Online Grocer Startup Martie Takes Food Waste Fight National

A few years back entrepreneurs Louise Fritjofsson and Kari Morris launched a business to create nutritious foods at a price point for more people, knowing that the healthiest foods are usually the most expensive.

The two partners quickly ran into a big problem: a lot of overstock inventory. They were up against a balancing act in trying to neither underproduce nor overproduce.

They started thinking about two other stark realities they were keenly aware of: 30 to 40% of edible food produced in the U.S. gets landfilled. At the same time, millions of people and their families struggle to afford groceries.

“So, the question became why do we keep producing more and more food when so much goes to waste, and while over 34 to 40 million Americans are food insecure [unable to afford enough groceries to keep themselves and their families healthy]?” Fritjofsson says.

She and Morris swerved, deciding they would not make more food.

“We shut down our company and focused on building a new company: Martie. We figured we can leverage one problem [surplus food going to waste] to help solve another problem [food insecurity],” she says.

Now they save other brands’ surplus and overstock inventory from rotting in landfills, rerouting it to consumers at a deep discount through an online shopping venue. On average, they sell brands’ goods at 55 percent off the retail price, but you’ll find offerings at upwards of 70 percent off.

Among their retail partners –they have over 2,500 of them—are KIND, Kellogg’s, Quaker, and PepsiCo. While Martie pedals smaller brands’ merchandise too, most stock comes from the bigger players. They need a lot of help because of the tremendous volumes they produce, Fritjofsson says.

She and Morris created what’s basically an alternative to the traditional liquidation model, remembering their reluctance to work with liquidators in their earlier venture. The two women felt these operations did not care about the brand affinity they’d worked hard to build.  

“You lose control over how your items are presented. They could end up sitting on a dusty shelf waiting to be moved. We thought there was an untouched area in the liquidation market,” says Fritjofsson who heard from other brands they too steered clear of liquidators; instead, they opted to landfill more. 

The partners’ idea was to create a venue to move good food while telling brands’ sustainability stories and in a way that resonates with consumers.

“We talk a lot about each brand’s journey [on the path to tackling food waste]. That’s a huge lever for us,” Fritjofsson says.

In their first business they’d learned they could pack a punch by leveraging popular social influencers on Instagram to relay messaging.  They take a similar approach now, only they created their own influencers, with Martie himself being the brightest shining star, serving as the company mascot.

He looks like the Earth and makes appearances on the company website.  That’s where shoppers find information about where food comes from, what surplus is, and where that surplus typically goes. They learn not only what brands are doing and resulting environmental outcomes, but how they can be part of that work by buying through Martie.

The e-commerce model has salvaged about 2.5 million pounds of food since its launch in November 2021. And Martie is growing fast, forging its way into 34 states in 22 months. By October 2023 the young company will ship to all 50 states.

Today it operates from one warehouse, centrally located in Texas, and buys what it freights only from that region. But near-future plans are to launch hubs on the east and west coasts and source from there too.

Finding a skilled warehouse team was key, considering the number of SKUs in each order and other complexities involved in moving many products, fast.  Martie works with a management team with years of experience at Amazon.

“We are getting more efficient at storing, shipping, and packing. And while we are not necessarily profitable as a business overall, we pack and ship with profitability,” Fritjofsson says, commenting typically online grocery operations lose money on these logistical components of the business.

Little by little, more food retailers are looking for ways to cut waste, and some are turning to new technologies for help. Too Good To Go is another app enabling consumers to buy surplus food at a discount. Like Martie, the company has scaled fast. It’s different than Martie in that the company sells perishables, and consumers come into the stores to pick up what’s left at the end of the day.

Other technologies work in different ways. Shelf Engine developed an artificial intelligence-driven system that, among functions, forecasts demand, enabling grocers to place more accurate orders and waste less.

E-commerce food businesses have a unique opportunity to leverage technology for their model’s specific purpose, says  Matt Newberg, founder, HNGRY. HNGRY is a media platform covering technologies’ role in the world of food that Newberg launched after working as a consultant for a meal delivery startup.

He points to that online grocers are positioned to re-educate consumers to plan further in advance in exchange for lower prices.

In doing so, Newberg says, “Digitally-native online grocers can build just-in-time inventories that seek to lower food waste, improving their bottom lines while providing products that are priced closer to that of a traditional grocery store.”

Even with evolving tools to cut waste, food retailers are inevitably set up for waste to happen.

“Delicate offerings like fruit, vegetables, and seafood sit in open refrigerated shelves to provide easy access. Apples and oranges are stacked in huge, shiny pyramids ensuring only the unblemished parts are visible. And the hot bars and salad bars brim with food [most of the day and night],” says Eva Goulbourne, CEO and founder, Littlefoot Ventures, a food systems and sustainability consultancy.

“This tension of offering everything and offering it blemish-free, with the financial, environmental, and social cost of the waste make this status quo no longer tenable,” she says.

At the same time, the mounting glut is one of the most solvable problems of we will see in our lifetime in her eyes.

Some solutions work not only in the way of technologies but in how food businesses operate.  Goulbourne points to such practices as including more imperfect, surplus, and upcycled products; increasing frequency of deliveries; improved donation measures; and on-site composting.

Still, plenty more has yet to happen to turn off the tap on food waste.

“It will take many focus areas, especially in logistics. Better data and more cost-efficient technology, plus updated regulations and modern consumer education, together, can weave a solution. But not one thing will fix food waste, it will take innovation in every sector,” Fritjofsson says.