If wasted food were a country, it would be the third-largest producer of greenhouse gases, just behind the U.S. and China.

One of the biggest, but lesser known, problems in the food industry, “ugly” foods contributes to this growing waste issue, as farmers, retailers, and consumers toss aside produce and other products that appear less than perfect.

Now, entrepreneurs and chefs are giving these typically rejected foods a second chance, with clever tactics and savvy marketing.

At last month’s TEDxManhattan event, with the theme “Changing the Way We Eat,” Food & Wine editor-in-chief Dana Cowin talked about world-renowned chefs turning unattractive ingredients into beautiful dishes. Dan Barber closed down his award-winning Blue Hill restaurant in New York City to launch a pop-up restaurant with guest chefs who used nothing but the perfectly edible scraps typically thrown out, such as kale stems and carrot tops, turning trash into haute cuisine.

In Europe, a group of Welsh students opened an ugly produce shop last month, featuring such taglines as “beautiful on the inside.” Even the EU changed regulations to reduce waste, dropping its rules that forbade the sale of rejected produce. Canadian grocery chain Loblaws launched a line of “naturally imperfect” fruits and veggies.

“The phenomenal success of the food industry is in producing as much gorgeous product as it does while charging so little for it,” explained Doug Rauch, former president of Trader Joe’s, current CEO of Conscious Capitalism, and the founder of the retail project Daily Table. “What is unnatural is that we have become divorced from any real connection with how food is grown, and the fact that much of it isn’t a beauty queen.”

Daily Table collects excess food and ingredients commonly regarded as unattractive to create ready-to-eat meals and sell as regular grocery items, like bread, produce, and canned goods. The first store, launched recently in inner-city Boston, is a testing ground for the concept.

Everything is priced competitively with fast food and other “junk,” as Rauch said. He believes the hunger problem is based on a lack of nutrients rather than a lack of food, with impoverished families turning to the empty calories of fast food instead of whole foods. Finding ways to get edible, healthy “reject” food into their hands would help to solve two major food issues in America, he said.

It’s a stance also taken by Compass Group, the largest foodservice provider in the world. Through a program that launched in March, the company educates its farmers and producers on food waste while putting its money where its mouth is, paying for otherwise rejected produce such as broccoli fines (the one-inch pieces of broccoli that have fallen off the heads during the production process) as well as organic leeks, potatoes, and carrots.

Compass Group’s chefs use these ingredients to feed millions of hospital patients and college students each day. A pilot program last year saved more than 10,000 pounds of 31 varieties of fruits and vegetables, the company reported.

“The amount of food that is wasted is appalling,” says Christine Seitz, vice president of culinary for Compass Group USA. “We can create systems so farmers will want to pick the product that is not perfect when they have a market to sell it to.”

Farmers markets are one channel that has eschewed the shunning of imperfect produce. In fact, consumers expect produce from a farmers’ market to look odd, more natural and imperfect, and the continual growth of farmers’ markets has been slowly educating consumers about what natural looks like when it comes to the plants people eat, Rauch noted.

“The funkier an heirloom tomato looks, the more attractive it seems to be from a marketing standpoint,” he explained. “We could just call it all ‘heirloom’ and the problem would be solved.”

Still, industry professionals don’t expect the issue of food waste to end any time soon. The U.S. Department of Agriculture estimates nearly 40 percent of food in the U.S. is wasted each year; while that isn’t always before the food hits the shelves, it is the best tracking statistic available on the ugly food problem. The inability to present hard facts only adds to the challenge of building awareness for consumers and even some in the food industry.

“It’s a bit of a chicken-and-egg situation with consumers and retailers,” says Elizabeth Bennett, founder of Fruitcycle, which makes a line of fruit snacks, such as apple chips, from locally sourced imperfect fruit.

“We’ve come to expect perfect produce … at the grocery store,” she said, “and both the growers and the retailers will reject anything that’s not the right shape or color.”

Fruitcycle apple chips

Bennett recalled a time when she attempted to buy “expired” bananas with a few brown spots in a D.C.-area grocery store. Store employees were collecting them from the display, and told her she couldn’t buy those particular bananas—they were being sent to composting in New Jersey—because it was part of the store’s national policy on sell-by appearance. One grocery store employee had already been fired for permitting a sale in a similar situation, she was told.

“You can make delicious products out of ugly produce,” Bennett asserted. “We should already know this, but it proves it’s what on the inside that counts and that it all tastes the same if you chop it up.

Bennett said the onus of education falls on the industry more than consumers. “We have a responsibility, along with retailers,” she said, “to educate people and normalize the fact that produce comes in all shapes and colors.”