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PHOTOGRAPH BY YURI HASEGAWA FOR BLOOMBERG BUSINESSWEEKTHE BOTTOM LINE Apeel Sciences is winning investment for an edible
material it’s developed that doubles the shelf life of produce and cuts
harvest-to-market losses for small farmers.◼SOLUTIONS BloombergBusinessweek November 2, 2020Oncesmallholderfarmersin theKenyanvillageofMasii
havepickedtheircrops,alltheycandois waituntila buyer
trucksthrough.Thesystemworksfairlywellforbeansand
corn,butmangoes—thearea’sothermaincrop—spoilmore
quickly.If thetraderis late,theyrot.
“Welosemarketbecausethemangoesgospotty,”says
ObadiahKisaingu,chairoftheMasiiHorticulturalFarmers’
CooperativeSociety.Heestimates40%oftheco-op’s
mangocropis losttospoilage.Buta simplecoatingcould
changethat.A Californiacompanyhascreateda formu-
lationthatdoubles—orforsomefoodseventriples—the
shelflifeoffreshproduce,enablingfarmerslikeKisaingu
toaccessfar-off,largermarkets.
ApeelSciencesInc.,basedin SantaBarbara,exceeded
a$1billionvaluationin Maywhenit received$250million
in financingfromOprahWinfreyandSingapore’ssover-
eignwealthfundGICPteLtd.,addingtoearlierinvestments
fromAndreessenHorowitzandotherventurecapitalists.
(BloombergLP,whichownsBloombergBusinessweek,
is aninvestorinAndreessenHorowitz.)OnOct. 27 the
InternationalFinanceCorp.,theWorldBank’sprivate-sector
arm, announced a $30 million investment in Apeel, a move
that will open networks in East Africa, South America, and,
pending regulatory approval, Southeast Asia. Singapore-
owned investment company Temasek Holdings Pte Ltd.
and food-focused impact investor Astanor Ventures are
partners in the equity deal.
“This is a way to almost leapfrog the necessity of
cold-storage chains and bring products to mature mar-
kets, where farmers can get better value for their crops,”
says Stephanie von Friedeburg, the IFC’s interim man-
aging director. More time for fresh produce on grocers’
shelves means less food waste—a $2.6 trillion problem,
according to the United Nations’ Food and Agriculture
Organization. Project Drawdown, a San Francisco-based
nonprofit that analyzes climate solutions, says fixingit would be one of the most effective ways to reduce
greenhouse gas emissions.
The investment brings Apeel closer to what James
Rogers, 35, envisioned when he founded the company
eight years ago. Rogers, who has a Ph.D. in materials
science, wanted to solve the problem for food much in
the same way that oxide barriers preventing rust have
achieved for steel. He developed a natural, tasteless, and
odorless protective coating from plant material—stems,
leaves, skins, basically whatever gets discarded—that
maintains the freshness of food for longer by holding
water in and keeping oxygen out. The product extends
the sweet spot between ripening and rot. And best of all,
the treated produce doesn’t require refrigeration, says
Rogers, the chief executive officer.
Apeel traveled a long road to get here. It was six years
from launch before products applied with the substance
were in stores. Whether the company can cost-effectively
reach small farmers in far-flung areas still remains a chal-
lenge. Rival technologies include Bluapple, which isolates
excess ethylene—a hormone that triggers ripening in some
produce—and antimicrobial packaging. Blasting foods with
blue light, radio waves, or plasma has shown potential in the
lab, but those methods aren’t yet commercialized.
Apeel-treated fruits and vegetables are already in the
largest grocery chains in Germany, Denmark, Switzerland,
and the U.S., as well as Walmart Inc., and the company
recently gained regulatory approval in Kenya, Uganda,
Costa Rica, Colombia, and Ecuador. “We have 50% less
waste of Apeel-treated produce and 30% more sales,” says
Mario Slunitschek, a vice president at Edeka, which oper-
ates more than 11,000 grocery stores in Germany.
The lack of access to cold-storage infrastructure raises
farmers’ costs while reducing their income. Fruit picked too
early doesn’t develop as much sugar, so it’s less sweet. But
harvesting late risks the fruit going to rot. So Kisaingu’s
co-opmembersgatheronlya smallamountata time,asthe
fruitripens.Repeatedtripstothefieldarelabor-intensive,
while frequent visits from the traders raise their costs and
reduce the amount they’ll pay for the co-op’s mangoes.
Such stagnated harvesting closes the doors of big distrib-
utors,whichwanttomakelargepurchasesallatonceand
flytree-ripenedfruitoverseas,ormaturetheearlier-picked
produce in cold storage in Europe, a key market.
“Apeel has huge potential to turn subsistence farm-
ers in Africa into commercial farmers,” says Christina
Owen, senior program officer at the Bill & Melinda Gates
Foundation, which helped Apeel launch with a $100,000
grant. “That means more money in pockets, and more
food in bellies.” �Paul TullisCEORogersfounded
Apeeleightyearsago