Flashfood offers app to buy food near expiration dates at deep discount

Food waste is becoming a big issue for supermarkets and restaurants, one that Flashfood is hoping to reduce.

The Toronto company that is opening a Twin Cities office after completing the Target+Techstars Retail Accelerator this month has signed deals for a pilot project with Minneapolis-based Target and other initiatives with Canada's largest grocery chain, Loblaw.

The Flashfood app highlights food close to the "best used by" or expiration dates at individual grocery stores. Users sign on, pay through the app and pick up the food at the store. The startup makes money by taking a cut of each sale.

"This helps not just grocers but consumers as well," said founder Josh Domingues.

Because the food is deeply discounted, it can help lower-income households fill gaps between paychecks and food-pantry visits. For grocery stores, he said, it means an income stream for food that otherwise would be thrown out.

Pressure from consumers and national and international goals to reduce waste are forcing retailers to address food inventories as they come up with ways to cut their carbon footprints.

Domingues, who was an investment firm vice president back in 2015, became interested in the problem after his sister, a chef, called him after a catering job. She was upset because the company threw out $4,000 worth of food that night.

He started studying the issue and soon jumped in with both feet, quitting his day job to figure out a business solution that would help cut the waste. His downtown Toronto condo was in a building with a grocery store that he discovered was losing $7,000 daily in food waste.

More than 40 percent of the food produced in the United States — or 160 billion pounds worth $26 billion — is wasted each year, with $200 billion in estimated costs to repair impacts on water supplies, clean air and other effects. Worldwide, one-third of food is wasted, according to the United Nations.

Food waste also is a leading cause of methane in landfills. Food releases the gas as it ages.

The U.N. and the U.S. Environmental Protection Agency have set goals to halve food waste by 2030. European countries already have responded. France, for example, does not allow markets to throw food out before it is spoiled.

Many food businesses, pressured by consumers and wanting to solve the issue before any regulations are put in place, are turning to companies like Domingues' to help.

Another company in the recent accelerator, Cooklist, has launched an app that, when users download loyalty-card information, suggests recipes they can make with what's in their home, especially items close to expiration dates. Cooklist will pilot a program with Target in the first quarter of next year that will tie online shopping to the app.

While Target, one of the nation's top 10 grocery sellers, has set a goal to reduce overall retail waste by 70 percent by 2020, specific food-waste goals expected by the end of this fiscal year have not yet been released.

However, the retailer already is moving forward with strategies to cut waste, including waste-stream audits and an in-store tracking program to prevent wasted food at some of their stores, according to the spring GroceryWaste.com report by the Center for Biological Diversity and the "Ugly" Fruit and Veg Campaign.

The report also cites Target's efforts to discount produce close to its expiration date and increased donation and composting efforts. But it says it needs to do more, pointing to shopper-friendly strategies like Albertsons' app to help with meal planning and Walmart's in-store education initiatives.

The report and others such as one by Harvard's Food Law and Policy Clinic recommend a national standard be developed for "best used by" and similar labels put on food by manufacturers.

Producers generally say the date is when the taste of the food is at its peak. However, many consumers believe it is the date that food spoils, and they throw it away. Some state laws require specific foods to be thrown out by a certain date or prohibit donations of food based on "best used by" dates.

Regardless, the reports point to the need to educate consumers and spur them to use food before those stamped dates.

After some pilot projects in Canada, Domingues and his team used the time at the accelerator to build a plan for "scaling in a drastic way" in 2019 by partnering with grocery chains like Target.

One of his mentors in the program was Target CEO Brian Cornell, who helped analyze business strategies but was even more focused on how Flashfood could help low-income consumers, Domingues said.

Flashfood will conduct a pilot with Target at two St. Cloud stores and the SuperTarget in Monticello.

"This is one way to use reverse logistics to work toward zero waste," Domingues said.