The FDA estimates that food waste comprises a whopping 30-to-40% of the total U.S. food supply. That amount of waste goes from shocking to tragic when you consider how COVID-19 has increased food insecurity in some of the most vulnerable communities across America. The Upcycled Food Association was recently created to help address this issue by encouraging the creation of food products with otherwise-wasted materials.
And that’s exactly what Renewal Mill is setting out to do. This Deal to Watch wants to address food waste and climate change by working with food producers and creating consumer products with food matter the producers don’t use. We spoke to founders Claire Schlemme and Caroline Cotto to find out how they met and what their vision for upcycled foods is.
Note: This interview was conducted over phone and email. It has been lightly edited for clarity and length.
Can you give us a brief elevator pitch for your company?
Claire: Renewal Mill is an award-winning next-generation upcycled food company that fights climate change and global food loss by upcycling byproducts from food manufacturing into premium ingredients and delicious products. We’re building a new circular economy of food that’s better for the people and the planet we love. Our flagship ingredient is organic okara, a high fiber, high protein, gluten-free flour made from the nutritious soybean pulp leftover when you make soymilk. We use the okara in a number of plant-based products including a vegan, soft-baked chocolate chip cookie, a 1-to-1 gluten-free baking flour, and an upcycled brownie mix. We can be found in 85+ markets in California, online platforms like Good Eggs, Amazon, and Imperfect Foods, and at www.renewalmill.com. Our okara flour is a co-branded ingredient in Tia Lupita’s newest tortilla and Pulp Pantry’s grain-free chips. The company is led by two go-getter women: Caroline Cotto, who currently serves as board president of the Upcycled Food Association, and Claire Schlemme, who was recently named a 2020 Tory Burch Fellow.
What inspired you to take the leap and build this company?
Claire: My lifelong interest in food and nature began to intertwine when I was diagnosed with cancer in my early 20s. This experience made me passionate about understanding the links between food and health, both for our environment and our own bodies. As a result, I co-founded Boston’s first organic juice company with the aim to connect local farmers and city-dwellers through nutritious and delicious foods. This experience, however, exposed me to a huge new challenge: food waste. Every day, we were throwing away mountains of nutritious fruit and vegetable pulp, which hurt from an environmental and an economic perspective. Soon after, I had a fortuitous meeting with the owner of the third largest tofu company in the country and explained that he was having an analogous pulp waste problem in his operation, just at massive scale. That’s when the lightbulb went off: what if there were a way to prevent food waste and keep all this valuable nutrition in the human supply chain? And, Renewal Mill was born as a solution at the intersection of food, sustainability, and accessible nutrition.
What past experiences prepared you to start, build, and lead your company?
Caroline: Renewal Mill leverages all of Claire’s strengths — as CEO, she combines her analytical mindset (honed by her time as an environment consultant with a MA in environmental management) with the scrapy, no-job-too-small attitude of a serial entrepreneur. Prior to Renewal Mill, Claire had previously co-founded The Outrage, an online and pop-up feminist marketplace that blended design and activism, as well as Boston’s first organic juice company, Mother Juice. These experiences in food, sustainability, and e-commerce inform Renewal Mill’s daily work.
My background was more on the nutrition side of things. I worked for Michelle Obama’s Let’s Move! childhood obesity initiative at the White House and the UN World Food Prgramme in Cambodia, before jumping into tech. I ran the women’s diversity program globally for HubSpot — a publicly traded SaaS company — before turning my attention back to food. Directly before Renewal Mill, I worked for the inaugural Techstars Farm to Fork accelerator sponsored by Cargill and helped incubate ten companies along the food supply chain. This experience exposed me to all sorts of different leadership techniques and growth methods. At Renewal Mill, we steal like artists and combine the best of what we’ve seen.
What is your vision for the future of the industry you are operating in?
Caroline: As we speak, Renewal Mill is playing a key role in a new trade organization — the Upcycled Food Association — which is developing an upcycled product certification. Our vision is to make “upcycled” as recognized and valued as “organic,” so that consumers have the transparency and trust they need to choose upcycled products for every meal of the day. We want food manufacturers, big and small, to reach for upcycled ingredients as their first choice, and in doing so drive a massive reduction in global food waste until we’re using all of the food we produce and living in a post-waste world.
Who is on your team and how did you come together?
Caroline: Claire and I literally met in a canoe. I was working for the Techstars Farm to Fork accelerator on the inaugural food program, and Claire and I were seat mates in a twelve person canoe on a Minneapolis lake. It’s cliche, but after a few hours of chatting, we immediately hit it off and knew that we were paddling towards the same goal. Renewal Mill is the result of our shared vision to drastically improve the efficiency of today’s food system, ensuring that 100% of the food we produce is put to its best & highest use — feeding people. We’re a lean, all-female executive team, with Claire as CEO and me as COO. We’re joined by operations staff and the incredible 5x James Beard Award Winning cookbook author Alice Medrich who leads our product development.
Do you have any competition, if so, how do you differentiate?
Claire: While there are other upcycled food companies, we don’t view these companies as sales competition. Given the massive opportunities in this space (and as evidenced by the newly formed trade group Upcycled Food Association), we believe that a rising tide lifts all boats. As such, our biggest competitors are the ingredient suppliers for near-substitutes for our flagship ingredient okara, such as coconut flour and cassava flour. Similarly, because okara is often utilized to achieve high fiber product claims, an additional competitive set is the group of isolated fiber additives, such as chicory root fiber.
That said, Renewal Mill does differentiate itself in the upcycled space through its focus on end-consumer engagement, supply chain transparency, and delivered value to byproduct manufacturers. We engage directly with consumers through our retail products (cookies, baking mixes, etc.), which allows us to educate customers and generate interest in our new ingredients.
Our ingredients are traced through the entire co-location production process so the end product can be linked to the source of the ingredients/byproducts. And, we track our environmental metrics and provide this information back to the byproduct manufacturers for use in their own marketing and regulatory processes.
What does your business model look like?
Caroline: Our model allows us to reduce global food waste and increase affordable nutrition in our food system through the utilization of the millions of pounds of byproducts that are wasted each year. Specifically, we co-locate our processing equipment at the manufacturing facilities producing byproducts to ensure food safety and maintain cost competitiveness. We then sell the finished ingredients to our B2B customers, which are CPG companies looking for clean label, trending, sustainable ingredients. Our organic okara flour is made from the soybean pulp generated when soymilk is made. Okara flour is a high fiber, high protein, and gluten-free flour that delivers superfood nutrition at mass market prices.
To demonstrate the possibilities and versatility of upcycled ingredients, we also use our ingredients in our own branded CPG products to raise brand awareness and generate immediate revenue. Our current product line includes organic okara flour, a gluten-free 1-to-1 baking blend, a vegan okara chocolate chip cookie, and an upcycled brownie mix. The products are sold direct-to-consumer via e-commerce and to retail markets. Our CPG business functions as a revenue-generating marketing department as well as a source of data to leverage in growing B2B ingredient sales.
Ultimately, our technology and process are applicable to a number of byproduct streams. Starting with okara, Renewal Mill is on a journey to create a new circular economy of food by becoming the first upcycled multi-ingredient platform.
What brought you to equity crowdfunding and how do you intend to use the money you raise this round to scale the business?
Claire: We’re excited to be opening this next fundraise to crowdfunding because of the community aspect of what we’re building. We’re still in the early days of the next emerging food megatrend of ‘better for you, better for the planet,’ and we see tremendous value in bringing together a large team truly invested in advancing the mission of upcycled food. (And who of course also see the financial upside to being in the right place at the right time with the right company!)
We’ll be using the money from this round for two purposes: first, to commercialize our second ingredient, upcycled oat flour, made from the oat pulp leftover when oat milk is made. We are in the final stages of bringing oat okara to market and are aiming to have a pilot product in the market by the end of 2020 through a partnership with Barilla. Second, to accelerate the distribution of our CPG products. We now have distribution with UNFI and are looking to move beyond our 85+ market reach in the Bay Area. Additionally, we are growing our e-commerce business through our website, Amazon, and other platforms.
What do you want potential investors to know about you and/or your company?
Caroline: Not everything worth investing in is a software company with MRR and an attractive LTV:CAC ratio. We’re a mission-driven public benefit corporation committed to something larger than ourselves: food system revolution. The upcycled food movement requires the education and mindset shift of millions. Thanks to the work of Renewal Mill, we’re seeing forward progress on this front with some of the world largest food companies, including Mondelez and Nestle, getting on board to fight food waste. It’s not too late — now’s the time to get on board and help transform the future of food so that you can look back 30-50 years from now and know that you did everything in your power to preserve the health of our planet for the next-generation.
As you think about the business 5-10 years down the road, what do you see exit opportunities looking like? Have you set any future goals for the company?
Claire: We’ve been at the forefront of the upcycling movement for half a decade. And we’re going to continue leading this burgeoning industry which is really gaining momentum as we see the very real effects of climate change and food waste inaction around us. We’re hoping to grow the company and eventually will be looking for an exit opportunity, potentially an acquisition by a larger ingredient house as their upcycled ingredient arm. Our goal is that food companies of all sizes will be incentivized to source upcycled ingredients whenever possible, significantly reducing global food loss and helping slow or reverse the climate crisis.
We at KingsCrowd are excited to see where Claire and Caroline take the company. Renewal Mill is currently raising on Republic.
About: Olivia Strobl
Olivia comes to KingsCrowd with a background in venture capital and technology. She spent time at Glasswing Ventures, an AI-focused venture fund in Boston, before joining the KingsCrowd team. There she helped develop machine learning algorithms for the opportunity qualification of preseed and seed-stage startup companies. Prior to her time at Glasswing, Olivia worked in a lab studying the neural correlates of attention. She holds a degree in Neuroscience from Wellesley College.