Podcast: Down to the Roots: Tony Fernandes and The Rotten Fruit Box

There is something rotten about Tony Fernandes’ startup venture in Portugal.  If you visit this westernmost country in Europe, you will find countryside here dotted with villages, charming farms and small orchards.  This corner of the world is quaint and welcoming, surrounded with European greenery and warm wind blowing in from the coast. Tucked into this beautiful landscape is a small company that sells to consumers in over 100 countries around the world, all based out of just a single warehouse and office. This sustainable enterprise is freeze-drying fruit from local farms that would otherwise go bad, hence its name: The Rotten Fruit Box. Behind this solo startup, is Tony Fernandes.

The Spirit of an Entrepreneur

Tony grew up in rural Portugal but moved to the United States with his parents at the age of 16, in the 1970s. He attended the University of Connecticut, where he studied actuarial science, which uses math to assess risk in business. After graduation, he returned to Portugal with two ideas. The first, that he wanted to start a business, so he could work for himself. The second was that he couldn’t do that in America because, in his words, “everything had already been done there.”

Tony started his first business as an importer of goods into Portugal. He saw huge discrepancy in prices for Levi jeans between the US and his home country. So, for a short time he capitalized on this disparity by importing American jeans and selling them for less than local Portuguese stores.

His next enterprise was similar but in the realm of accessories.  Although he did not pursue this business for long either, it introduced him to the online marketplace, which was the key to his future as an entrepreneur. Tony told me how he picked up a pair of earrings and decided to sell them on eBay as an experiment.   They sold quickly.   Given that this was in the mid 1990’s, and early in the development of the internet, Tony was ahead of the curve of internet marketing.

After some fits and starts in the global online marketplace, Tony found new inspiration in December of 2017. While traveling in northern Portugal, he saw heaps of fruit wasting away — pears, peaches, persimmons, just to name a few — left rotting on the ground. Many of these farms and orchards only grow produce for themselves and small, local markets. Meanwhile, fruit ripens rapidly and en mass during a short period, leaving little time for those without a large consumer base to process it all. The disconnect between supply and demand resulting in so much waste gave Tony an idea.  And so, the Rotten Fruitbox was born.

The Age of Exploration

Portugal, historically a great maritime nation, is famous for exploration.  In the 16^th Century, Portuguese explorer Magellan planned and led to his first expedition that circumnavigated the globe and opened global trade routes.  Like Magellan, Tony is also an explorer.   He had to investigate how to dry fruit so it could be stored, transported, and sold.  

Tony first experimented with dehydrating the fruit using air drying equipment, and although this produced some tasty results, the chemistry of the fruit was altered, forming more sugars and destroying the vitamins. He was committed to creating a healthy snack, however. Upon further experimentation, Tony discovered freeze-drying the fruit as the perfect solution. Freeze drying affects the nutrients of food minimally.  It allows the product to be stored for a year in ordinary packaging and for years when vacuum sealed.

The company is still quite young, but up until recently, Tony was running the operation entirely alone. He finally hired a production expert, and together they have expanded from a single warehouse to include a second location from where they ship. He also hired a social media and customer service manager, enabling him to focus on the company growth strategy.

One unexpected challenge for the company was sourcing the fruit itself. At first, it was easy to secure fallen fruit from a couple of small farms, but as the Rotten Fruit Box grew, he found it difficult to expand his supply. At one point, he tried running local Facebook ads, but gave up that idea with little success, realizing that local farmers were not frequenting Facebook. He had to find his suppliers on their own turf.  Tony meets and greets farmers at local Portuguese markets and farm by farm, he is building a steady supply chain network.

Although social media has not helped him connect with farmers so far, the Internet is critical on the marketing side of the business.   The Rotten Fruit Box market in Portugal is small.  His customers are all of over the world, and they find him, through the help of advertising on social media.  Tony says that his business model would not have worked a few decades ago let alone in the age of Magellan.  Now he has an international customer base. “If people resonate with your message, it just grows and becomes a snowball effect.”

A Sustainable Epiphany

The Rotten Fruit Box is invested in sustainability. Not only is the company reducing food waste, converting rubbish into a resource, Tony is helping combat global warming.  The carbon emitted from rotting fruit is surprisingly enormous.  If food waste were counted as a country, it would have the 3rd highest impact on global warming in the world! The Rotten Fruit Box also plants trees to offset its carbon footprint, and it sources their packaging boxes – made from recycled paper – locally, meaning a reduced carbon footprint from shipping.  Currently, Tony is in the process of making all the fruit packaging compostable, which is particularly tricky because it must be airtight to ensure the fruit will last.

With these many commitments to sustainability, I assumed Tony must be a life-long tree hugger.  Actually, his interest in the environment is only a recent passion and one that he garnered through growing his company.  When he first launched his enterprise, he only wanted to put rotting fruit to good use and help local farmers. But, after he realized the strong effects of rotting food on carbon emissions and climate change, he also realized he had an opportunity to make difference towards a healthy planet. Like any good entrepreneur, Tony listened to his customers, who care about the environment.   They have contacted him with specific suggestions and many of the improvements to make the Rotten Fruit Box more sustainable have come from the customers. 

Tony talks about his past enterprises without the passion for his current business, saying that he only focused on them as long as they held his interest. They were merely a vehicle for him to make money, rather than achieve a mission. But his attitude about The Rotten Fruit Box is different. Tony seems to have found a personal mission too; he signs off his emails with quotes from the likes of Robert Balden-Powell (founder of the Boy Scouts) and Mahatma Gandhi. Tony talked about how important it is for him to be self-aware, acknowledging how much he is learning every day.   “Those are the two most important things, self-awareness and self-improvement.” His clear vision for the fruit box is to make a difference, and he wants to make it big.

Taking Root & Spreading Wings

Tony’s next step, in line with his personal goals, is growth. He wants to set up centers in countries with the highest customer concentrations, like the US and Canada. to minimize the distance between supplier and consumer, which is good for business and the environment. The more locally the food is sourced, the more the food transport miles are reduced, lowering the carbon footprint.

When I asked Tony what advice he might give his younger self, after an initial reflection that he does not have any regrets, he finally responded while laughing, “don’t invest all the money you have your senior year of college in just one stop.”

My observation is that Tony is enjoying life. He’s found a passion, he’s committed, and he has a vision. His upbeat attitude throughout our interview was palpable. In the face of many difficulties and failures, Tony chose to interpret adversity as a growth opportunity. 

After years of exploration and experimentation, Tony has found his place.  He has found something meaningful enough to slow down and take on a long-term commitment. Much like the fruit tree, which grows for years before it can yield a harvest, Tony journeyed for decades before bringing a company to fruition.   True to the famous Boy Scout quote of Robert Baden Powell quote that Tony includes in the signature line of his emails, he is committed to “leave this world a little better than you found it.”

Portugal is known for its trade of cork, sardines, and its famous wine, Port.  Thanks to Tony Fernandes, Portugal can add rotten fruit to its list of exports.

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