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Are "ugly produce" startups good?

At first, I thought Imperfect Foods was a perfect fit for my lifestyle, wallet, and morals. Then I remembered they're a VC-funded startup.
Published onJun 14, 2021
Are "ugly produce" startups good?

At the start of the pandemic, my wife and I started ordering from Imperfect Foods, one of the many “ugly produce” startup services that claims to be saving the planet from the very real scourge of food waste. It seemed like a perfect fit for our lifestyle, wallet, and morals: it would minimize our need to make potentially dangerous trips to the grocery store, save us a little money, and lessen our personal environmental impact, all at the same time.

That convenient narrative worked on me for a while, until I started paying a little more attention to the company’s branding and noticed a familiar, and uncomfortable, pattern. Like so many modern subscription services, Imperfect’s user experience is incredibly well thought-out. The pink cardboard boxes themselves thank you for eliminate greenhouse emissions, and serve as advertisements for your neighbors to do the same. The house-branded “upcycled” products contain cute stories about the the food you’re “saving” from a life in the landfill. A generous referral program makes it easy and rewarding to recommend the service to your friends. In other words, I started to feel like I was being growth hacked. So, after a few months of denial, I Googled.

As is so often the case with startups that promise to disrupt existing systems, the real story is far more complicated than the slick marketing would have you believe. Unsurprisingly, there’s no shortage of criticism of the services, including the most well known piece, a 2019 Vox interview with crop scientist Sarah Taber.

In the interview, and the Twitter thread that spawned it, Taber essentially argues that the business model of Imperfect, Misfit Foods, etc. is actually just marketing:

People now panic if they don’t know where food comes from, and the constant messaging about how you “should” be reinforces the anxiety. Any time people are having these anxieties, marketers take advantage of it. But the market-based solutions that marketing endorses don’t fix the root cause.

In fact, Taber and others argue that the food system is already incredibly good at maximizing profit, and that the problems that truly lead to food waste, like labor issues, can’t be solved by the market alone. According to other critiques, the ugly produce movement may even be exacerbating the environmental problems it claims to solve by incentivizing farmers to grow more food than they need to. I haven’t come across a solid economic analysis of the ugly produce economy yet, but I wouldn’t be surprised if that were the case.

In the end, Taber believes the ugly produce movement is inherently classist, because it assumes that any food that doesn’t show up at top-tier stores must be going to waste, rather than, as she argues, sold at discount grocery stores frequented by working class consumers or repurposed for other downstream uses like salsa, smoothies, or animal feed. If the story of disruptive startups creating classist parallel systems to perfectly functional alternatives sounds familiar, it’s because that’s the exact story of Uber, which gained a toehold by marketing itself as a superior, and more exclusive alternative to public transit and regulated taxis that all the riff-raff could use. It’s true that ordering a taxi on your phone is an improvement over hailing a cab in the old days, but the price for this convenience appears to be more pollution, more congestion, worse public transit, and replacing decent local taxi jobs with Uber’s anti-competitive, and barely-above-poverty-level wage-fixing scheme.

To be fair, the nation’s food system is far more complex than its for-hire transportation networks, and it’s not clear yet what effect the ugly produce movement is having. Because we do waste so much food, Taber says you shouldn’t feel bad about using ugly food services if they suit you. You just shouldn’t be fooled into thinking you’re doing much good over going to the grocery store. For now, I’m continuing to get a weekly box because it saves me a trip to the store, though I’d replace it with my local CSA in a heartbeat if there wasn’t already a giant waitlist.

The lesson, then, for consumers like me is to always take promises of disruption with a grain of upcycled celtic grey sea salt. It’s worth remembering that markets are, for all their shortcomings, typically incredibly efficient distribution machines. Any company that promises to improve an established market’s efficiency must prove it with more than press releases and self-published “studies.” Otherwise, they’re likely rent-seeking, creating unsustainable and destabilizing conditions by subsidizing themselves with VC funds, or using fancy marketing and growth hacking techniques to hawk the same old rotten eggs.

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