As Imperfect Produce grows, so do challenges for farmers
CHICAGO — Megg Principe first learned of Imperfect Produce, a Silicon Valley startup that aims to tackle food waste by selling boxes of "ugly" produce, via Facebook a few months ago. She noticed friends posting photos online of their misshapen fruits and vegetables and decided to give it a try.
"My big thing was food waste. We have so much in America," said Principe, a 37year-old makeup artist who lives in Chicago's Lakeview East neighborhood.
But as Imperfect Produce has surged in popularity in the Chicago area and nationally, some smaller local farmers have watched the deeppocketed newcomer with wariness and resignation. For years, farmers have been selling imperfect produce in boxes. It's a practice known as community supported agriculture, or CSA, and it operates as a subscription service of sorts for fresh, local produce. But despite the still burgeoning farm-to-table movement, sales directly to consumers and at farmers markets have flattened or declined for many small farmers in recent years as larger grocery chains increasingly market local and organic produce, said Cliff McConville, chairman of Band of Farmers, a coalition of about 45 farms that offer CSA shares in the Chicago area.
"There are many challenges facing small farmers and CSA and this (Imperfect Produce) looks like another one," said McConville, owner of All Grass Farms in Kane County.
McConville estimated that the farmer members of his coalition have seen their CSA sales decline, on average, about 20 percent year over year since 2014, forcing some farms to close.
The growth of Imperfect Produce, meanwhile, has been "pretty meteoric" since launching three years ago, said Derek Gordon, chief operating officer for the privately held company, who declined to provide volume or dollar sales figures to illustrate that growth. The startup operates in seven cities, soon to be eight when it launches in San Antonio on Monday. Its 30,000-square-foot distribution center in Northlake serves all of Chicago and the collar counties, in addition to Milwaukee and Indianapolis.
Earlier this summer, Imperfect Produce opened a financing round of up to $30 million, Gordon confirmed, declining to comment on previous rounds of financing.
Imperfect Produce sources some of its produce locally, Gordon said. Currently, the company partners with 25 farms in the Midwest, including three in Illinois. But in order to meet growing demand with maximum efficiency, Imperfect Produce has to work with farms large enough to provide an ample amount of imperfect produce.
And the bulk of the food distributed by Imperfect Produce still comes from California, Gordon said. In peak growing season in the Midwest, about half of the produce distributed in Chicago will come from Midwest farmers, he said, and the rest from California and Mexico. But in the winter, much less will be sourced from the Great Lakes region, he said
Some critics of Imperfect Produce have accused the company of making profit off food that otherwise would have gone to food banks. That doesn't appear to be the case in Chicago. Since launching in this market in December, Imperfect Produce has donated more than 140,000 pounds of produce to the Greater Chicago Food Depository, which distributes to food pantries and shelters throughout Cook County, said Jim Conwell, the food bank's spokesman.
As for the company's impact on community supported agriculture, Gordon said he doesn't view small farmers as competitors.
"We all have a part to play in the mission to reduce food waste," he said. "We're just trying to play our part."
Consumers may need to prioritize which mission they support most, though _ reducing food waste on a national scale or supporting struggling fruit and vegetable farmers locally. Tom Rosenfeld, founder of Earth First Farms, a southwest Michigan apple farm that distributes in Chicago, said he strongly supports the idea of fighting food waste and likes Imperfect Produce's model for doing so. But he hopes Imperfect Produce eventually partners with more local growers.
"I don't want to sugarcoat it," Rosenfeld said. "It's a hard situation small farmers are in. It's not a very viable profession right now."
Buying produce grown locally cuts down on the time between harvest and consumption, a difference that can help both the taste and the nutritional value of the food, said Irv Cernauskas, co-founder of Irv & Shelly's Fresh Picks, a Niles-based food hub that recently formed an alliance of regional farmers to distribute produce in the Chicago area.
It's also a boon to the local economy, he said.
"Unlike Amazon, we don't have the big data. But we're certainly seeing an impact" to sales from the launch of Imperfect Produce, Cernauskas said.
One benefit that Imperfect Produce could have for all farmers is in educating consumers that produce doesn't need to be uniformly perfect in appearance in order to be nutritious and delicious, said Emily McKee, an assistant professor for Northern Illinois University's Institute for the Environment, Sustainability and Energy.
McKee has some concerns about Imperfect Produce "undercutting" farmers, but said she would need to study its business model more to fully understand that scenario.
"We certainly have a major problem with food waste and I'm glad someone is trying to do something about it," McKee said.
Joy Miles, a 45-year-old Pilates trainer and fitness coach who lives in Edgewater, pays about $19 every two weeks for a customized box of fruits and vegetables from Imperfect Produce. She wishes the company was more specific on when the boxes will be delivered, but otherwise said she likes the produce and the mission behind it.
Miles used to to participate in a CSA with a local farm, but she kept getting turnips in her box.
"There are only a few vegetables I don't like and those are the things I kept getting," Miles said.