Afresh Technologies has raised $13 million in a Series a extension round to expand its fresh food management technology that helps grocers reduce food waste. Afresh said the round was sparked by investor interest due to Afresh’s growing list of customers. The round was led by Food Retail Ventures and joined by existing investors Innovation Endeavours, Maersk Growth, and Baseline Ventures. The San Francisco-based startup also is welcoming food industry veteran James McCann to its board.

I believe that the fresh ordering technology that Afresh has pioneered is set to become one of the most important technologies in food retail,” said McCann, in a statement. The improvements to freshness, sales, shrink, labour and, as a consequence, profitability, are truly transformational. Afresh said its technology, which is powered by artificial intelligence, helps grocers control food spoilage by optimizing merchandising, ordering and department operations. Users are able to reduce food waste by 25 percent, on average, increase produce operating margins by at least 40 percent, and grow revenue by 2 percent to 4 percent, the company said.

In an interview with PYMNTS earlier this year, Afresh Co-Founder Matt Schwartz said the problem with stocking fresh groceries lies in inventory management. Grocers large and small are still using pen and paper or Excel spread sheets, in particularly advanced cases — to figure out how many fresh goods they should be ordering. The millions of tons of products being thrown out each year indicate that, by and large, those back-of-the-envelope calculations are far from efficient. Schwartz said Afresh aims to inject better efficiency into the product by using learning algorithms to review product data over time, and to better guide store staff on how much to order (and when) to meet likely demand while reducing overall waste.

Fresh food is so dynamic, Schwartz added. This helps us make decisions in a way that accounts for a lot of the uncertainty. Fresh food drives the global grocery industry, yet technology gaps cause billions of waste and lost profits every year. The round was led by returning investor Innovation Endeavours with participation from Food Retail Ventures, Maersk Growth, Impact Engine, Better Food Ventures and existing investor Baseline Ventures. This brings the total amount raised by Afresh to $20 million. A grocery store’s fresh food sections (think: produce, bread etc.) are trickier to manage than the aisles of CPG products as fresh foods have a limited shelf life and expire. The goal is to keep a store stocked with enough products that they don’t run out, but not so much that there is a lot that goes to waste.

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Journal of Food and Clinical Nutrition