PROJECT

Projects

Environmental & Social Review Summary

Project Number

44111

Company Name

APEEL TECHNOLOGY, INC.

Date ESRS Disclosed

Jul 24, 2020

Country

World Region

Region

Global

Last Updated Date

Oct 10, 2020

Environmental Category

B - Limited

Status

Active

Previous Events

Approved : Aug 27, 2020
Signed : Oct 5, 2020
Invested : Oct 8, 2020

Sector

Fruit and Vegetable Preservation or Processing (Canning, Freezing, Drying, Jams, etc.)

Industry

Agribusiness and Forestry

Department

Disruptive Technologies and Funds

Project Description

This proposed equity investment of up to US$15 million in Apeel Sciences (“Apeel” or “the company”) - (https://apeelsciences.com/) - is to support its commercial expansion of its proprietary products – edible coatings – used for extending quality and shelf life of fruits and vegetables (e.g. avocados, limes, apples) amongst the emerging market retailers and suppliers in Mexico, Peru and South Africa. This financing will complement an IFC advisory engagement to set-up pilots with retailers, expand its footprint of existing suppliers and draw in new suppliers.

Apeel Sciences’ plant-derived coating (lipid-based product) for fruits and vegetables is safe, made from naturally occurring products, and its application has proven in the market to give 1.5x or greater shelf-life extension, significantly reducing costs of shrink, spoilage and water usage, and increasing produce quality. Apeel’s coating has demonstrated its efficacy across 30+ fruits and vegetable categories. By focusing on the issue of perishability and reducing the rate of spoilage across the entire value chain, Apeel products provide numerous sustainability benefits, such as (i) reduction in food loss and waste; (ii) elimination or reduction in need for single-use plastic packaging; (iii) decreased reliance on cold chain infrastructure; (iv) logistic shifts to lower-emission transportation  modes (e.g. air freight to sea freight); (v) creation of market linkages that increase the participation in the global supply chain; and, finally (vi) increased access to fresh fruits and vegetables. The ingredients in Apeel’s products are designated as FDA GRAS or “Generally Recognized As Safe” and have a substantial history of safe use. Additionally, the Codex Alimentarius’ General Standard for Food Additives (GSFA) has authorized the use of the ingredients in Apeel in over 25 food categories, including infant formulae as well as surface-treated fresh fruits and vegetables. Apeel offers products for both conventional and USDA organic certified organic producers and is allowed for us in a variety of markets including the United States, Canada, Mexico, Chile, Peru, Costa Rica, the European Union, South Africa, China, and Japan, among others.

Apeel’s products are manufactured in a powder form at its food-controlled facility located in Goleta, California (USA). This facility is located in a business park. The powder is packaged and shipped to a customer’s integration site (e.g. an agri-produce packing house owned by a grower, packer, importer or distributor) where the powder is mixed in solution with water and sprayed onto the produce before it is packed and distributed to retail stores. This process is typically in-line with the standard sorting and packing procedures of the produce packing houses. Aside from its HQ/food-controlled facility in California, Apeel has commercial offices in Europe (The Netherlands), Latin America (Mexico) and the USA.

Overview of IFC's Scope of Review

 IFC’s environmental and social (E&S) review of this investment included (i) virtual meetings with Apeel’s Chief Executive Officer (CEO), Chief Financial Officer (CFO), Sustainability Director, Manufacturing Operations and Facilities’ Senior Manager, Environmental, Health and Safety (EHS) Manager, Human Resources (HR) Manager, Supply Chain Coordinator, and Food Safety Manager; (ii) reviews of Environmental, Health and Safety (EHS) and Human Resources (HR) documents, including Apeel’s EHS, HR and Food Safety Policies/Handbook, operational permits and licenses, EHS/HR Manual of Procedures, EHS/HR training plan, monitoring/reporting system, and supply chain risk assessment and management procedures. Due to limitations arising from the COVID-19 emergency, IFC was unable to visit Apeel’s operations. Once travel restrictions are lifted, IFC will conduct a field visit, and as needed, update this ESRS and the E&S Action Plan (ESAP) accordingly.

E & S Project Categorization and Applicable Standard

Environmental and Social Mitigation Measures

Stakeholder Engagement

Broad Community Support

Environmental & Social Action Plan