Why We Invested in Afresh

We are thrilled to announce that VMG Catalyst was able to co-invest as part of a $115M Series B investment into Afresh, the innovative AI-powered fresh food technology provider, alongside Spark Capital, Insight Partners, and others.

Afresh set out to do something ambitious — to fundamentally transform the way fresh food is sold by radically improving retailers’ ordering, merchandising, inventory, and operations.

This is a problem we were well familiar with — the grocers and retailers that our ecosystem and our Growth brands sell to every day consistently told us that fresh is the most critical department in the store today, but one of the hardest to manage. Legacy software is designed to handle center-of-store items with predictable form factors and shelf lives. Perishables offer a variety of unique challenges to grocers, including but not limited to:

• Inventory changing over time vs. staying fixed — produce goes bad faster than expected or gets damaged in transit, for example.
• Perishables coming in all sorts of form factors — not just boxes or cartons, but in heads of lettuce, bushels of apples, bags of carrots.
• Shorter shelf lives that make it harder to order the right amount of supply to match demand fluctuations and seasonality

Collectively, this results in far higher food waste for retailers and lower quality items for the consumer.

Afresh helps solve this by leveraging AI to revolutionize the way stores order fresh today. The software guides store-level workers to the correct amount of inventory to order based on a back-end demand forecasting algorithm and inventory forecast. Afresh develops these forecasts by leveraging a wide range of data to generate powerful results.

On average, stores using Afresh reduce food waste by 25% or more. They also see a 2–4% increase in top-line revenue growth and have a 40% or more increase to their produce operating margin.

Over the last year, Afresh has proven this out for a wide array of grocery chains, including Albertsons, Fresh Thyme, WinCo, Heinen’s, and Cub Foods. Already, Afresh is on track to help retailers save 34 million pounds of food waste by the end of 2022.

In the years to come, Afresh plans to deploy this revolutionary technology to the broader grocery industry and fresh food supply chain, allowing anyone who buys or sells fresh to leverage the Company’s sophisticated AI to drive dramatic savings and reductions in food waste. We couldn’t be more excited to partner with Afresh as they transform the fresh food industry.