The FDA estimates that food waste comprises a whopping 30-to-40% of the total U.S. food supply. “This figure, based on estimates from USDA’s Economic Research Service of 31 percent food loss at the retail and consumer levels, corresponded to approximately 133 billion pounds and $161 billion worth of food in 2010.” This can be a tough pill to swallow both logistically and emotionally, and the team at Renewal Mill wants to change that with a line of upcycled food products.

Only recently defined by the Upcycled Food Association, upcycled foods are those that “use ingredients that otherwise would not have gone to human consumption, are procured and produced using verifiable supply chains, and have a positive impact on the environment,” and will likely continue to grow in popularity.   

This is especially important in light of recent events. Wildfires raging across the western United States continually remind us that climate change is a real threat. Additionally, COVID-19 has increased food insecurity in some of the most vulnerable communities across America. And we can all work to combat this by being more sustainable in the kitchen.

Renewal Mill is bridging the gap between food manufacturers that produce byproducts and both food retailers and wholesale customers, using what the team refers to as a “co-location model.” This allows for both B2C and B2B distribution channels — B2B service for producers, B2B wholesale distribution, and a B2C product line.

Renewal Mill produces okara flour from the pulp leftover from soymilk processing and has plans to do the same with oat flour upcycled from the oat milk production process. The CPG product line also includes brownie mix and cookies that are both vegan and gluten-free and serve as great vehicles to introduce curious consumers to upcycled ingredients.

CEO and co-founder, Claire Schlemme brings to the table both extensive consulting experience and a degree in Forestry and Environmental Studies from Yale University. She also holds degrees in Biology and Spanish from Wellesley College.

COO and co-founder, Caroline Cotto, serves as Board President of the Upcycled Food Association. She previously worked at both Techstars and HubSpot. In addition, Caroline was a Fulbright Fellow and holds a degree in Human Sciences from Georgetown University.

Forbes estimates the upcycled food market to be worth $46.7B in 2019, with a CAGR of 5%. The team at Renewal Mill believes that — similar to the organic food label — upcycled food will soon be a household norm.

Renewal Mill has established relationships with several B2B partners including Barilla, Airbnb, Google, and Humphry Slocombe. B2B2C and B2C sales are distributed through Amazon, Whole Foods, and Billion Vegans, to name a few.

Revenue for the most recent fiscal year stood at $81,152, up 31% from the prior fiscal year. It should be noted, however, that the team is still pre-profit. This is typical for a startup of this stage, but net income in the negatives is definitely something to keep in mind when considering a potential investment. That said, the team is definitely lean, with only $46k in short-term debt and three full-time employees.

• A number of sales verticals: The Renewal Mill team has established impressive partnerships for both B2B and B2B2C channels. With these relationships in place, the team is poised for maximum scalability. The colocation model also incentivizes further partnerships with food manufacturers making expanding product lines attractive to potential distributors.
• An impressive team: Caroline Cotto and Claire Schlemme are major thought leaders in the upcycled food space. With Cotto serving as the Board President of the Upcycled Food Association and Schlemme’s degree in Environmental Management from Yale University, if anyone is going to win out in this space it will be this team thanks to both their experience and connections. Though the team is lean and this is reflected in the ratings (only 3 full-time employees and no prior exits), the women at the helm are knowledgable and connected in the ecosystem within which they operate.
• Early movers with little established competition: There are very few established competitors in the upcycled food space. Of those that do exist (Regrained, Rise, Planetarians), very few have the number of verticals established by Renewal Mill or the convenient colocation model. Regrained, one of the more prominent competitors, appears to focus more on snack foods, while Planetarians focuses on plant-based meat analogs. In addition to differentiating within CPG lines, Renewal Mill has been granted several awards, including being named a World-Changing Idea by Fast Company and the Expo East Rising Star award.

Renewal Mill has been rated a Deal to Watch. The early performance is particularly impressive, with several B2B and B2B2C partnerships already secured, and more likely on the way. The colocation model and range of CPGs also significantly differentiates the company from the few competitors that do exist. Market size prospects are also quite promising, especially as attention shifts more and more to combating climate change. 

This is not to say that an investment in Renewal Mill is without risk. The defensibility of the products is one concern. However, this is mitigated by the strength of the team, the connections, and established partnerships and sales verticals.

Return on investment could eventually come in the form of an acquisition play. This would likely be by a “larger ingredient house.” With their impressive partnerships and connections in the upcycled food community, this is not a reach by any means and could offer a serious return on investment.