Too Good to Go sees food waste as opportunity that’s too good to miss
Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.
Copenhagen is not only a prime destination for the world’s food lovers, with its 14 Michelin-starred restaurants. It is also a key location for haters of food waste.
Eight years ago, a group of young entrepreneurs, dismayed by the volume of leftovers at the city’s many buffet eateries, came up with the idea of connecting food businesses with eco-minded, budget-conscious consumers.
The start-up they founded, Too Good To Go, is now one of the biggest players in the surplus food market. With a presence in 17 countries, 80mn registered users, and an established base in Europe, it now has its sights set on conquering the US.
The company’s app connects retailers that have unsold food with consumers, who order so-called “surprise bags” — an assortment of items sold at a discount price to be collected at a designated time. TGTG takes a small cut, with the rest going to the partner retailer, which both makes money out of products that would otherwise end up as a loss, and gains access to new customers.
While the original mission has not changed since its foundation, TGTG’s range of partners has expanded beyond small independent businesses to encompass supermarket chains such as Aldi and Morrisons. Along the way, the privately owned company has overcome significant economic headwinds, as well as a sometimes cool reception from food policy experts, who caution that tackling the problem of food waste requires intervention much earlier in the supply chain.
TGTG, however, points out that it is accelerating investment in artificial intelligence that will allow partners to manage stock levels more efficiently. And it insists that what is good for consumers’ pockets can also be good for the planet.
“In a world that is so doom and gloom about climate change, we offer a fun solution to what is a dire problem,” says Sophie Trueman, TGTG managing director for the UK and Ireland. “If someone gets some joy and surprise, and maybe to try a new store, in my eyes that is a great solution.
Trueman, a former manager at cosmetics group L’Oréal, is clear that there is a strong commercial logic, too. “We are absolutely a for-profit business,” she stresses. But just as important is TGTG’s status as a “B corp” — a company certification that recognises businesses with social impact.
About a third of all food worldwide is wasted, according to the UN Food and Agriculture Organization. Yet some 900mn people faced severe food insecurity last year — that is, they had to go hungry. Waste food also accounts for about 6 per cent of greenhouse gas emissions, more than the aviation industry.
TGTG is not the only company to see a commercial opportunity in trying to reduce food waste. According tech data provider Crunchbase, private companies committed to reducing food waste raised more than £216mn globally in 2022.
One of the sector’s largest companies, based on equity funding, is Apeel Sciences, a Californian biotech company that makes plant-based coatings to extend the life of fruit and vegetables. Another example is Misfits Market, also based in the US, which delivers surplus produce or excess inventory from farms and food companies to consumers.
But some food campaigners argue that, in profiting from a flawed food system, food waste businesses are not doing enough to challenge it.
“There are community benefits of this business model but, if you step back, there is much more that restaurants and the wider hospitality sector need to be doing,” argues Rebecca Tobi, senior business and investor manager at The Food Foundation, a charity working to reform business practices around food.
“People often throw food away because of the ‘best before’ date when it is still good to eat,” she says, adding that requiring retailers to disclose how much goes to waste can have a big impact. “When rules are in place, we see companies acting to put them into practice”.
The Waste and Resources Action Programme, or Wrap, a green campaign group, says that clearer and more consistent labelling is an obvious starting point, along with pack sizes and formats to suit single-occupancy households.
TGTG concedes there is more it could be doing. “Yes, there is a contradiction but we are investing the revenue back into research, such as around AI, which shows we are serious,” Trueman says.
But progress towards its goal — “to inspire and empower everyone to fight food waste together,” according to its 2022 impact report — has not been smooth. The coronavirus pandemic presented the business with a severe test, as its partner stores closed during lockdown.
Trueman says the company was able to “recover quickly”, “partly due to its flexibility” — there is no obligation as to how much food partners should be selling via the app.
Another source of economic instability has been the cost of living crisis that has hit Europe in the past two years, driven by high fuel and food prices. “There is so much uncertainty still,” Trueman says, adding that the company provides a “safety net for a lot of businesses”. Rising living costs have been reflected in an uptick in subscriptions, as people hunt out food deals.
Regulation, too, has affected the company’s growth trajectory. Differences in national law, for example, help to explain why France is the company’s fastest-growing market, ahead of the UK.
Since 2016, French retailers have not been allowed to destroy unwanted food but must donate it to charities instead — prompting companies either to reduce excess stock or to find a profitable home for it. In England, by contrast, a proposal that would have required companies to report on food waste was scrapped by the government in August — a decision that both TGTG and Wrap oppose.
However, TGTG sees the greatest potential for growth in the US, where it launched in 2020. “The scale of waste there is even bigger than in the EU, it’s an untapped market for us,” says Trueman.
The company is fighting waste on other fronts, as well. It has persuaded big food brands to adopt “look-smell-taste” labels urging consumers not simply to discard food that is past its “best before” date. Last November, it announced the acquisition of CodaBene, a French start-up whose software helps businesses better manage their inventory.
“A huge shift in how we shop for and consume food is needed, and that is not going to happen anytime soon,” Trueman says. In the meantime, she adds, “We need to offer options to businesses facing that challenge.”