Introducing…

Sept 2015

Campbell MurrayCEO & CoFounder

To introduce myself and Takestock there is a little history I should share with you…

1. How did I get here? -

“There is so much food waste out there and if there was a way of getting it to market a lot of it could be sold – but we need some ecommerce expertise to make it happen.”6 Months later Takestock was born.

I have a bit of an idea about reducing food waste

We want to unlock value in the food

industry and reduce waste

profitably for you.

Before eBay, it was hard to get value from unwanted stuff.

We want to have the same effect on the food industry..

The food industry has more than halved waste in 10 years but its still massive…

2. Defining the Problem; where does food waste come from?

For farmers & manufacturers, there are various reasons why surplus stock exists;• Contracted volume surplus planned in• Yield variance (+/-25%)• Packing & Distribution cost exposure resulting in surplus drill in or

animal feeds.• Class 2 impact – in EU class 2 =40% on market in UK its 5%.

1. DEFRA/WRAP 2013 UK Govt.

• DEFRA April 2015 report – £9.2Bn worth of arable crop in 2014 – 40% not yielded• TristramStuart report 2009 suggests between 20-40% of all arable production is wasted in the UK (incl harvested in to animal feed or drilled back into the soil as a lost crop)

£6bn waste

£3.5Bn+*

A farmer with surplus arable production has a few options available other than cancelling harvest;

2.1. Primary production waste driven mainly by unsold harvest & yield variance

• Takestock offers an alternative way for farmers to market product direct to trade bypassing the supply chain and associated margins.

• So long as the farmer has the ability to package and handle trade scale.

1. DEFRA/WRAP 2013 UK Govt.

Increasing value to the farmer

1. Charity Donation

4. Direct sale; Farm shops

3. Wholesale markets

2. Free to collect (AD/feedstock)

Increasing effort & decreasing scale

A food manufacturer who makes as for private label carrier the most risk;

2.2. In Food Manufacturing – waste driven by supply chain disconnect & market speculation

• Takestock offers an alternative way for food manufacturers & distributors to reach scale in the market at no risk and minimum effort .

• There is a trade off between the nature of the goods and readiness of the market to absorb and this effects pricing elasticity in return.

Increasing value to the manufacturer

1. Charity Donation

4. Supplier Reabsorption

3. Discount through primary channel

2. Liquidator & Clearance

Increasing effort & decreasing scale

The WRAP classification broadly categories the causes as;

2.2. In Retail, Catering & Domestic– waste driven by market demand flexibility & shelf life mis management

• Over supply in the food chain• Inefficiency of scale & difficulty in giving SSL product away• Packaging limitations affecting shelf life.• Consumer behavior ; principally defined as allowing food to expire

accidently • Domestic waste is the largest segment and is characterized by household/consumer education campaigns to change behavior

• Local councils under pressure to collect food waste and centralize into AD / BioMass channels.

• Governments, globally & locally are driving an agenda to tackle food waste.

• NGOs, EU & UN (FAO) driving the debate at government lobbying level.

• This spans tightening legislation (the stick) and Tax incentives & large scale innovation funding for new solutions (the carrot).

• UK Courthauld agreement 3 for e.g. shows government model is to lead the debate and encourage industry to self regulate and innovate. Current renewal (2015-2025) is seeking a charter in both supply & demand side declaring a willingness to cooperate and readiness state.

• Outside the UK governments are pushing further – eg France Legislation comes in July 2016 requiring large supermarkets scrapping food to give it to food banks.

• EU drive to adopt this is well backed.

3. Macro Environment Pressure – gathering momentum

Farming has adopted labour & waste saving technology throughout history; the latest trends in modern farming reducing waste include;

3. Emerging technology solutions in Primary Production

1. Farming yield tech – predictable crop yields are good for everyone.1. GM – including C3 - C4 Photosynthesis pathway offers ~50% yield

increase. Combined with disease & climate resistance this controversial science is already piloting in Maize (MON810) and Potatoes. Class 2 reduction?

2. Automation – Robots increasingly used in Milk collection and sensors used for a wide range of tasks (animal fertility monitoring to GPS driven machines to reduce lost crop yield).

3. Soil science – using x rays to determine soil phosphorous levels reducing loss to over use.

2. Poly Tunnel & artificial environments; doubled soft fruit production in 5 years.

3. Storage tech – especially in developing world where 40% is lost through lack of cold chain facilities. (UNFAO 2013). In the uk this has transformed UK produce season.

4. Beyond tech we are seeing other solutions emerging ; gleaning networks & other routes to market for class 2 product emerging.

Technology in food manufacturing waste reduction centers around process improvements;

4. Emerging technology solutions in Manufacturing & Distribution

1.Manufacturing process and packing adding life to product.; 1.HPP; above 58k PSI – inactivates bio processes in Bacteria,

Mould spores, & a broad range of plant based pathogens.

2.Cold plasma; very low energy use to kill pathogens inside packaged products.

3.UV – surfaces and packaging drive towards 100% sterile pre pack conditions but have limited impact on the food itself.

2.Enabling market efficiency - takestock as an e.g. as is the intended output from Courthauld 2025. The establishment of national AD logistics models make this last option more viable.

3.Storage and distribution; Use of in transit monitoring systems have lead to a complete cold supply chain model in the UK.

Retail, Catering & Consumer food waste reduction evolves around real time behavior change;

5. Emerging technology solutions in Retail, Catering & Consumer

1.RFID & i beacons to drive SSL product & date awarenessLarge infrastructure agreement needed to make it a household technology & the unit cost still too high for FMCG.

2.End to end systems to get a complete view of the business and avoid dead ends producing waste (eg cybake, Opsimize et al)

3.Market efficiency – eg Tesco Food cloud charity app

In summary, 3 major forces are agents of change in reducing food waste –

1. Commercial interest; global food & energy costs/acre of land are long range inflationary

2. A complex social & political agenda is keeping the subject high in the CSR agenda.

3. Changing consumer trends; companies that assist consumers & catering providers through the use of technology will enjoy a premium and be favored over those that don’t.

5. Technology innovation to reduce waste is accelerating across the food industry