This Young Entrepreneur Is Using AI To Fix The Food Supply Chain And Reduce Food Waste

Forbes

One bad apple can spoil the supply chain, so Katherine Sizov uses software to find rotten ones. In 2019, she launched Seattle-based Strella, which uses machine learning models and food-sniffing sensors to monitor inventory to prevent produce from rotting. AI-connected sensors measure the hormones plants exude as they ripen. Based on the data, Strella informs vendors about the best time to ship and sell it. To date, Sizov says she has analyzed more than 1.5 billion pounds of apples, saving over 40 million pounds from going to waste. Investors Google Ventures, Yamaha Motor Ventures and Millennium New Horizons have put $18.5 million in. Sizov says her service is good for the planet—and potentially highly profitable. “A lot of sustainable solutions are profitable, driving optimization and driving more elegant solutions.”  Read the full story on Forbes:   Subscribe to FORBES: https://www.youtube.com/user/Forbes?sub_confirmation=1  Fuel your success with Forbes. Gain unlimited access to premium journalism, including breaking news, groundbreaking in-depth reported stories, daily digests and more. Plus, members get a front-row seat at members-only events with leading thinkers and doers, access to premium video that can help you get ahead, an ad-light experience, early access to select products including NFT drops and more:  https://account.forbes.com/membership/?utm_source=youtube&utm_medium=display&utm_campaign=growth_non-sub_paid_subscribe_ytdescript  Stay Connected Forbes newsletters: https://newsletters.editorial.forbes.com Forbes on Facebook: http://fb.com/forbes Forbes Video on Twitter: http://www.twitter.com/forbes Forbes Video on Instagram: http://instagram.com/forbes More From Forbes:  http://forbes.com  Forbes covers the intersection of entrepreneurship, wealth, technology, business and lifestyle with a focus on people and success.

Transcript

00:00I think a lot of sustainable solutions are profitable, are driving optimization,

00:04are driving more elegant solutions, and I think Gen Z has gotten that.

00:17Catherine Sizov, co-founder of Strela, thank you so much for joining me here today.

00:21Thank you so much for having me.

00:23So you are solving a problem that I feel like so many people run into,

00:26which is you walk into a grocery store and none of the produce is the perfect ripeness,

00:31or you buy it, take it home, and the next day it's already rotten.

00:34Can you tell me a little bit about what Strela does and how you are attempting to solve this

00:38very, very annoying problem?

00:39Yeah, absolutely. So like you said, 40% of food is wasted before it's consumed,

00:44and on top of that, there are quality issues that we all experience on a day-to-day basis.

00:48So I wanted to solve that problem, and I have a biology background,

00:52so the first thing I thought was, can we add a little bit more data into this process?

00:57So at Strela, what we do is we predict the shelf life of produce items and other perishable products,

01:03and we use that data to make better supply chain decisions.

01:06It's such an important issue right now, especially as it comes to sustainability factors,

01:10and like you said, just waste and convenience for people's lives.

01:14What initially pushed you in the direction of building a company in this industry?

01:17It was that metric. You know, I wanted to go to grad school,

01:21but then something about it wasn't really like striking my fancy,

01:24so I started reading about things that I thought were interesting,

01:27and then I read that crazy stat, 40% of food is wasted,

01:30and that kind of hit me in a couple different ways.

01:33Like first of all, I didn't even know where my food came from at the time,

01:36so I went straight to the grocery store, started asking weird questions to the people who worked there,

01:41and then that led to a really big rabbit hole that eventually turned into Strela.

01:45For people who are not familiar with the produce supply chain,

01:49can you give us a rundown of like exactly how it works today,

01:51and then where you and Strela come into the picture?

01:54Yeah, absolutely. So of course you've got farmers who grow and produce fruits and vegetables.

02:00That usually gets aggregated into the packing and distribution phase of the food supply chain,

02:05so that's where we come in. We deal with post-harvest or supply chain solutions.

02:09I'll give you an example. An apple in a grocery store can be a year old by the time it gets there.

02:15So apples are stored in these giant storage rooms, and right now there kind of isn't like really any

02:20data about which apple can store for a long time and which apple can't. So we created a sensor

02:26technology coupled with some machine vision and supply chain insights that allow us to predict

02:32which apple is the most ripe one and then help the packer, in this case, make a decision about

02:36what inventory to move first.

02:38Okay, cool. So you are basically telling them like when to move the apple, for instance,

02:43like to the shelves that people will then buy at the grocery store.

02:46And we deal with like huge volumes. So we're talking about like millions of apples at once.

02:51How do you go about finding this data for each different like bit of produce? Because I assume

02:56like a banana is very different from an apple is very different from a tomato or whatever it is.

03:00What is the process like on your end from like a tech side to be able to accurately predict those things?

03:06Yeah, there's some like physiological similarities. So for example, a lot of fruits and vegetables produce

03:12a hormone called ethylene. And so what we can do by measuring ethylene gas is to understand a whole

03:18variety of different fruits and vegetables. But some will have more ethylene production and some will

03:23have less. So for example, kiwi are actually super sensitive to ethylene. And so they're kind of the gold

03:29standard for us when it comes to that input. We also look at stuff like machine vision. So you can see a banana

03:35changing color and you can tell it's getting more mature. And that's just one input that helps us

03:40understand what the maturity of the product is. And what exactly are you bringing into the supply

03:46chain like, you know, machinery wise? Is it like the physical sensor that you're putting onto the

03:52conveyor belt? Or what does it look like in a like very tangible sense? One of our cores is a sensor

03:58or a device. It's about the size of a brick and you can put that in multiple supply chain environments

04:03and it's going to measure those hormones alongside other environmental factors that are really

04:07important for produce. That's a really big input for us. We also put cameras and other types of

04:12things all of them down the supply chain to collect the data we need. So giving you an example with

04:17bananas. We ripen bananas and what we do is we place our sensors in what are called banana ripening

04:23rooms. And then we basically we basically watch the bananas go from green to yellow in this ripening

04:30room. So we do that with vision and then we also do that with those plant hormones. And then we

04:35automatically adjust the conditions of the ripening room to get a perfect yellow banana at the store

04:39shelf every time.

04:40So the supply chain has been a really big issue since especially COVID when so many industries

04:46really joined this conversation about the challenges and you know the complaints about how the supply

04:51chain currently exists. What are you seeing? Are there roadblocks that you're coming up against or any big

04:55challenges within the supply chain at large?

04:57Yeah absolutely. I think COVID kind of opened our eyes to the fact that stores don't necessarily have to

05:03have their shelves stocked right and food is obviously a really big part of that. There have been so many

05:08challenges in the food and ag industry and the entire time that I've worked in it whether it's

05:15importer export markets being challenging whether it's difficult crop environments right we've got

05:21some weather changes going on that really affect the climate and resultingly the product. So there's

05:28just been a whole slew of things. I think on top of that like from an investment standpoint food and ag

05:33is a pretty unique thing right it takes five years for fruit to grow on a tree and so it's one of

05:39those like slow patient capital experiences that I think is a little bit not traditional or not super

05:46common to see today.

05:48And do most people that you're working with understand that like this is going to take a long

05:52time and this process that you're working with and is taking so long especially investors that

05:55oftentimes like you know they don't want it to be a super long process always what have those

06:00conversations looked like. Yeah I'd say outside the industry can be challenging I think in food and ag

06:05it is a labor of love at the end of the day you know and you have to have some passion in order to

06:10really truly understand why people farm fruit today despite all these difficult circumstances but

06:17I think at the end of the day people understand that food is like a pivotal industry right despite all

06:23of its hardships it's one of those things that really needs to have some kind of innovation.

06:28Mm-hmm what has it meant for you guys to build this technology like what does the team look like

06:33what are the steps that you guys have had to take to ensure that and especially with like so many

06:37changes within AI within these emerging technologies right now how have you guys gone about like

06:42actually creating the the technology that works? Yeah we're a pretty nerdy team and I call

06:47us like full stack in a very real way so we've got like electrochemists who work on our sensor

06:52fabrication we've got post-harvest physiologists who know all about produce and how it works then

06:59we've got devs and data scientists and mechanical engineers so it's a lot of different types of

07:04technology but then on top of that you really need the context for food and ag and so we have a lot of

07:09people who are like born and bred in the produce industry who really understand like how decisions are

07:13made today and can speak with our customers about the technology. How big is your team? We're 27 people right now.

07:20And I assume that that has been gradual over time to build that team what kind of like steps did you

07:25take to ensure like you know the first step is to build the technology the second is to like either

07:29outsource it or whatever it is what was the kind of journey and timeline like? Yeah it's just like

07:34just picking the battles like the biggest problem on day one you know so the first thing was getting

07:39a good input into the model right um now we're working on refining the models or using the amount of

07:44data that we've collected to make the model better so I think it's just figuring out exactly what I can

07:49do today to make tomorrow better and just building towards that. Did you always want to be a CEO?

07:55Not really. I wanted to go to grad school for neuroscience but I just couldn't sit behind a

08:00lab bench for like another eight years you know. What's been the biggest challenge as you're leading

08:04this company? People. People are always the biggest challenge but also the most rewarding part of it

08:10you know they're not predictable um it's yeah it's always people but yeah like I said that's always my

08:16favorite part of it too. Yeah in terms of how much has changed in technology so fast what are you

08:22expecting to be able to either do in the future what are your goals in terms of like how far and

08:27wide you can grow Strel in the next couple of years? Yeah I think in terms of technology doing more with

08:32less is the name of the game so you can have a small team that knows how to use a lot of different

08:37kinds of tooling um in order to create a pretty big impact and that's also the reason I really like working

08:42in food because yeah you can make an impact on 20 billion pounds of apples you know and things like

08:47that. In terms of two then growing through the financial side of things you guys have around 19

08:53million in funding correct? What has that funding journey looked like? What's the pitch that you're

08:57giving to investors? What has the feedback been from them? Yeah so we've mostly gone through a series

09:03A is the last round that we did um we raised from generalist VCs so I'd say we typically stay away

09:09from any kind of sustainability focus or anything like that it's really all about what kind of

09:14margins we can drive what kind of benefit we can bring to the customer and it's very very business

09:18focused at the end of the day. How come why do you stay away from that other you know I don't know

09:23types of industries that could be very relevant for what you guys are building? Um I would just say

09:27like on the sustainability side I think as much as I do it for the sustainability piece myself and that's

09:33what keeps me going to sleep at night I don't necessarily know if like traditional venture

09:39capital is really caught up to that message so I think when I pitch to investors and things like

09:43that the focus really is on a business that makes sense. What's your best piece of advice for other

09:48founders that might be in an intersection like that like how did you find the right messaging to say

09:52like you know this is the company that I want to build and the reasons that I want to build it without

09:56focusing too much on maybe the keywords that investors aren't going to get? Yeah I think it's once again just

10:02turning it into like a business that makes sense right so for example food waste is something that

10:08of course matters from a sustainability perspective but it's also super not profitable right so when I

10:13go to my customers I don't really necessarily talk about sustainability I talk about what kind of ROI I

10:18can bring to the table and how reducing shrink is great for their bottom line and I do the same type

10:23of thing for my investors. So let's talk about those customers you guys work with multiple different

10:27enterprises around the country how did you broker those partnerships what has that experience been

10:33like? Super old-fashioned our industry is very like you have to meet people in person get to know them

10:39it's you know if you imagine food and agriculture it kind of is what you would expect it to be so

10:45no magic there it's just yeah slowly building relationships over time. What do you tell them to

10:49ensure that they know that you're the right fit for them as well as they're the right fit for you how

10:53does that relationship work? I think it's usually just having a conversation and trying to approach

10:58it as a partner so you know we have a technology you know we have a solution but really understanding

11:03what problems they're trying to solve you know hey my tomatoes are having a lot of issues on my store

11:08floor or man I keep getting dinged on my bananas or the the CEO of this company keeps texting me

11:14because his wife's unhappy about the bananas so just understanding what their problems are and then seeing

11:19if our technology is a good fit for that. Yeah totally so you're based in Seattle you said you

11:23have to be around the the apples of the world how does the different locations that you are working

11:29with in impact how you guys are offering your services is it different based on location around

11:34the country? Yeah we currently operate in 26 different countries I would say in general I mean apples

11:40are apples right there are different varieties and stuff like that and people have different feelings

11:45about them and what they like but for the most part our technology can be applied to all different

11:50types of fruit and vegetables and in the future other perishables as well. What about the relationships

11:54though working like you said within multiple different countries are people across the world looking

11:58for different things from you guys or how has maybe the different markets impacted how you guys tell

12:04your story or what you really are offering to them? I think the core value proposition remains the same

12:09typically but there are always adjustments to be made for example Europe does care a lot more

12:15about sustainability so that's something that we can lean into a little bit more the US is very

12:19optimization focused so we like to talk about that more in the states but for the most part I would

12:25say the industry is kind of the same everywhere. In terms of generations I feel like our generation

12:30gen z younger is really focused on sustainability and much more than other generations have been but I think

12:36a lot of people don't exactly like know where to start or know what to do to like make the impact

12:40that they hope to make how has gen z and you know that generation's kind of newfound focus on

12:46sustainability impacted what you're building? I think it's really important to focus on these things and I

12:51think there's like a huge misconception that people have had previously that sustainability means you're

12:56doing something out of goodwill or sustainability isn't profitable but I think that's super untrue I think a

13:02lot of sustainable solutions are profitable are driving optimization are driving more elegant solutions

13:08in whatever industry you operate in and I think Gen Z has gotten that. Totally how has the increase of AI

13:14changed what you're able to offer how fast you're able to offer like what's been the biggest benefit to

13:19incorporating more of these technologies into your services? I think the biggest benefit of AI has been

13:24that zero to one so bringing out like some MVP or prototype it takes like hours or days as opposed to like

13:32building up your own native models so I think that's been really helpful like doing market research

13:37understanding what the customer needs are throwing yeah a basic product at them and see how they react

13:43has been really really useful. Going back to when you first started the company what were some of the

13:48initial steps that you took to really put this plan into action I think you know so many young

13:53founders sitting might have an idea or be going to the grocery store and being annoyed about something

13:57but like taking it from similarly zero to one or like an idea to a company is a very like large margin

14:05what were those first like couple steps that you took to put that into action? I think a big part of

14:10it was trying to calendar some things in for myself so for example I did a lot of pitch competitions or

14:16business plan competitions where I had deadlines so I was like I'm in I have to present a pitch deck next week

14:20like I can't look totally stupid you know so that would drive me to do stuff kind of like I was in

14:26college at the time homework helps you get stuff done you know so I assigned myself homework in order

14:31to be able to keep pushing the ball along for myself. Yeah is there anything that you wish you knew when

14:36you started that you know now? I feel like every day I'm like oh my gosh this would have been easier

14:41now that hindsight's 20-20 but I also feel like I made a lot of lucky mistakes and I also just think

14:47that when you're like young and naive and haven't tried something before like that's a great thing

14:51like beginner's mind as they call it in Zen is like a great thing so I I don't necessarily like

14:58I wouldn't have done it any differently if if that makes sense. It definitely does. What's your best

15:02piece of advice for other young female founders today especially approaching industries like

15:07manufacturing or technology that's so male dominated how have you gone about it what would you advise

15:12other young women to do today? Yeah it's a good question I feel like just showing up as

15:16your authentic self I know that sounds a little corny but uh yeah just kind of demonstrating that

15:22you care about what you're working on and you're here to hopefully make a positive impact goes a

15:27really long way for people. Who are some of your competitors today? Oh so we have a number of

15:32different competitors I guess I would say although one thing to caveat is food waste is such a big

15:37problem that I think there should be like a whole suite of solutions in order to address it.

15:42One competitor is chemicals that you can apply to produce in order to extend their shelf life

15:48so we oftentimes compete for the same checks. I will say we do work in complement to them but

15:54sometimes there is some competitiveness there. Yeah how I was going to ask like how do you continue

15:59to stand out or like put yourself forward in those positions or collaborate with other companies what

16:04has that process looked like? I think a big piece of our differentiation is our ability to

16:09change and move very quickly so we're still a pretty small team and we pride ourselves in being

16:15innovative we pride ourselves in hearing what the customer has to say and so we can make a lot of

16:19different adjustments to our products for the customer and then I think also like going back to

16:24the chemicals thing I generally prefer you know food is food it grows the way it grows and we can work

16:31our way around the supply chain and make it better and improve the process itself rather than necessarily

16:37touching the food itself. As part of this under 30 community so much of it is focused on youth and

16:43youthfulness how has youth or coming in with such like fresh eyes impacted your ability to grow and

16:49innovate you mentioned that like that's the name of the game for your team but what has like your age

16:54meant for your career so far? Yeah I guess I don't have a control group so I couldn't necessarily tell

17:00you I will say food and ag does tend to trend a little bit towards the older side and so sometimes

17:07bright-eyed and bushy-tailed people coming in to meetings about technology is fairly unique but I

17:12think a big part in my industry is making sure that I learn and respect and understand what the previous

17:18generation has brought to the table and incorporate that into the next generation of solutions. Yeah that

17:23totally makes sense you mentioned before too that you have taken feedback from what your customers want I'm

17:29sure from your investors as well what has been like something some point of feedback that you

17:34feel like has really either caused you guys to pivot or like really impacted how you are offering what

17:38you're offering today? I think a big part is to be able to see what we're doing so you know adjusting the

17:47inventory of apples is cool and seeing like food waste reduction is cool but having like a platform where

17:54people can actually touch it and deal with it you know is very important because an algorithm is sometimes

18:00not something that people can intuitively understand even if it does bring value to a business. And in

18:05practice today is that through the sensors or are there other ways that you guys are encouraging your

18:10customers to like really get hands-on with the process? Yeah there's a whole bunch of different stuff so

18:15like for example we have a little app that allows you to snap a photo of a banana in a store and it will tell you like how

18:20ripe this banana is and whether it's on target or off target we do other things like performance

18:25dashboarding so showing people who care stakeholders like how we are ripening bananas and what our

18:31performance has been over the couple weeks that we've last seen so yeah I think a big part is just

18:36creating like visualizations for the customer in order to understand what it is that we're doing in

18:41the background. Any plans to make that app available to the general public because I feel like so many

18:45individual consumers could really benefit from like snapping a picture and understanding so much

18:50more about what they're about to buy. Yeah I'll work on creating a link and I'll put it in our website

18:54but I'm not a B2C girly you know I'm B2B, enterprise B2B. No that's so fair it's a totally different tree

19:01to bark up for sure. My last question for you is as you're moving into the future obviously so much is

19:07changing within the industry right now what is one prediction you have about where this industry is going

19:12or something that a trend that you might be trying to get ahead of right now? Yeah I believe a lot of

19:16the food supply chain is going to be automated so right now you'll hear it all the time that the food

19:23supply chain is held together by people who really care who have a lot of experience in a very niche

19:28subject matter so for example there's a job called a banana ripener and this person like peels the peel

19:35from the pulp or measures latex flow and like feels the banana bees the banana in order to get it to the

19:41right color and the entire food supply chain is very much like that and I think in the future we

19:46won't necessarily have that kind of expertise at the table and so we need to learn how to automate

19:51that process and make it more consistent. Yeah that's super important thank you so much for joining me

19:56today I can't wait to see all that you guys do and all the bananas that you guys save from being

20:01thrown in the trash so thank you for taking the time. Thank you.

20:15I'll see you next time.

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