AI-powered grocery management platform Afresh today raised $13 million in funding, a figure that a source tells VentureBeat values the company at over $100 million. The company says the capital will enable it to expand its product across functions including supply chain, store operations, and merchandising for all food categories after a year in which it doubled the size of its workforce,
Grocery stores are responsible for an estimated 10% of all U.S. food waste, which amounts to 43 billion pounds annually. According to the Guardian, the food supply chain wastes 45% of all produce, 35% of seafood, 30% of cereals, and 20% of meat and dairy products every year. Additionally, the Environmental Protection Agency estimates that food containers and packaging make up 23% of landfill waste.
Afresh, whose customers include Fresh Thyme Market, WinCo Foods, and Heinen’s, aims to combat this with solutions that optimize merchandising, ordering, and operations for fresh departments in supermarkets. The platform’s AI-based engine helps with decision-making by detecting issues to automate as much as possible while engaging associates when necessary.
Essentially, Afresh analyzes customer purchase data and forecasts product demand, taking into account headwinds like pandemic-related runs on pork and beef products. Retail managers can then use the platform to order the exact amount of fresh food they’ll need.
Afresh says it trains its machine learning models, some of which have been peer-reviewed in academic journals, on hundreds of millions of data points and thousands of features. The models attempt to predict the distribution of events along a probability spectrum, generalizing to rare events (like the pandemic) even with limited historical data.
“Our algorithms optimize customer objectives through a probabilistic, data-driven model of the future. Our flagship product enables grocers to optimize the amount of perishables they carry at any given time in any given store,” Afresh explains on its website. “We combine human-centric AI, intentionally designed workflows, and holistic systems designed to address the complexities of the fresh food supply chain that past systems simply can’t handle.”
Afresh claims that stores using its suite reduce food waste by 25% or more and see 2% to 4% top-line revenue growth and a 40% increase in produce operating margin. The company also says that each produce team member who uses Afresh saves 1-2 hours per week or more.
Afresh has competitors in Crisp, which uses data and AI to offer a similar service to grocery store customers. Online grocer Farmstead is also built around algorithms that help it predict and better manage its inventory.
But Afresh says its backers are enthusiastic about the future. Innovation Endeavors, Maersk Growth, and Baseline Ventures, who participated in the series A announced today alongside lead investor Food Retail Ventures, all previously invested in the company.
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