‘Heavy hearts’: Food-rescue pioneer Yume Food Australia collapses under $7m debt

A national food rescue start-up that worked with Australia’s biggest brands has shut down with $7.5m in debt, saying ‘changing systems is hard’ as it ended operations after a decade.

Food-rescue innovator Yume Food Australia has collapsed into liquidation. Yume founder Katy Barfield. Picture: Chris Eastman

Food-rescue innovator Yume Food Australia has collapsed into liquidation amid a $7.5m debt pile, ending a decade-long effort to tackle surplus waste.

The Melbourne-based social enterprise operated a digital trading platform that connected food manufacturers with buyers, wholesalers and charities to sell and donate their excess food.

The company worked with some of the biggest names in Australia including Unilever, Kellogg’s, General Mills, Old El Paso, Haagen-Dazs, Ben & Jerry’s and MasterFoods.

It was founded by award-winning Victorian entrepreneur Katy Barfield OAM – who is also the founding CEO of leading food rescue organisation SecondBite.

Since 2015, Yume has returned $30m to Australian businesses and manufacturers and redistributed 11.5 million kilograms of food, avoiding 44 million kilograms of CO2 emissions and saving 2.5 billion litres of water.

The business said it was with “heavy hearts” that the board had made the difficult decision to wind up operations.

Since 2015, Yume has returned $30m to Australian businesses and manufacturers. Picture: Yume Food Australia

The business said it was with “heavy hearts” that the board had made the difficult decision to wind up operations. Picture: Yume Food Australia

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“Start-ups are hard. Changing systems is harder,” Yume posted to their LinkedIn account.

“And while we have reached the end of our runway as an independent company, we are incredibly proud of the flight path we charted.

“We set out to prove that surplus food wasn’t ‘waste’, it was a commercial asset and a climate solution waiting to be unlocked.

“To our team, our courageous buyers, and our pioneering suppliers: thank you for believing. You made a difference. The fight against food waste isn’t over, and neither are we.”

Liquidators Rebecca Gill, Robert Ditrich and Craig Crosbie of Teneo Financial Advisory Australia, who were appointed on November 18, said they are on the hunt for a rescue buyer for Yume’s business and/or assets, including the platform and brand.

“We’re currently going through the sale process, we’re still very much in the thick of the sale campaign,” Ms Gill told News Corp.

She said the business owed about $7.5m to over 35 creditors, with the majority of value in related party debts.

Non-related employees are owed a total of $66,067 from the liquidation, the majority in annual leave ($57,776), with related staff owed an additional $61,690, according to a document lodged with ASIC by director Wolfgang Folk.

Ms Barfield was previously awarded the Telstra Victorian Business Women’s For Purpose prize.

The largest creditor is related entity Yume Group Holdings owed $6.5m, with other creditors disclosed by Mr Folk including the tax office ($60,377) and Victoria’s state revenue office ($36,193).

Other listed creditors included food manufacturers The Cordina Group ($85,765), General Mills ($186,722), Mars Food Australia ($140,316), Sara Lee Holdings ($42,121) and Tassal ($111,930).

Increasing costs and difficulties in obtaining further capital were main contributors to the company’s downfall, Ms Gill said.

“ (Yume) was faced with increasing costs like many businesses are experiencing at the moment, putting increasing pressure on margins,” she said.

“We are looking further into that, and our findings will be handed down in our report to creditors.”

Businesses used Yume to automate surplus inventory management, enabling them to sell more, increase revenue, cut disposal costs, boost donations, and meet environmental, social and governance targets.

The company raised $2m in a seed funding round in January 2024, bringing its total capital raise to $7m at the time.

The company raised $2m in a seed funding round in January 2024. Picture: Andy Rogers

Ms Barfield’s passion for preventing food waste was sparked two decades ago while running a bar in Melbourne and witnessing the sheer volume of food being discarded in her own kitchen.

She was appointed Member of Order of Australia in 2023, and has also been awarded the Victorian Premier’s Sustainability Award and Telstra Victorian Business Women’s For Purpose prize.

It follows the financial collapse of sustainable packaging start-up Great Wrap in September, amid $39m in liabilities, including debts and millions tipped in by investors.

The founders of the Melbourne-based company, husband-and-wife duo Jordy and Julia Kay, previously opened up to News Corp on their heartbreaking decision to place their beloved business, once hailed as a trailblazer in eco-innovation, into administration.

Sydney-based Sircel, one of Australia’s biggest e-waste recyclers, also had administrators appointed in October with debts running into the tens of millions.

It has six sites across Victoria, New South Wales and Queensland and has diverted 8,557 tonnes of technological waste from landfill.

Yume was contacted for comment.

Originally published as ‘Heavy hearts’: Food-rescue pioneer Yume Food Australia collapses under $7m debt