Personal blog of Yzmir Ramirez

Crisp, a demand forecasting platform for the food industry, has today announced the close of a $12 million Series A funding round led by FirstMark Capital, with participation from Spring Capital and Swell Partners.

Crisp launched out of beta in January of this year with a product that aimed to give food suppliers and distributors a clearer picture of customer demand at retailers. Before Crisp, these organizations usually had several data scientists compiling data from various sources into an unintelligible spreadsheet, making it difficult to see general demand outlooks, and nearly impossible to spot anomalies.

Not only does this lead to losses in revenue, but it also contributes to a terrible amount of food waste.

Crisp looks to solve this by giving these suppliers and distributors a visualization of their data instantly and in real time. The company has built integrations with a large number of ERP software, ingesting historical data from food brands and combining them with a wide range of other signals around demand drivers, such as seasonality, holidays, price sensitivity, past marketing campaigns, changes in the competitive landscape and weather that might affect the sale or shipment of ingredients or the product itself.

The end goal is to consolidate data across the industry, from brands to distributors to grocery stores, so that each individual link in the food chain can do a better job of matching their supply with their demand on an individual basis.

Since launching out of beta, Crisp has expanded beyond food brands and suppliers into retail and distributor space. The company has also expanded beyond produce and dairy into verticals like beverages, bakery, CPG, flowers, meat and poultry. The startup says its seen an 80% increase in the number of customers using the platform since January.

Obviously, the coronavirus pandemic brings its own unique challenges and opportunities to Crisp’s business. On the one hand, grocery store shopping is booming and the supply chain behind it is certainly in need of better data science and demand forecasting as user behavior shifts rapidly. On the other hand, user behavior is shifting rapidly.

With state by state, and sometimes county by county, lockdowns and shifts in the restrictions imposed on small businesses, Crisp has had to manually track what’s going on around the country in order to provide clear insights to its customers.

“This period we’re in has increased that willingness to share data and increased collaboration between everybody in the supply chain,” said founder and CEO Are Traasdahl. “We’ve seen a big shift there. Earlier, everyone assumed that everyone else was able to deliver, but now this ability to have a full, top-down visibility across a whole depth of companies, not just the companies next to you in your trading relationships, but being able to unify data and have more insights from multiple steps away from yourself, and get that data in real time been accelerated.”

Crisp currently has 33 employees (with plans to hire on the back of the funding), which is 33% women and 15% people of color. Half of Crisp’s management team are women.

The food industry may be the biggest industry in the world, but it’s also one of the least efficient. BCG says 1.6 billions tons of food, worth $1.2 trillion, is wasted in food every year, and those numbers are only expected to go up.

A number of players have stepped up to try to solve their own portion of the problem, and one such solution is Crisp. The company, which received $14 million in Series A funding last year led by FirstMark Capital, is today going live with its platform (which has been in beta).

Crisp aims to solve the global food waste problem via demand forecasts. Founder and CEO Are Traasdahl, a serial founder, believes that a lack of communication and data flow between the many players in the supply chain is a main cause for all this waste, a great deal of which happens long before the food reaches the consumer.

Right now, forecasting demand is nowhere close to a perfect science for many of these players. From food brands to distributors to grocery stores, the problem is usually solved by looking at a spreadsheet from last year’s sales to try to determine the signals that played into this or that SKU’s sales performance.

And then there was Crisp.

Integrated with almost any ERP software a company might have, Crisp ingests historical data from these food brands and combines that data with signals around other demand drivers, such as seasonality, holidays, price sensitivity and other pricing information, marketing campaigns, competitive landscape, weather that might affect the sale or shipment of certain produce or other ingredients.

Using these data points, and historical sales data, Crisp believes it can give a much more accurate picture of demand over the next day, week, month or year.

But Crisp isn’t just for food brands, such as Nounós Creamery, a Crisp customer that says its reduced scrapped inventory by 80% since switching to the platform. Crisp serves almost every player in the food supply chain, from retailers to distributors to brands to brokers.

And the more customers it gets, the better it is at predicting demand on a very specific level. For instance, the demand forecasting Crisp offers for a particular grocery store, based on external data, will obviously get much better once that grocery store is a customer on the platform.

Traasdahl was initially concerned that his customers would be reluctant to hand over this type of sensitive sales data, and also that players within the industry might be anxious to hand over such data to a platform that’s aggregating everyone’s data, including their competitors’. Turns out, the food industry has more of a “better together” mentality.

“Other industries are not as dependent on each other,” said Traasdahl. “If I am a creamery and need to buy blueberries for my yogurt, I may have five different vendors for those blueberries. And if they don’t get delivered on the right day, Costco will yell at me for being late with the yogurt. Everyone in the supply chain is somewhat dependent on each other.”

For that reason, it’s been easier than expected to attract clients to the platform. The prospect of a collaborative demand forecast platform, which is pulling signals from across the entire industry, is going to be more accurate than siloed demand forecasts produced by a single vendor or brand.

During the beta program, which launched in October, Crisp brought on more than 30 companies to the platform, including Gilbert’s Craft Sausages, SunFed Perfect Produce, Nounós Creamery, Hofseth, REMA and Superior Farms.