Scope

Types of Capital

ReFED aspires to track a variety of types of capital flows into food waste innovation and solution adoption and scaling. ReFED groups food waste funding into the nine capital types listed in Table 1. So far, ReFED has or will be developing the ability to track eight out the nine capital types to varying degrees. The Capital Tracker at this point is able to mostly track venture capital, private equity and provide a small window into corporate finance (however not fulsome as it does not capture internal investments). In the future, we will be adding specifically data related to federal funding (which will not fully cover state or local funding by governments).

Table 1 describes the data sources ReFED uses to track each capital type, as well as any known data gaps. The table represents data sources we have identified, but not what is being reflected in the tool yet as public (USAspending) data is not included in the beta launch.

Table 1. ReFED Classification of Capital Types and Data Sources for Tracking

CAPITAL TYPE	DEFINITION	DATA SOURCE FOR TRACKING CAPITAL
PRIVATE CAPITAL
% Venture Capital	A type of financing that investors provide to startup companies and other for-profit businesses that are believed to have longterm, high growth potential. Investors in this asset class have a perceived higher risk as companies are at an earlier stage and therefore require a high rate of return	Data Source: PitchBook [2] Data Gaps: Although PitchBook has high visibility on venture capital deals - in particular in the focus geographies of North America, Europe, Israel, and Asia Pacific region (APEC) - there is a time lag in reporting transactions - in particular in the early stage of funding (seed, accelerators/incubators). See the Data Sources and Limitations section to learn more.
Private Equity	Composed of funds and investors that directly finance private companies. Organizations receiving this type of capital are established organizations or ones requiring growth equity.	Data Source: PitchBook [2] Data Gaps: See the Data Sources and Limitations section to learn more.
Corporate Finance & Spending	Spending by for-profit corporations with the intent to return the cost of capital. Examples include spending on solutions (through paying solution providers or internally developing capabilities) and corporate acquisitions (M&A). Marketing type spending (non-foundation spending) would be considered part of this category as an operating cost despite not directly leading to market returns. Additionally, ReFED has considered traditional lending (leases, working capital loans) as part of corporate finance and spending.	Data Source: PitchBook [2] Data Gaps: While some Corporate Financing & Spending transactions are covered by PitchBook, due to the proprietary nature of internal corporate investments, ReFED does not have full visibility into the amount of corporate capital invested. This type of capital will likely never be able to be tracked comprehensively. Furthermore, as technologies mature, a greater amount of investment tends to come from internal corporate investments as opposed to philanthropic or public sources. This means that as a food waste solution matures, the amount of visible funding may decrease despite the fact that internal corporate investments are increasing.
Commercial Project Finance	Financing provided for specific projects whereby the cash flows of the project pay down the project loan. This is sourced from for-profit financiers.	Data Source: PitchBook [2] Data Gaps: While some Commercial Project Finance transactions are covered by PitchBook, due to the proprietary nature of internal corporate investments, ReFED does not have full visibility into the amount of corporate capital invested. Project-based lending transactions are not fully captured by our current data sources nor will there be visibility on syndicates.
PHILANTHROPIC CAPITAL
Non-Government Grants	Philanthropic grants from nongovernment sources, including high networth individuals, family offices, and foundations.	Data Source: U.S. Internal Revenue Service Form 990-PF [5] Data Gaps: Some data gaps exist in using 990-PF forms to track non-government grants (e.g., missing donor advised funds and high-net-worth individuals, time lag in reporting, limited grant descriptions). Additionally, this does not include individual giving. See the Data Sources and Limitations section to learn more.
Impact-First Investments	Investments that seek some sort of financial return, but are willing to accept more risk or potentially lower returns in pursuit of measurable social or environmental impact. Examples include low or no-interest loans, loan guarantees, variable payment options, programrelated investments (PRIs), etc.	Data Source: PitchBook [2], U.S. Internal Revenue Service Form 990-PF [5] Data Gaps: ReFED has not yet identified an accessible data source for the full scope of impact-first investments. Some transactions will likely be captured by the PitchBook data and IRS 990-PF forms, but these sources will not be exhaustive.
PUBLIC CAPITAL
Tax Incentives	Tax incentives and deductions related to donations. R&D tax credits are not factored in this analysis.	Data Source: N/A Data Gaps: ReFED has not yet identified an accessible data source for the amount of realized tax incentives associated with food waste reduction.
Government Grants	Public funding in the form of grants and payment for ongoing services (e.g, municipal compost collection).	Data Source: U.S. Office of Management and Budget [6] Data Gaps: The federal government data only includes federal grants. Currently ReFED has not identified a data source to track state or local government grants.
Government Project Finance	Direct municipal, state, or federal project financing.	Data Source: U.S. Office of Management and Budget [6] Data Gaps: The federal government data only includes federal contracts. Currently ReFED has not identified a data source to track state or local project finance.

Note: There are types of capital that are hybrids or exist outside of the types listed above. Mission Related Investments (MRIs), for instance, would fall under the broad definition of “Impact-First Investments’’, but require market-rate returns. Therefore, it could arguably be a form of venture capital or its own capital type.

Thematic Funding Areas

By defining which thematic funding areas are associated with food waste reduction, ReFED has been striving to help the industry achieve a certain level of standardization as it has developed its Insights Engine tools.

The scope of the Capital Tracker begins with all organizations and associated transactions that would fall under ReFED’s modeled and unmodeled solutions in the Solutions Database. The below outlines ReFED’s initial process of including a solution within the Solution Database.

ReFED included solutions that have been demonstrated as feasible to implement and having a measurable impact on food waste reduction. The data analysis was limited to solutions that ReFED was able to model using available data. For each solution, ReFED researched publicly available sources and consulted experts to find the best available data. Some solutions were excluded from the analysis because the available data was proprietary and could not be publicly disclosed. Others were excluded because there was no available data or because they were deemed to be best practices that are already widely adopted. To make sure that solutions with data gaps are prioritized for future research, ReFED maintains a list of unmodeled solutions in the Solutions Database. These solutions have qualitative fact sheets available, but they are not included in the data modeling. While the list of modeled solutions is not exhaustive and is intended to be continuously improved and expanded, the proposed solutions provide a practical roadmap to achieve the national goal to cut food waste in half by 2030. ReFED has identified these solutions as contributing to reducing or diverting food waste [:ref:`4<_capital_tracker_works_cited>`].

Acknowledging that the Solutions Database is not exhaustive, the team also aimed to be holistic with inclusion of new solutions that might not be named or outlined. This part of the process involved an assessment of whether: 1) the organization receiving funding has a clear connection / relationship with food surplus and 2) (optional but ideal) existing data or white papers evidence that the solution is a net positive in preventing or diverting food waste. If the first test is not met, the solution provider/investment would be considered out of scope.

After this, ReFED categorizes food waste funding into two Applicability categories based on the company:

• Direct Food Waste Funding: Explicitly focused on funding food waste initiatives. ReFED’s rule of thumb in these cases is if the funded organization has >50% or greater of operations devoted to reducing food waste, we have deemed it to be a direct investment.

• Indirect Food Waste Funding: Funding that is not explicitly for food waste initiatives. Situations where this will occur are for food banks that supplement donations with purchased food and food waste solutions that are part of much larger platforms. ReFED’s general rule is that if an organization is >20% but less than 50% of operations devoted to food waste, it is considered indirect; the same logic is applied to individual investments.

If the solution provider’s food waste operations fall below the 20% threshold, the organization would fall out of scope for the Capital Tracker since their food waste solutions would not be considered material. For example, after Kroger acquired Home Chef (a meal kit company that was previously tracked as a food waste solution provider), Home Chef accounted for an immaterial portion of Kroger’s operations, so would no longer be tracked by the Capital Tracker. There is also no way to strip out investment going forward to Home Chef.

Figure 1. A visualization of the decision tree for determining if an organization falls within scope to be tracked by the Capital Tracker

Table 2 provides an example of following this process for an organization that ultimately was determined to be indirect.

Table 2. Example of Process for Determining if Within Scope

• Organization Name: Interstate Waste Services

• Description: Provider of solid waste management services serving residential, industrial and commercial customers. The company offers collecting, recycling, composting, and disposal of organic material and other comprehensive arrays of environmentally responsible services that include construction and demolition and material recovery services.

RESULT OF TEST	RATIONALE
IN REFED’S MODELED OR UNMODELED SOLUTIONS?
No	Cannot be classified into specific solutions.
IS THERE A CLEAR CONNECTION / RELATIONSHIP TO FOOD SURPLUS? ANY DATA / WHITEPAPERS INDICATING THE SOLUTION IS A NET POSITIVE IN PREVENTING / DIVERTING FOOD WASTE?
Yes	There is a connection to food surplus through their organic material disposal and compost offering. Could be considered under the less granular solution type: recycling.
WHAT % OF ACTIVITIES ARE FOOD WASTE RELATED? (SHARE OF REVENUE OR OPERATIONS)
20% - 50%	Based on description and desk research, it is determined that this organization does have some operations devoted to organics disposal. The team is unable to determine the mix so default would be to track but not include in direct food waste.
Conclusion: Recycling | Indirect | Include

Tables 3a and 3b below lists and describes a range of solution areas where ReFED has done a lot of thinking around scoping and were the most difficult to categorize. Most ReFED modeled solutions would fall under direct so have not been included in this table. Based on the decision tree process defined above, these are the typical conclusions as to whether companies within these solution areas are directly related to food waste reduction, indirectly related, or simply out of scope.

Table 3a. ReFED Classification of Thematic Food Waste Funding Areas

SOLUTIONS	DESCRIPTION AND RATIONALE FOR CLASSIFICATION
INDIRECT FOOD WASTE FUNDING
Online Marketplace Platform	ReFED Solution - Online platform that facilitates Business-to-Business (B2B) sales between suppliers and businesses in a centralized space, which can increase accessibility to a variety of goods and decrease time and resources needed to make a sale, thereby reducing waste. Examples include BlueCart. Given their food volumes are not usually focused on surplus food, companies within this solution will typically be classified as this should usually be Indirect. Companies set up as Online Market Platforms that do deal with a waste stream will typically be classified into a different thematic area. There are exceptions if they deal with specifically a waste stream but those would be classified as Assisted Distresed Sales or Imperfect & Surplus Produce Channels.
Direct to Consumer Channels	ReFED Solution - Use of alternative channels, apps, e-commerce models, or other, where products are sold directly to end customers without third-party retailers, wholesalers, or other middlemen. Examples include Barn2Door and Local Food Marketplace. These are considered food waste solutions as they reduce waste associated with the display and additional transportation needed for brick-and-mortar sales. Given their food volumes are not usually focused on surplus food, companies within this solution will typically be classified as Indirect. Companies set up with Direct to Consumer models that do deal with a waste stream will typically be classified into a different thematic area. There are exceptions if they deal with specifically a waste stream but those would be classified as Assisted Distresed Sales or Imperfect & Surplus Produce Channels.
Local Food Systems	What we think of as solutions that enable people to purchase more locally - thereby reducing waste relative to longer supply chains. Given the companies exercising this model, their food volumes are not usually focused on surplus food, these would usually be classified as Indirect.
Food Banks and Pantries	Many of these organizations have to supplement food rescue with food purchases to a significant degree. However a large portion (estimated ~60%5) is from rescued or surplus food. Pantries which are last-mile outlets for food bank networks are assumed to have similar mixes of surplus and purchased food. As a result, both these types of organizations are typically classified as indirect solutions to food waste.
Cold Chain Facilities	ReFED will only be considering cold chain facilities that specifically support the distribution of food and perishables. Examples of this include Lineage Logistics and Americold. Although these organizations enable the safe distribution of food, it is difficult to attribute each dollar that goes towards cold chain organizations as a dollar going towards preventing food waste. As a result, food cold chain facilities are considered indirect.

Table 3b. Out of Scope Topics

SOLUTIONS	DESCRIPTION AND RATIONALE FOR CLASSIFICATION
OUT OF SCOPE
Precision Agriculture	Examples of businesses operating within Precision Agriculture include software tools to improve yields, hardware for crop monitoring. This solution does not necessarily prevent waste in the traditional sense of post-harvest and are mostly focused on yield optimization. These are not included in scope as ReFED has looked at food surplus and waste from a post-harvest perspective and require further exploration.
Crop Protection	Crop protection examples include vertical farming (which has controlled environments), pesticides, etc. This solution does not necessarily prevent waste in the traditional sense of post-harvest and is mostly focused on yield optimization. These are not included in scope as ReFED has looked at food surplus and waste from a post-harvest perspective and require further exploration.
Online grocery	Not included as there is no conclusive data that indicates it prevents food waste. E.g. Instacart. ReFED would consider pure unique ideas like Online, Advanced Grocery Sales (ReFED solution).
Last mile delivery	Examples are grocery food and restaurant delivery. These are not included as there is no conclusive data that indicates it prevents food waste.
Hunger Relief Organizations	Many of these organizations not only have to supplement food rescue with a significant portion of food purchases, but also engage in activities beyond providing food. Initiatives may include providing shelter, education, and other programming. Although these are very important, they are outside of scope of preventing or diverting food waste. ReFED assumes that dollars going to these organizations fall under the 20% threshold of going to food waste initiatives, which is a general rule of inclusion within the scope of the Capital Tracker. Example grants / organizations that were excluded were: clothing drives, churches / places of worship unless specifically used for pantries, food drives, broad charitable initiatives (United Way, The Salvation Army).