Nature inspires some food startup founders to discover untapped opportunities. Misfits Market, for instance, grew out of Founder Abhi Ramesh's trip to an orchard in Eastern Pennsylvania. On his apple picking adventure, Ramesh noticed that some of the fruits had fallen off the trees too early. They were put into a bin and taken to the processing side of the orchard. Ramesh, curious as to what became of all that produce, asked the farmer where it went.
The farmer ended up showing Ramesh his facility, where the apples that were good enough to go to grocery stores ended up in one bin. But “for every good-looking apple, there were two or three ‘ugly apples’ that were scarred, bruised here and there, too small,” Ramesh told PYMNTS in an interview. “Those would go in this gigantic bucket.” The farmer said that the farm tried to donate them, but the majority were composted or tossed.
Seeing all of that wasted produce inspired Ramesh to start Misfits Market, with the goal of providing affordable fresh produce to customers on the East Coast. He seeks to find produce that might otherwise go to waste and sends it to customers in five different states – Pennsylvania, New Jersey, Delaware, Connecticut and New York. Customers can choose as much produce as they want to receive, delivered either on a regular basis or as a one-time order.
The Subscription Model
Misfits Market offers produce in two different sizes: a large “madness box” or a small box called a “mischief box.” While customers have the option to buy either box on a one-time basis, Ramesh said the vast majority of his consumers subscribe because of the discounts that are offered for recurring purchases.
Misfit produce is still a “novel idea,” Ramesh said. “Someone may not know they want to subscribe to this for weeks and weeks,” he noted, which is why he gives customers the option to try out the service. To educate consumers, the company shares the story of each piece of produce through email and social media, explaining why a product is "misfit." A honey crisp apple, for instance, might be smaller than the size that grocery stores want to put on the shelf, but is still perfectly fine to eat.
Logistics and Sourcing
To source products for his produce boxes, Ramesh turns to various local farms and growers, among other providers. During the winter, however, he wants to make sure his customers get enough variety, and not only root vegetables from the Northeast. For that reason, the company also works with growers from other places, like the West Coast.
Startups like Misfit Market don’t only bring in product from grocers. Ramesh also works with other companies in the food supply chain, like distributors. “They’ll have an excess shipment of avocados, for example, that someone just misordered,” he said. That distributor might not have the infrastructure to store and hold those avocados, he noted. As a result, they might need to get rid of those products immediately.
Beyond Misfits Market, companies like Hungry Harvest have tackled the challenge of food waste (and food insecurity) by purchasing so-called “ugly” fruits and veggies as “seconds” and then selling them along with surplus produce. Hungry Harvest offers boxed delivery of those items to customers. “Ugly doesn’t mean bad, moldy or rotten, so the quality is great,” Founder Evan Lutz said in an interview with PYMNTS last year, suggesting that misfit produce may have found its match with startups looking to make fresh fruits and vegetables more accessible and affordable to consumers.