SAN FRANCISCO -- Ben Simon thinks about wasted food, a lot.
In 2011, during his freshman year at the University of Maryland, Simon was struck by how much food was thrown away in the college cafeteria.
"I was shocked to see someone buy a full sandwich, eat half of it, and throw the other half out," said Simon. "It was not the values I grew up with."
To him, discarded food was a "natural goldmine" he could source to do good.
Four years later, Simon cofounded Imperfect Produce, a subscription-based home-delivery service for discounted "ugly" fruits and vegetables that are perfectly good on the inside, but otherwise rejected from the food supply chain for their looks.
"About 70 billion pounds of food is wasted annually in the United States. It's from homes, cafeterias, farms, restaurants, grocery store and stadiums. Almost all of it is good food," said Simon. "We wanted to think bigger about how to fight this food waste and create a more sustainable food system that was scalable."
Simon partnered with his friend Ben Chesler, who shared his passion for social good, and the two homed in on farms as the starting point of their food recovery and delivery service.
'Grocery stores didn't want to partner with us'
Up to 20% of the fruits and vegetables grown on farms in America is discarded because the produce doesn't meet grocery stores' aesthetic standards, said Simon.
"It's often for discoloration, scarring on the surface caused by the fruit rubbing against a tree limb or an atypical shape," he said. "Sometimes it's the size. We see a glut of small avocados that go to waste because consumers tend to prefer larger avocados for guacamole."
Simon, 29, and Chesler, 27, decided to source this "ugly" produce directly from farms and deliver it to customers for about 30% less than conventional grocery store prices.
"The reason we created Imperfect Produce as a direct-to-consumer business is because grocery stores didn't want to partner with us," said Simon. "So we became our own store."
The San Francisco-based service launched in August 2015. Today, Imperfect Produce has more than 200,000 subscribers in 22 cities. The company sources its produce from 250 growers nationwide, and slightly more than half of it is organic.
To date, Simon said the service has helped recover 40 million pounds of food from going to waste. "This year alone we will recover an additional 50 million pounds and we have also donated 2.2 million pounds to food banks," he said.
Simon and Chesler bootstrapped the startup with about $20,000 of their own money and another $38,000 raised from crowdfunding platform Indiegogo. Since then, they have gotten a total of $47 million in outside funding from investors that include Maveron and Norwest Venture Partners.
In four years, the company has grown to 1,000 employees and operates 400 of its own delivery vans.
Simon declined to disclose revenue but said this year's sales are expected to double last year's. The business is not yet profitable, but he hopes to expand the service to 40 cities by the end of 2019 and eventually take the company public at some point.
Creating an equitable food system
Customers pay between $12 to $40 per box to choose from a variety of customizable box options. They can opt to have all organics or a mix of organic and conventional fruits and vegetables. In May, the company added packaged items, such as lentils, quinoa, spices, oils, pasta, bread and beverages.
Simon said the packaged goods also would have been thrown out because of oversupply, packaging changes or nearing expiration dates.
The service currently offers 50 to 60 produce items, plus 200 grocery items.
"The value proposition for our customers is saving time and money," said Simon. "But they are also helping fight food waste."
Tanya Achmetov signed up for the service three years ago after visiting Imperfect Foods' booth at a fair at her children's school in San Jose, California.
"They had apples, tomatoes, bell peppers that they sell on display. There was an iPad there and I signed up for it on the spot," said Achmetov, who was impressed by the cost savings and the convenience.
Users can opt for weekly, two-day deliveries (the company charges $4.99 per delivery) or every other week. Customers can skip a delivery if they are traveling.
Achmetov typically spends up to $115 on two to three boxes weekly for her family of five. "The only thing I now go to the store for are eggs, milks and meats. This way I have more time to spend with my kids," she said. "I'm also saving 30% on my grocery budget and on gas money."
"Consumers are shopping more consciously," said Anarghya Vardhana, partner at San Francisco venture capital firm Maveron. "With what they are buying, they are voting for businesses that are pursuing profit with a purpose."
This isn't Simon's first effort to combat food waste.
As an undergraduate, he founded Food Recovery Network at the University of Maryland to collect leftover food from the school's cafeterias and donate it to people in need. The nonprofit currently has chapters in 230 colleges nationwide. Simon ran it for four years, with help from Chesler, before stepping away to focus on Imperfect Produce.
"The important part of running a company founded by Millennials is to use the role of business to look out for people and the planet," Simon said. "As much as it's about making a profit, we hope to elevate the conversation about food waste, climate change and creating an equitable food system."