Jul 25, 2023

Divert is an impact technology company on a mission to Protect the Value of Food™ as it creates advanced technology and sustainable infrastructure to prevent wasted food, driving real social and environmental impact. Pulse 2.0 interviewed Divert CEO and co-founder Ryan Begin to learn more. Ryan Begin’s Background Growing up, Ryan Begin was deeply interested in electronics and technology, which eventually led him to study engineering in college. “From there my studies took me to work in cleantech and renewable energy, specifically with a hydrogen company, called Proton Energy Systems. This experience provided me with a first-hand look at what it takes to run a company — from managing cash flow and balance sheets, to protecting intellectual property, to fundraising, and more. I would go on to use my experience from Proton Energy Systems to build Divert from the ground up with my co-founder Nick Whitman,” said Begin. Formation Of Divert How did the idea for Divert come together? “Before coming up with the idea for Divert, my co-founder Nick and I realized that there was a glaring problem right in front of us — wasted food. The U.S. alone generates more than 63 million tons of wasted food annually. Moreover, wasted food contributes up to 10% of global greenhouse gas emissions. We knew there was a business opportunity here, but we weren’t exactly sure what the solution was right away. We decided the best place to start to address this crisis was through anaerobic digestion,” Begin shared. “ To build anaerobic digesters to transform wasted food, we knew that we needed to either find capital for the infrastructure or a customer to help us finance the projects. So we did. A grocery store in Chelmsford, Massachusetts, was interested in our idea and initial business model. We started off doing waste audits, which is what opened our eyes to the nationwide wasted food crisis. And ever since that moment, we’ve been incredibly passionate to play a role in preventing wasted food from occurring. We want to leave the planet in a better place for the next generation.” The company was started in 2007 with a focus from day one on grocery stores’ wasted food. “Our initial idea was to build a solution for retailers in the back of their stores. But since those early days, the general view of the industry has matured. It’s not just the idea that we need to keep food out of landfills. It’s also prevention and asking what is happening to that food along the value chain,” Begin added. “We worked to create processes to cut down on the amount of wasted food created throughout the value chain, starting with reverse logistics. Then finding a way for edible, unsold food to make its way to food recovery programs and food banks. The last piece of the puzzle was building the infrastructure that would take the wasted food that could not be sold or donated and turn it into renewable energy through anaerobic digestion. Food retailers were instantly interested and believed in our approach, including Hannaford in Massachusetts and Kroger in California. From there, once we had a few use cases to show other food retail partners, the business took off. Over the years, it has taken a lot of testing, validating, optimizing, and perfecting our approach to ensure that we have a solution that can scale.” Core Products What are Divert’s core products and features? “Divert offers its customers an end-to-end solution of proprietary infrastructure and holistic technologies to prevent, capture and process wasted food. We specialize in creating flexible end-to-end solutions that integrate into existing workflows, helping retailers meet and exceed their diversion goals. We utilize RFID technology to provide retailers with waste management insights and trace food across the supply chain and in real-time,” Begin explained. “This same technology is used to help retailers keep food fresh for longer and redirect unsold food to food banks to feed people in need. Another core part of Divert’s solution is anaerobic digestion. Unsold wasted food is processed through anaerobic digestion to be turned into renewable energy.” Significant Milestones What have been some of Divert’s biggest milestones? “We are incredibly proud of the progress we have made to tackle the wasted food crisis. In 2022, we added more than 1,500 new retail stores. This expansion brought us to nearly 5,400 retail stores, with an additional 1,000 stores already contracted for 2023. Last year, we also announced a 10-year renewable natural gas (RNG) offtake agreement with British Petroleum (bp) worth approximately $175 million. Under this agreement, bp will purchase RNG generated from three Divert facilities, which has the potential to offset 36,905 metric tons of carbon dioxide per year. This agreement will support bp’s efforts to curb harmful greenhouse gas emissions and boost access to clean energy for bp’s customers,” Begin cited. “Most recently, we announced a $1 billion infrastructure development agreement with Enbridge, Inc. and $100 million in growth equity from Enbridge and current investor Ara Partners. This funding will go towards the development of anaerobic digesters across the U.S. to turn wasted food into renewable energy that can help power our future, all while fighting the wasted food crisis. Finally, ensuring that edible food goes to those who need it most is a core tenet of Divert’s mission. We do this through partnerships with food banks and food recovery programs across the U.S. Since 2018, we have helped to facilitate the donation of more than 11.5 million pounds of food, with 2.2 million donated in 2022 alone.” Customer Success Stories Divert currently works with nearly 5,400 retail stores across the U.S., including customers such as Ahold Delhaize, Albertsons, CVS, Kroger, Target, and more. “In one customer success story example, a major grocery retail brand in the North Atlantic was looking for a technology solution that would provide visibility into its individual store operations, help decrease the amount of wasted food leaving its back room and reduce shrink, and have a positive impact on its bottom line. The retailer implemented Divert’s reverse logistics diversion program across all of its 190 stores to enable the collection of as much wasted food as possible. With Divert’s Radio-Frequency Identification (RFID) tracking platform, the retailer was able to track store-specific wasted food data monthly and relay areas of opportunity to its stores,” Begin revealed. “Over five years, the customer had a 9% reduction in tons of wasted food across its stores, while also seeing a significant increase in sales. Divert’s insights have enabled better-informed purchasing decisions and opportunities to increase wasted food donations to local food banks and partners. In addition, the education provided by Divert’s team to the retailer’s employees has resulted in an increased awareness and overall culture shift at the company to decrease wasted food at the individual store level.” Funding Divert recently announced a $1 billion infrastructure development agreement with Enbridge. And the company recently secured $80 million in growth equity from Enbridge and also $20 million led by current investor Ara Partners. “When it comes to the technology and infrastructure needed to tackle wasted food, the U.S. is woefully behind. This infrastructure development agreement will help bring Divert and the industry forward in our fight against wasted food. This is an important milestone for Divert, as the funding will allow us to accelerate our expansion of anaerobic digestion facilities to fight the wasted food crisis at scale,” Begin pointed out. “In 2021, Divert was acquired by Ara Partners, a global private equity firm specializing in industrial decarbonization investments. As a part of the acquisition, Divert received $100 million in growth equity, led by Ara Partners in conjunction with Singapore’s sovereign wealth fund, GIC, and Ontario Power Generation.” Differentiation From The Competition What differentiates Divert from its competition? “What sets Divert apart from competitors in this space is our end-to-end solution. While some competitors focus on reducing wasted food in one area, such as facilitating the donation of unsold, edible food or composting, Divert is tackling the issue through an end-to-end approach, providing technology, logistics, and anaerobic digestion facilities to help retailers reach their sustainability goals,” Begin revealed. “Another key component that differentiates Divert from competitors is that we work directly and partner closely with food retailers. This provides us direct access to the food supply chain, allowing us to help prevent wasted food from the start.” Future Company Goals What are some of Divert’s future company goals? “Divert’s mission is to Protect the Value of Food™ and have a positive impact on our environment and communities. To deliver on this mission, the Enbridge deal is important in accelerating the building of infrastructure needed to reduce wasted food from entering landfills. The funding will go towards the expansion of anaerobic digestion facilities to convert wasted food into renewable energy to decarbonize the food value chain and combat climate change. Over the next eight years, Divert plans to scale to 30 facilities to be within 100 miles of 80% of the U.S. population. This will enable us to grow from managing 0.5% of the wasted food in the U.S. to managing 5% — a major milestone for us and the industry,” Begin concluded. “Bringing us closer to that goal, we recently broke ground on our newest integrated diversion and energy facility in Turlock, California. Once fully operational in 2024, the Turlock facility will be able to process 100,000 tons of wasted food a year. The facility will offset up to 23,000 metric tons of carbon dioxide a year — the equivalent of taking nearly 5,000 gas-powered cars off the road a year — while the facility’s renewable energy production will be enough to supply roughly 3,000 homes each year. In addition, we intend to look beyond food retail and tackle the wasted food problem across other industries. Over the last 16 years, we have mastered the approach to reducing wasted food at scale and we foresee using the foundation that we’ve built to expand to other industries as well, including restaurants and consumer packaged goods (CPG).” Trending on Pulse 2.0