How economic uncertainty is affecting the food upcycling business

Small-business owners across the country have felt the double whammy of inflation and slow hiring, all while a possible recession is looming on the horizon. But how do these worries play out for nontraditional businesses in larger sectors of the economy?

Take Matriark Foods, for example. It’s a social impact business that works toward sustainability in the food system through a process called upcycling. Its unique business has helped shield it from the harsh sting of inflation, but it certainly isn’t immune from its effects, the company’s boss said.

Marketplace’s Sabri Ben-Achour spoke with Anna Hammond, Matriark Foods’ founder and CEO, about her business and how it’s navigating this economic turbulence. The following is an edited transcript of their conversation.

Sabri Ben-Achour: So you are in the food upcycling business. What is the food upcycling business?

Anna Hammond: So upcycling is really making all food reach its highest value, which is feeding people. And upcyclers take food that would otherwise have gone to waste and they make products out of it. And that is anything from what we do, which is upcycling vegetable surplus and remnants, to upcycling spent grain from making beer.

Ben-Achour: Where does one get food remnants from, whether it’s the vegetables or grain from beer making?

Hammond: Yeah, so the supply chain for upcycled foods is really interesting. I like to say that we’re not doing something new, we’re doing something that people have done for thousands of years, which is use everything that’s grown and not throw it out. But in the last 80 years, our agricultural and food production system has created enormous amounts of inefficiencies from their efficiencies. So we, Matriark Foods, work with large fresh-cut facilities, which is where carrots, onions, celeries, cut fruit are made for all the grocery stores across the country. And if you imagine a bunch of celery, and you think about the celery sticks you buy in a grocery store, imagine all the celery that’s not there with those celery sticks. And we are working with these fresh-cut facilities to capture those remnants and really make them back into the food that they are instead of putting them into landfill.

Ben-Achour: And some of your food products that you make this way are carbon neutral or climate friendly. How is food climate friendly?

Hammond: So all upcycled food is climate friendly. And we work with the Upcycled Food Association to certify that the food we are using, the ingredients, some of the ingredients that we’re using, would otherwise have gone to waste. But we also have worked with Planet Forward to certify our products carbon neutral. And that means that we’ve done a complete life-cycle analysis of every ingredient that we use, from the packaging, to the vegetable, to the spices, to how far it travels to each facility to get produced. And when we come up with the final number with Planet Forward, they then have a carbon number that is attached to the food we’re making, and we buy offsets with a third party that’s growing forests, and we are then certified carbon neutral.

Ben-Achour: How’d you come up with this idea?

Hammond: [Laughs] You mean the idea of Matriark?

Ben-Achour: Yeah, of like recycling or upcycling food?

Hammond: Well, I have to say, I grew up in a family where we didn’t waste anything. My mother’s family were political refugees, and they came to this country with very little. So the mentality of not wasting was very present in my youth. But before launching this company, I built a healthy eating program for youth and families living in public housing in New York City. And part of that work involved brokering relationships with farmers in the Hudson Valley to get their surplus vegetables to these community centers, where kids were learning how to cook but had very little access to really good, healthy ingredients.

And there was just an enormous amount of food going to waste on farms, farmers needing extra income. And then all these people suffering from diet-related illness, wanting to make better food for their families, but not having access to it. And sort of the enormous amount of waste and the enormous amount of need really was the inspiration for launching Matriark. And really figuring out ways to utilize all of the vegetable and all of the vegetables that are grown, that use all the natural resources — you know, water, labor, land — to be made, and then that doesn’t make sense to throw them out. So that was really the inspiration for the business, was to create greater access for healthy food to all people and to divert waste from landfills.

Ben-Achour: You started this business during the pandemic. I mean, running a business is hard, especially early in the pandemic, let alone starting one. How did you do that?

Hammond: Well, it was a very interesting experience. But, you know, they say adversity creates all kinds of opportunity. And that definitely was our mentality all the way through. We actually launched the business a year before COVID started, built the product, developed the idea. And then we had our first order in the first week of March of 2020 for an entire pallet of our product. And the next week food service shutdown globally. So we worked, I mean, we did all kinds of things during the pandemic to continue the business, keep things going.

We worked with a large food service provider in New York City that had had to pivot also, and they were making food boxes for frontline workers, and asked us if we could create a small carton of our vegetable broth concentrate for those food boxes. So we did that. We had a grant from ReFED to make a healthy stew out of half a million pounds of vegetables that were being disked for canceled contracts. And we did that in collaboration with the largest food bank in northern New Jersey, Table to Table. But I have to say, it really reinforced that we were doing actually what we set out to do even more intensely during COVID, which was to get food to people in need and utilize our resources to their to their best advantage.

Ben-Achour: Surveys show the No. 1 problem or concern for small businesses is inflation right now. How has that played out for you? Have you had to raise prices? Or is your supply chain kind of unique in not being exposed to that?

Hammond: I don’t think there’s any supply chain that’s immune to inflation, unfortunately. But I think that the nature of our supply chain certainly means that some of our ingredients are less than they would be if we were using firsts or not using remnants. But I also think that the increased awareness of food waste as a negative environmental impact, in addition to the increased awareness around hunger worldwide, really just brought more attention to what we were already doing. And so I would say for us, there has been an increase in activity for our business because of COVID. There’s just no one you encounter who doesn’t know what food waste is, who doesn’t understand that hunger is an issue and who doesn’t want to do something positive for the environment.

Ben-Achour: Yeah, I mean, that ties into labor. Finding workers has been a challenge too for a lot of businesses, just because they need labor, they need help, but at that same time, they don’t know where the market’s going. And at the same time, it’s hard to find people. What about you guys? Have you had any trouble finding people?

Hammond: We haven’t had trouble finding people. I mean, I think what we’re doing is of great interest, not only to young people entering the workforce, but to people who’ve been in the workforce a long time and want to do something kind of that has a sense of urgency to it, as our environment certainly does. I think in an interesting way for us, the labor issues that our customers are experiencing has created an opportunity for dialogue with them about what kinds of products we can make that can help with some of their labor issues. So for example, in food service, scratch cooking is great if you’ve got labor and you’ve got time, but if you have a labor shortage, you need to really have things that are easier and more quick to make. So we’ve actually been doing some product development around additional products that can help with labor issues.

Ben-Achour: What’s the next step for you in terms of growth, especially at a time when people are worried about recession?

Hammond: When there’s a recession, people are more careful with what they eat and how they spend their money. And so when you have a company that is creating products that make labor easier, and additionally are good for the environment, which is on everyone’s mind, it’s kind of focused the lens on wasting less. Sometimes a recession can be good for — a belt-tightening isn’t always a bad thing. And I’m not saying that without respect for the difficulty it creates in people’s lives, but it does make people think much more carefully about their use of resources. And when we’re talking about the environment and food, that’s a good thing.

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