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January 17, 2018

Using Technology to Limit Shrink

If you ask Hazel Technologies co-founder and CEO Aidan Mouat where the idea came from for creating the technology that helps prevent food waste by keeping fresh produce edible longer, don’t expect to hear an astonishing tale of discovery. “Everybody always thinks there is this ‘Eureka!’ moment in chemistry where some flash of inspiration starts the ball rolling on a new technology,” Mouat said during a recent interview.  “Our story is a little more pedestrian than that.”

But for growers, packers, and shippers of fresh produce, the important thing is not how the technology came to fruition, it’s how it can help improve the quality of their product and ultimately their bottom line. And Hazel’s technology does just that.

The main premise behind the technology developed by two of the company’s co-founders is sustainability. They started out with a mission to try to reduce food waste by coming up with a tool that was commercially attractive to growers/packers/shippers that could help solve key problems like rejections, downgrading or not being able to reach overseas markets. “We wanted to ensure that every piece of produce grown by our customers gets to a consumer who is willing to eat it. That, at its heart, is the solution to the food waste problem,” Mouat explained.

The company was born from a chance meeting between Mouat and Adam Preslar, the company’s chief operating officer, and one of its five co-founders. At the time, both Mouat and Preslar were doctoral candidates at Northwestern University and were enrolled in an entrepreneurial accelerator program called NUvention. Mouat held a bachelor’s and master’s degree from Emory University and was well-versed in materials and synthetic chemistry. The work he was doing in 2012 on his Ph.D and as the fellow for the Institute for Sustainability and Energy at Northwestern (ISEN) exposed him to sustainability challenges and other issues that included a new understanding of the role of chemistry in agriculture.

As a bio and medicinal chemist, Preslar was fascinated with working with relatively small, cheap, uncomplicated, manipulable molecules that he could use to trigger significant physiological effects in plants and animals. With Mouat’s expertise in small molecule separation, storage and manipulation, the pair found common ground. They combined their spheres of influence in sustainability and chemistry and moved forward.

“Putting those two halves together is what really created the technology we have today,” Mouat said. “Adam showed me a very cool set of molecules and with my background and expertise, I knew how to create very cheap and biodegradable materials that can deliver those molecules in a commercially relevant context.”

The pair knew they needed other skills to effectively flesh the enterprise out, and so they recruited other co-founders, including Amy Garber and Pat Flynn.

Garber, a patent agent for 10-plus years, holds a master’s of science in law from Northwestern and serves as the company’s chief intellectual property officer. Chief Marketing Officer Flynn has a degree in computer engineering from Northwestern. A fifth co-founder is no longer with the company.


The Technology and Its Sustainable Upside

Pedestrian beginning aside, it’s the technology that sets Hazel apart from others who dabble in this arena. Hazel’s core technology uses a small sachet that can be placed into master cases of produce. The sachet stores and time releases small amounts of an active ethylene inhibitor, 1-Methylcyclopropene (1-MCP), into the atmosphere of the produce that physiologically slows the aging process, improving quality and extending shelf life. “It seems simple, but it’s really not,” Mouat said. “There are a couple of simplifying factors—like the low concentration threshold—that make the chemical engineering much easier to attain.”

Most produce has a low threshold for application. Once the 1-MCP is applied and the saturated concentration level is reached, the effect is the same. All of the produce in the case is protected evenly.

1-MCP has been in commercial use, mostly by the fresh produce industry, for 25-30 years. The company that first commercialized it applied it through a fumigation process, but doing so limited its effect on most produce. Mouat and Preslar recognized that the problem was not with the compound, which Mouat describes as “phenomenal.” The problem, he said, was with the delivery system and how it was applied.

Mouat explained that he and Preslar changed the function of the materials to slowly release the active ingredients instead of doing it as a single shot, providing two benefits. The first is that the slow release application technology improves the response of the produce over single shot applications. The second benefit is that customers don’t have to change anything about their shipping and packing practices.

Mouat said they can change the dose rate of sachets to give customers different shelf life times. “We can literally dial in the shelf life requirements of each particular supply chain. It’s something that has never been done before and has gotten our customers fairly excited,” he said proudly.

“We have found this really cool sweet spot where our stuff is really effective and as a result, it gives customers one of the longest shelf life extensions they can get,” he said. “We’re not aiming for absolute length, we’re aiming for the right length and that ties back to our creedo: ‘We aren’t trying to make food last forever, we are trying to make it last long enough to get eaten.’”

The technology even fixes ‘ethylene crosstalk’ issues. Crosstalk prevents certain produce from being shipped with other produce since doing so speeds up the ripening process of some fruits and vegetables. “Our technology allows us to mix and match shipments,” Mouat said. “We have a customer that violates every rule of shipping by transporting all kinds of produce together, but because he has our product, that’s not a problem.”

The product doesn’t require users to change their shipping and packing practices. “That is something they customers can really appreciate it,” Mouat said. “We want to work with them instead of forcing them to work with us.”

One thing that will positively change for customers who use Hazel’s technology is their ability to reach new markets, particularly in Asia. Export crops typically generate more value than domestic crops due to better overseas prices, but the longer transit times are a challenge. “We have had a lot of customers get very excited about being able to throw our sachet in their box and get their product overseas with minimal freighting charges and maximum quality,” Mouat said.

Surprisingly, the technology is something the founders nailed on their first iteration, never having to go back and tamper with the original invention. Mouat attributes some of that success to luck but believes it is mostly because the team employed a ‘Keep it simple’ philosophy during development. Instead of being tempted to delve into more sophisticated engineering, they chose to work with nature’s most basic molecules keeping their customer’s bottom line in mind. Finding a cost effective solution was necessary to make their technology practical. “Our technology had to be cheap, effective and durable and had to be something we can mass manufacture because ag is one of the highest volume industries on the planet,” Mouat sad. “Having that philosophy is what guided us, and as a result, it was harder to fail.”


What’s in a Name?

After a free-association brainstorming session, the group chose the name ‘Hazel’ because it’s a color that helps reaffirm the company’s commitment to green chemistry without directly using the ‘green’ moniker evoked by so many other start-ups. “We really want to remind people that we are trying to promote a technology that is sustainable and eco-friendly,” Mouat said. “There are also naturopathic associations with the name,” he added, making reference to hazel plant and nut.

Perhaps one of the more interesting reasons for the use of ‘Hazel’ is that it also happens to be Adam’s grandmother’s name. “That made it relatable and personal for all of us,“ Mouat said.

In the end, they knew they got the right name when people started referring to the technology simply as ‘Hazel.’  “When you get that kind of brand stickiness, it’s clearly resonating with the customers, so we weren’t going to change anything.”


Growth from Western Growers’ Ag Sharks Investment

The company is still currently in the process of scaling up its operations, in addition to working through some manufacturing limitations and regulatory hurdles before it can make a move to become more publicly visible. Mouat believes they should be able to openly sell the product on the open market sometime this summer.

In the meantime, the co-founders have focused on developing relationships with their existing customers, prepping them for a full rollout of the product once they pass the company’s pilot stage. Mouat said this allows them to control of production quality and volume while also allowing them to collect real-time commercial data. The data they collect will let their customers know definitively that Hazel is doing the right thing and helping their business.

When the time comes, a large part of the $2.5 million in funding they will get as a result of participating in Western Growers’ first Ag Sharks’ event will provide the Hazel team with the needed capital to engage in serious expansion efforts. “We’re hiring new folks in January and doubling up on our production to fill customer demand,” Mouat said. “By summer, we expect to be hitting the market in a much bigger way, because of the visibility and money we got through Ag Sharks.”


The Future

When asked about where he sees the company in five years, Mouat said he hopes their global strategy will allow their technology to have a presence around the world, particularly in target areas like Latin America, Southeast Asia, Brazil, the European Union and Oceania.

He also sees it being an important technology for emerging markets that have a lot of arable land and little or no refrigeration or transportation infrastructure, such as in Africa, India and China.

“Being able to create drop-in technologies that can help extend produce shelf life without having to make multi-trillion dollar investments in infrastructure is a very powerful and lucrative tool that can help prop up agriculture and develop export markets in any emerging economy,” he said.

Continuing with his vision for the future, Mouat added, “One day, I’d love to see every case of specialty produce sold on the planet have a little stamp on the side of the box saying, ‘Protected by Hazel Technologies.’ And that will tell people where the quality and freshness is coming from.”