Online grocer Misfits Market is acquiring its competitor Imperfect Foods for an undisclosed amount, uniting two companies that both focus on eliminating food waste.
Both companies sell good quality but ugly-looking produce that retailers typically toss for lacking aesthetic appeal. Their business model offers cheaper produce and reduces supply chain costs, saving food from ending in landfills. Research shows that 30% to 40% of food sold in the U.S. ends up in landfills, contributing to greenhouse gas emissions.
“We have a tremendous opportunity to advance the shared mission of both brands, which is nothing less than a fundamental re-imagining of both the grocery category and the broken U.S. food system,” said Abhi Ramesh, CEO and founder of Misfits Market. “The strengths of the Imperfect Foods organization, from its in-house delivery fleet and robust private label program to its sustainability commitments and innovation, add immediate scale and depth to what we’re building at Misfits Market.”
The two combined companies will cross more than $1 billion in sales and become profitable by 2024.
Under the terms of the deal, the two brands will operate separately in the near term, with Ramesh serving as the chief executive. Meanwhile, executives from Imperfect Foods will become a part of Misfits Market’s leadership.
“Both organizations have made significant progress as individual brands—together, we have already rescued nearly 500 million of pounds of food that may otherwise have gone to waste and driven innovation in a category propped up by antiquated technology and thinking,” said Imperfect Foods CEO Dan Park. “The combined experience and expertise of this newly merged team will exponentially increase our ability to take on established players in the traditional grocery space.”