I'm open to being corrected but this article doesn't offer much for proof of what this person is claiming. It starts by reaffirming ~161 billion in waste (in 2008) (termed: not eaten) and citing some of the cause of that as cosmetic defects. Then the interviewed person goes on to say it's used in alternative production as mentioned in the other comments, but offers no proof or statistics of this. And the fact that enough ugly food existed to fill the purchase orders of a number of startups going out of their way to sell it kind of implies if they weren't, it would be going in the trash.