Get The Memo: Issue 12
Ryp Labs
Company Overview
Every year up to 50% of all food produced worldwide goes to waste. This amounts to over $2.6 trillion in losses, including $700 and $900 billion in environmental and social costs, respectively. The average U.S. household loses $1,866 annually to food waste, $500 of which is attributed to fruit and vegetable waste alone. Post-harvest losses (PHLs) of agricultural produce during storage, distribution, and retail result in a significant portion of the economic and environmental burden. Post-harvest diseases (PHDs), such as fungal spoilage, are one of the major causes of PHLs, resulting in estimated direct economic losses of more than $200 billion per year worldwide. The presence of PHDs can affect the quality and reduce the shelf life of fresh produce. Many fungi causing PHDs have developed resistance to synthetic fungicides. Furthermore, importing countries have enforced strict regulations limiting the minimum pesticide residue levels present in the edible portion of the fresh produce. Additionally, more consumers are gravitating towards non-GMO and organic fruits every day, which are typically even more susceptible to spoilage.
Ryp Labs, formerly StixFresh, has developed a formulation that can be applied to a variety of surfaces, including stickers, sachets, and sheets, to increase the shelf life of produce. Their food-safe sticker, StixFresh, can extend the shelf life of fresh produce by up to two weeks, by simply peeling and applying the sticker to the produce. Their sachets and sheets formats, Shelf Defense, can be placed in clamshells and other container formats to protect smaller fruits such as berries and grapes from premature rotting. These simple yet effective solutions can be used at any point along the produce supply chain including post-harvest handling, storage, processing, packaging, distribution, retail, and the end-consumer stage. All material, including stickers, can be recyclable, compostable, and biodegradable.
Ryp Labs’ founder, Moody Soliman, is an experienced entrepreneur and startup founder with more than 15 years of experience in the Medical Device, Biotech and AgTech industries. At Ryp Labs (formerly known as StixFresh), Moody is leading a highly talented and passionate team, developing and commercializing biomimicry solutions to combat global food waste, naturally and safely. Their technology has been shown to keep fruit fresh up to 14 days longer, helping us to shape a safer, more sustainable food supply chain future.
Along with his co-founder, Steve Hulteng, they have more than 40 years of combined experience in highly regulated, high-tech industries, including aerospace, medical device, and biotechnology. In 2012, Steve and Moody met when the Seattle-based medical device startup where Steve was working was acquired by a Fortune 100 company located in Minneapolis where Moody was employed. During this acquisition period, they were tasked with managing and leading the transfer of four FDA-approved, Class III medical device product manufacturing lines from Seattle to Minneapolis, successfully accomplishing the effort within the 2-year timeline and $800,000 under the allocated budget.
Market, Model & Inflection Point
Every year, from farm-to-fork, over $1 trillion of food is goes to waste. On average, 10–20% is due to post-harvest disease, resulting in a $100B market opportunity. Individually, it is estimated that the average U.S. household loses $1,866 annually to food waste, $500 of which is attributed to fruit and vegetable waste alone.
Some of the key competitive advantages and differentiating characteristics of our technology are:
1. It works in the vapor-phase, and therefore does not require direct contact
2. It prevents premature rotting while allowing the produce to mature and ripen naturally
3. It fits within the post- packaging supply chain with minimal disruption
4. It can be applied in a variety of product formats.
5. There is strong possibility that Ryp Labs’ technology can be used as a complementary technology with most of the existing solutions.
Food losses are experienced across the entire supply chain, from farm to end-consumer. Although their technology will have the unique potential to be applied anywhere along the supply chain, Ryp Labs’ primary target customers are the packers and distributors segment. Based on primary and secondary market research, this is where the highest wastage rates are experienced, and where fresh produce is processed in large/centralized warehouses that pack and distribute millions of fruits per day.
To-date, Ryp Labs has garnered a pipeline of 131 customers from 61 countries, across 6 continents, that have expressed interest in their technology. The customers include distributors, retailers as well as food-packaging manufacturing companies that want to incorporate their technology into their existing product line given the value-add it will provide their customers.
By 2050, it is estimated that the Earth’s population will surpass 9 billion people. This growing population will further stress our food systems, natural resources, and ecosystem. Considering that 30–50% of all food produced goes to waste, it is imperative that we find innovative and effective solutions to reducing this global epidemic today.
Competition
Two primary factors contribute to the deterioration of fresh produce:
1. Ripening due to respiration, and in some cases ethylene production
2. Pathological damage due to pre- and post-harvest diseases.
To control ripening, there are numerous solutions on the market such as respiration limiting coatings or 1-MCP (ethylene antagonist) based solutions. As for disease control, synthetic chemical fungicides, and pesticides in addition to climate-controlled environments are employed whenever possible. Additionally, coating-based technologies, require intensive capital equipment investments. Ryp labs has identified the top 8 market competitors that fall within one of the categories, and highlighted the key differentiating factors between them and their competitors, as illustrated in the figure below:
How would you deploy capital if you would hit your next milestone?
1) R&D, Product Development and Operations (~50% of capital):
a. Develop dose-response curves to improve product design
b. Optimize bioactive delivery system to cover multiple use cases
c. Validate and release 1st generation and scale manufacturing
d. Grow R&D team (3x) and scale capability across R&D activities
2) MVP commercial launch (~25%)
3) Grow IP portfolio and fund G&A expenses (~25%)
Companies, such as Apeel Sciences, are starting to create a lot of buzz in the postharvest solutions field. This has both positive and negative consequences for Ryp Labs. The postharvest solution market is currently ripe for new, innovative, and disruptive technologies. Given that Apeel has raised over $360M to-date in Venture Capital validates the enormous market opportunity for innovative technologies that can reduce food waste. Their current advantage is that we are the only technology based exclusively on the antimicrobial mechanism of action through the vapor phase. Ryp Labs’ technology is unique in that we are using natural EOCs in their vapor phase in combination with stickers and other potential products to extend the shelf life of produce. Thus, to maintain that unique advantage, Moody believes it is imperative that they advance R&D by partnering with the key thought leaders in the field to develop a core competency that is difficult to replicate.
In addition to the high costs for technology and product development, there is a risk of being denied regulatory approval. To mitigate the regulatory risk, Ryp Labs has implemented steps in their technology development process
1) Engage with regulatory consultants and industry experts familiar with both the EPA and FDA requirements to help identify the best path(s) to market at the earliest stage possible.
2) Ensure that all compounds are listed on the FDA GRAS list and that we identify and operate within safe tolerance.
3) Ensure that migration, toxicology, and organoleptic tests are conducted on all commercial formulations.
What is the legacy you as a Founder want to leave?
As a founder I want to bring prosperity to those most in need through technologies that have the potential to provide life-changing impacts. Ryp Labs’ technology will undoubtedly open new opportunities for many communities around the world. In underdeveloped countries, for example, StixFresh stickers and other Ryp Labs solutions can provide a substantial, positive, economic benefit for small farmers and producers that don’t have the luxury of storing their produce in expensive, climate-controlled warehouses. By extending shelf-life via an all-natural process, and maintaining the food’s freshness longer, many communities (especially developing ones) will be able to consume fresh, natural, organic foods they were not able to access previously. Thus, by reducing food waste in a safe, economical, and sustainable way, we’re combating a problem that every single person on this planet, independent of social class, experiences at some level.
