says. “The genesis of our brand helps people trust that we do what we say we do — preventing food waste at farms in California.”

The remainder of this most recent investment will go to sales and marketing, the latter of which The Ugly Company didn’t have until now. Moore hopes to use the story of the company to build awareness about the larger issues at play in upcycling fruit.

“It’s a fact that we’re preventing food waste; but that can be tough for consumers to sift through — what’s real and what’s not,” Moore says. “It’s a special thing to educate on that.”