This Young Entrepreneur Is Using AI To Fix The Food Supply Chain And Reduce Food Waste

Key Concepts

• Food Waste: The significant problem of food being lost or discarded before consumption.
• Shelf Life Prediction: The core technology developed by Strella to estimate the remaining usable life of produce.
• Ethylene Gas: A plant hormone produced by fruits and vegetables that indicates maturity and is a key measurement for Strella.
• Machine Vision: The use of cameras and image analysis to assess produce ripeness and quality.
• Supply Chain Optimization: Improving the efficiency and effectiveness of the food distribution process.
• Post-Harvest Solutions: Technologies and strategies applied to produce after it has been harvested.
• ROI (Return on Investment): The financial benefit a customer or investor receives from a product or service.
• Shrink Reduction: Minimizing losses due to spoilage or damage in the supply chain.
• Generative AI: Artificial intelligence that can create new content, used by Strella for rapid prototyping and market research.
• B2B (Business-to-Business): Strella's focus on serving other businesses rather than individual consumers.
• Automation: The use of technology to perform tasks previously done by humans, particularly in the food supply chain.

Strella: Predicting Produce Shelf Life for Supply Chain Optimization

Katherine Sysov, co-founder of Strella, discusses her company's mission to combat the pervasive issue of food waste and quality degradation in the produce supply chain. Strella addresses the common consumer frustration of encountering produce at suboptimal ripeness or experiencing rapid spoilage after purchase.

The Problem of Food Waste and Quality

• Magnitude of Waste: A staggering 40% of food is wasted before it is consumed. This statistic, which Sysov encountered during her research, served as a primary motivator for founding Strella.
• Consumer Experience: Consumers frequently face issues with produce ripeness in grocery stores and rapid spoilage at home, highlighting a disconnect in the supply chain.

Strella's Solution: Data-Driven Shelf Life Prediction

Strella's approach involves integrating more data into the produce supply chain to predict shelf life and inform better decision-making.

• Core Technology: Strella employs a combination of sensor technology, machine vision, and supply chain insights to predict the ripeness and remaining shelf life of perishable products.
• Post-Harvest Focus: The company operates in the post-harvest phase of the supply chain, dealing with produce after it leaves the farm.
• Example: Apples: Apples can spend up to a year in storage before reaching a grocery store. Strella's technology helps packers identify which apples are best suited for long-term storage and which should be moved first, optimizing inventory management.

The Technical Process of Shelf Life Prediction

Strella's technology accounts for the unique physiological characteristics of different produce items.

• Ethylene Gas Measurement: Many fruits and vegetables produce ethylene, a hormone that signals maturity. Strella's sensors measure ethylene gas levels to gauge ripeness.
  • Kiwi as a Benchmark: Kiwis are highly sensitive to ethylene, making them a valuable "gold standard" for calibration.
• Machine Vision: Cameras are used to observe visual cues like color changes (e.g., a banana turning yellow) to assess maturity.
• Sensor Technology: Strella utilizes a "brick-sized" sensor device that can be deployed in various supply chain environments. These sensors measure ethylene and other critical environmental factors affecting produce.
• Integrated Data Collection: Cameras and other sensors are strategically placed throughout the supply chain to gather comprehensive data.
• Example: Banana Ripening: In banana ripening rooms, Strella's sensors monitor ethylene production and environmental conditions. This data allows for automatic adjustments to optimize the ripening process, ensuring consistently perfectly yellow bananas reach store shelves.

Challenges in the Produce Supply Chain

The food supply chain, particularly post-COVID, has faced significant disruptions and inherent complexities.

• COVID-19 Impact: The pandemic highlighted the fragility of supply chains and the potential for stockouts, emphasizing the need for greater resilience.
• Industry-Wide Challenges:
  • Importer/Exporter Market Volatility: Fluctuations in international trade create uncertainty.
  • Crop Environment Instability: Climate change and adverse weather conditions directly impact agricultural output.
• Investment Landscape: The agricultural sector presents unique investment challenges due to long growth cycles (e.g., five years for fruit to mature on a tree), requiring "slow, patient capital" which is less common in traditional venture capital.

Building Strella: Team and Technology Development

Strella's success is attributed to a multidisciplinary and dedicated team.

• Team Composition: The team is described as "full stack" and includes:
  • Electrochemists: For sensor fabrication.
  • Post-Harvest Physiologists: Experts in produce biology and behavior.
  • Developers and Data Scientists: For software and AI development.
  • Mechanical Engineers: For hardware design and implementation.
  • Industry Insiders: Individuals with deep roots in the produce industry who understand customer needs and decision-making processes.
• Team Size: Currently 27 people.
• Development Journey: The focus has been on tackling the biggest problems incrementally, starting with acquiring good data inputs for their models and then refining those models with collected data.
• Founder's Path: Sysov initially aimed for graduate studies in neuroscience but found the research path too long. Her discovery of the 40% food waste statistic redirected her focus.
• Leadership Challenges: The primary challenge in leading Strella is managing people, which is also the most rewarding aspect due to their unpredictability and the human element.

Growth and Future Vision

Strella aims for significant growth and impact in the coming years.

• Technological Advancement: The goal is to "do more with less," enabling a small team to achieve substantial impact through efficient use of tooling.
• Financial Backing: Strella has secured approximately $19 million in funding, primarily through a Series A round from generalist VCs.
• Investor Pitch Strategy: Strella focuses its pitches on business fundamentals: driving margins, customer benefits, and ROI, rather than solely on sustainability.
  • Rationale for Business Focus: Sysov believes traditional venture capital has not fully embraced sustainability as a primary investment driver. Therefore, framing Strella as a profitable business that reduces costly food waste is more effective.
• Customer Acquisition: Partnerships are built through traditional, in-person relationship building within the food and agriculture industry.
  • Partnership Approach: Strella acts as a partner, understanding customer pain points (e.g., tomato spoilage, banana quality issues) and assessing how their technology can provide a solution.
• Global Operations: Strella operates in 26 countries. While produce varieties differ, the core technology is broadly applicable.
• Market Adaptations:
  • Europe: Greater emphasis on sustainability in pitches.
  • US: Focus on optimization and efficiency.
• Gen Z's Impact: Sysov notes that Gen Z's strong focus on sustainability is a positive force, challenging the misconception that sustainability is not profitable. She believes sustainable solutions inherently drive optimization and lead to more elegant outcomes.
• AI's Role: Generative AI has significantly accelerated Strella's "zero to one" phase, enabling rapid MVP development, market research, and customer feedback loops.
• Early Steps: Sysov utilized pitch competitions and business plan competitions with deadlines to create self-imposed structure and drive progress, likening it to "homework" that ensures tasks are completed.
• Hindsight and Beginner's Mind: While acknowledging the benefits of hindsight, Sysov values the "beginner's mind" that comes with inexperience, allowing for unique approaches and fewer preconceived limitations.
• Advice for Female Founders: Sysov advises authenticity, demonstrating genuine care for one's work, and a commitment to making a positive impact, especially in male-dominated industries like manufacturing and technology.

Competitive Landscape and Differentiation

Strella operates in a space with competitors, but emphasizes its unique strengths.

• Competitors: Include chemical treatments to extend shelf life.
• Complementary Relationships: Strella often works alongside chemical solutions, though direct competition for funding can occur.
• Key Differentiators:
  • Agility and Innovation: Strella's small team allows for rapid adaptation and product adjustments based on customer feedback.
  • Non-Intrusive Approach: Strella prefers to optimize the supply chain process rather than directly altering the food itself, aligning with a "food is food" philosophy.

The Future of the Food Supply Chain

Sysov predicts a significant shift towards automation in the food supply chain.

• Current Reliance on Expertise: The current system relies heavily on experienced individuals with niche knowledge (e.g., "banana ripeners" who use sensory evaluation).
• Need for Automation: As this specialized human expertise may diminish, automation will be crucial for maintaining consistency and efficiency in the food supply chain.

Customer Engagement and Visualization

Strella is developing tools to make its data more accessible and understandable to customers.

• Interactive Platform: The need for a tangible platform where customers can interact with and understand the data is crucial, as algorithms can be abstract.
• Customer Tools:
  • Banana Ripeness App: Allows users to photograph a banana and receive an assessment of its ripeness and whether it's on track.
  • Performance Dashboards: Provide stakeholders with visualizations of ripening performance over time.
• Public App Potential: While Strella is primarily B2B, the possibility of a public-facing app for consumers is acknowledged, though it represents a different market strategy.