How To Reduce Food Waste In Restaurants

How To Reduce Food Waste In Restaurants (The ROI Is Massive)

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Food waste hurts the environment and your profits. 14% of the food that enters your kitchens never reaches the customer. That’s a percentage that comes at a high cost, but when food waste is managed correctly, it means a significant increase in your profits.

That is why we’re excited to have Franco Prontera, country manager of Too Good To Go, join us to talk about reducing food waste in the restaurant industry. Franco and Carl discuss the impact of food waste, different strategies to prevent waste from happening, and how better data is accelerating a waste-free industry. A little teaser? The ROI of food waste reduction on a company level is massive.

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Carl: Hello, I’m Carl Jacobs and in daily life I’m the co-founder and CEO of Apicbase. In this podcast, I’ll be looking for answers on how to grow and scale your food service business. I’m talking to numerous experts who’ve done the same in the past. Welcome to the Food Service Growth Show.

In this episode, I talk to the country manager of a company whose vision is closely aligned with that of my own, eliminating food waste for a healthier planet. That’s why I’m absolutely thrilled to be talking to Franco Prontera, country manager of Too Good To Go.

All right. Welcome to the Food Service Growth Show, Franco. Thank you very much for joining us. I’m very happy, actually, that you are joining the podcast because you are the country manager of Too Good To Go in Belgium, and Too Good To Go is something that is, of course, very near to our own heart because as CEO of Apicbase, I am of course, let’s say on the other side of food waste in that sense that we try to help businesses to, let’s say, order in a better way and inventorize in a better way so they don’t buy too much so they don’t have to throw stuff away. Our vision is a healthy planet and a healthy bottom line. So Too Good To Go has nearly the same kind of, let’s say, vision. I assume we will have a nice discussion about that a bit later on.

But before we go into Too Good To Go and into the growth of food service, can you tell me a little bit who is Franco and where are you coming from?

Franco: Yeah, of course. And likewise, I’m also very happy to be here. Let’s say we’re colleagues in the fight against food waste, where you’re more in the beginning, let’s say in the prevention phase and where we are more towards the end in the reuse and recycle phase. No, but very happy to be here. As indeed I’m Franco. I’m the country manager of Too Good To Go Belgium. Yeah. Who am I? I’m a young dad. I have a kid. Almost two kids in March. I’m 31 years old. I actually started Too Good To Go in Belgium from the beginning, five years ago. And together with 4 or 5 people, we grew the company to today, which in Belgium 40-45 people.

Yeah, a bit about myself. I’ve always got the bug of entrepreneurship, but I’m a scientist, I’m a biologist and ecologist actually. So always had this affinity and passion for the environment. And I was always looking for this crossroads between entrepreneurship, innovation, technology and sustainability, which I really found in Too Good To Go five years ago. So super excited with the team to make as much impact as possible in the food industry by preventing and fighting food waste. Yeah.

Carl: All right. So, as an entrepreneur, I’m very interested always in founders’ stories, although you’re not, let’s say the founder of Too Good To Go in, let’s say the original one.

How did it come on to your path? Like, why? How did they end up with you or you end up with them?

Franco: Yeah, yeah, yeah. And thanks for asking, because I also kind of like the story because it’s a lot of, let’s say coincidence. So, I had a startup before focused on innovation and technology, did that for about three years. I loved doing it. Learned a lot, but failed very hard. We were ahead of the market and in the end, the product was not what the consumer or the customer wants and then it stops very quickly. But then I went a bit of soul searching in Asia, as you then do. And on that trip to Myanmar, of all places, I met actually, Jonas. Jonas is the founder of Too Good to Go Belgium. So actually, on that same trip, he got to know the concept from two Danish people. And while meeting him and traveling with him in Myanmar, we talked about entrepreneurship, social impact, how we could use entrepreneurship as a force for good.

And then a few months later, I got a phone call from him and he said “Hey, do you want to come to Ghent? Because I got to know this concept Too Good To Go and I’m going to bring it to Belgium. Do you want to join?” So it actually started a bit in Myanmar, so to say. And then a few months later, I was sitting here in Ghent in the old library with four people just hustling to get Too Good To Go started here.

Carl: An interesting story, actually. And sometimes you have to travel the world to meet somebody from your own city.

Franco: Yeah. Exactly.

So five years ago, how old or how long ago did Too Good To Go as the original concept start? And how fast was it in Belgium?

Franco: Yeah. So not that long ago, actually in 2016, it started. Actually in Denmark. Actually, the true founder story let’s say is a story of five individuals in five countries having a similar idea. But rather than starting five competing companies, let’s say, they said “Hey, let’s join forces and do it in our own countries.” So one app, but we roll it out in our own countries, France, UK, Denmark, Norway. And that was 2016.

That went well but went fast, went a bit chaotic. And then about a year later we got our current CEO Mette on board. She had a lot of experience with scaling a marketplace. She had founded Endomondo, a sports app, and sold it. So she was looking for her next adventure and she caught eye of Too Good To Go invested, became CEO and then she actually prepared the company to scale to other countries. And that happened for the first time again in 2018 with launching the Netherlands and Belgium.

So you might say that seven years ago, Too Good To Go started and about five years ago, Too Good To Go Belgium started. Yeah.

All right we’ve talked a little bit about Too Good To Go in the founder way but just you know for listeners that don’t know Too Good To Go, they must have lived on another planet, but can you pitch it in 30 seconds? What is Too Good To Go?

Franco: Yeah, of course. So Too Good To Go is a classic marketplace application, or we are a social impact company, but we’re most known for our application, a marketplace application where we connect consumers with food businesses to actually save unsold products and meals at the end of the day. So as a consumer, you download the app, it’s a free app, and based on your location you see which food businesses fight against food waste. You pick one sushi, Italian restaurants, supermarkets, you pay in the app. And then at the designated time, most of the time it’s the end of the day, the end of the shift, you go there with your own bag and container and you get a magic bag.

A surprise bag is a concept that the food business doesn’t really know what is left at the end of the day. But as a consumer, you know that if you’re ordering, let’s say a magic bag at sushi, you’re going to get sushi and not a spaghetti bolognese. So, this is in, let’s say, in very short, how the application works. Yeah.

I actually, honestly, didn’t know the surprise part. How did that come into being? Was this an original concept or is this something that evolved over time?

Franco: No, it’s really the original concept and the philosophy behind it’s really about fighting food waste. It’s not really ordering discounted foods because there are apps like Deliveroo and Just Eat for that, but because it’s food waste, and let’s take the example of the Italian restaurant. They don’t really know what’s left at the end of the day. But often restaurants, but also bakeries or supermarkets, have some sort of unsold products.

So what the concept of the magic bag is, we determine together a value. Most of the time it’s around the retail price of €15, and it sold for one-third of the price around €5. The compromise for the consumer is that it’s cheaper food, but for the store owner, we make it as easy as possible and which means that they only have to think about this €15. So it could be a meal, of €15, it could be a couple of products, a couple of let’s say desserts. And the consumer knows the value is going to be €15 and the store owner knows I can put anything, what I have unsold, for the value of €15 in that bag. That’s a little bit of the compromise between the two of them.

Carl: So you were saying that the bag is then filled with €15 worth of value, and then it’s sold at €5. Out of curiosity then, what’s the business model of Too Good To Go? I mean, in the end, you also have a team. You also have to make a living. How is it, let’s say, organized between, let’s say the business, the food business and Too Good To Go?

Franco: Yeah. So it’s a good question and obviously I’d love to answer that. So we have a classic commission model so per meal save per magic bag. We actually have a commission of around €1-€1.20 something like this. And we don’t work with, let’s say, there’s a very low threshold of commitment.

So for independent stores, the bakery around the corner, there’s actually not even a contract. So there are of course the terms and conditions. But there’s a very low threshold to just join, say, food. And if you want to stop, you stop. There will never be money, let’s say, transferred from the partner to us. It’s we collect the money that the consumer pays and we just pay out everything minus our commission. So it’s really a no cure, almost a no cure, no pay model. If you don’t save anything, you don’t earn anything, but you also don’t pay anything.

Carl: And instead of throwing it away, they still make a little bit of money on the things that they were going to throw away anyway. So it’s a win win win. All right. We’ve now discovered a little bit about you and Too Good To Go. It’s a very interesting concept.

How big is this issue of food waste? Can you give me an overall view of that? I guess you or Too Good To Go have done some research on this. So how big is this problem in the world?

Franco: Yeah. Yeah, it’s pretty big. It’s pretty big. I’m not gonna lie. So, actually, it’s a huge issue. If you look at the statistics, more than one-third, close to 40%, actually, of all the food that is produced worldwide ends up in the bin. That’s a lot. That actually comes to around 2.5 billion tons of food every year. That’s very conceptual, of course, but it’s around 80 tons per second. If I give keynotes of half an hour, I often say like in this keynote, about 144,000 tons of food is wasted during this half an hour. This is a number I know by heart because I tell it a lot. Of course. But it’s huge and it has an impact, let’s say, on three different levels. The most obvious one is economic. It costs a lot of money, that waste, and estimations and calculations with WWF and FAO say it’s around €1 trillion every year. I think in this day and age we can do a lot more with that kind of money instead of wasting it.

Second, is the social aspect, right? There are close to 900 million people every day going to bed with hunger, and we actually waste more food than there is hunger in the world. So it’s really almost an embarrassing problem. Right. And the last one, which is a little bit where we focus on and where we also claim to be experts on food waste is the environmental aspect.

So about 10% of all greenhouse gas emissions come from food waste, not food production, but food waste. And let me illustrate that a little bit with an example. If you buy a fish in the supermarket or let’s say in a restaurant, you make a reservation and you say, we come with five, and the menu is prepared by the restaurant owner and you only come with four. So one fish is actually prepared for nothing and ends up in the bin. That fish had quite a journey before it ended up in that plate. Right. It got caught by a boat that went out to sea, and stayed there. The fish is cooled. The fish is transported, maybe even transported from Norway to Belgium. And the restaurant owner had to go to the shop or maybe the early market to get the freshest fish and also drove home, put on the stove with gas, and heated the fish. And that whole journey is actually for nothing if it gets wasted.

So there’s also an enormous environmental impact of this. So the problem is pretty huge. Yeah.

Carl: And of course, if you’re talking about 40% waste, I guess you’re also talking about the banana. I’m not being the right shape or the cucumber not being the right shape.

Can we pin it down a little bit and move into the restaurant industry, which we are both serving? And how is it going there? Actually, what’s the size of the issue within the restaurant industry?

Franco: Yeah, yeah, for sure. That’s a good question. So when I started at Too Good To Go, I didn’t really know how big of a problem and how complex this problem was because, in the end, you don’t ask people to eat differently. You also don’t ask people to eat less. You actually just say like, can you finish your plate? But obviously, it’s more complex than that.

If you look at the value chain of food from production to consumption and let’s take EU the value chain of food, you see that in every segment there is actually a percentage of waste occurring right. In production, obviously there’s veggies and fruits staying on the land, in the storage and the processing, in the transportation. But yes, and then we have food services, retail. And the data here to be found is a little bit outdated. I must admit it’s from 2017. But about 14% of all food waste actually comes, in the EU, comes from food waste in food services. So that means catering, hotel restaurants and this area. Yeah.

Carl: Oh wow. That’s still very much actually. Yeah. Especially in a business where you could, you know, potentially manage this much better by inventorizing and ordering in a smart way so you don’t have to throw it away. But of course, we do understand and we do know that this is a big issue in the industry.

Can you tell me a little bit about how to fight this food waste? I mean, we are both in the same industry in a sense. On the other sides, let’s say. But can you tell me a little bit about different ways of fighting food waste?

Franco: Yeah, yeah, sure. So you have this scientific model, it’s called the hierarchy waste ladder. And that has like different stages on, let’s say the priority you should use or should apply on preventing food waste and actually waste, in any case. But let’s say food waste, and that is first of all, prevention and reducing the potential food waste is the most important thing you can do. Right. And that’s where you are, obviously with the company very active in, is really trying to predict as precise as possible what the consumption would be and adapting then production or purchase behavior. That’s really the most important thing you can do. Prevention. That’s not always possible, of course. So then you come to the reuse.

So that’s a bit where Too Good To Go comes to play like these plates, dishes, products that are not sold. How can we bring them back in circulation? How can we revalue them and hopefully as close to the original value that was possible. That can be in multiple ways, discounting products, for example, using Too Good To Go as an example. But there are other examples.

Then you have recycling. It’s a little bit different than reusing in the sense that you actually use maybe parts of a product and you make something new out of it. A classic example in Belgium is using bread leftovers in this kind of bread pudding which they then sell the other day. So it’s kind of recycling these ingredients. And then you have like recovering and that’s most of the time recovering is more in the form of energy. So turning it into biogas is also an option, obviously. And then disposal is really the last thing you should do and that is more on, yeah it gets in landfills.

So let’s say there’s a couple of things in there as well. For example, donation is also in the reuse. So I would say there’s prevention, there’s reuse and donation and there’s recycling and then trying to stay as much away from recovery and disposal at the end. Yeah.

Carl: Of course. We’ve now talked about food waste and how big the issue is. And actually, I mean if you’re not yet using something like Too Good To Go, you should be using it after that you’ve heard this podcast, in my opinion. But what we sometimes notice and experience ourselves as well in the industry is that a lot of people are interested in reducing food waste. But reality strikes and says, okay, but it shouldn’t cost me anything. Or at least what’s in it for me kind of situation on a shorter term.

Is there anything you know about this? Like what’s the direct ROI on saving, food waste?

Franco: Yeah, that’s a good question. That’s something that we also get confronted by, right? There’s this lack of knowledge, there’s this lack of understanding on what these investments can actually mean. It’s not only nice to do, it doesn’t only give you a good feeling, but it’s also really an economic advantage. And there’s research. So there’s a couple of UN independent research institutes who work on this, on food waste. Yeah, food waste champions. You have also have SDG 12.3.

So there’s a lot of attention to this issue. And there’s this company, it’s a UK founded company. It’s an independent link to the UN and it’s called Wrap, it’s considered, let’s say, the worldwide knowledge center on food waste. And they have done research where they show that for €1 you invest in prevention of food waste, the ROI is actually €7. So it’s really worth the investment with different systems, with different trainings on multiple ways to improve the bottom line, as you said. But actually also there’s a lot of top line growth in there as well.

So extra revenue on multiple ways and we touched Too Good To Go. That’s definitely one. But if you make a new product and this product sells well, it brings in new customers and these customers may be first timers that never came to your shop or restaurant, which will stay. And this is all part of this initial investment.

And another thing which is very interesting, and maybe I’m a little bit all over the place, is now also the employee or your team benefit of this is also really not to be underestimated. The feeling that your employees get on contributing to prevention of food waste and often actually the food they prepare themselves. So all the time and energy they put in, if they see that their employer or their team members help you prevent all that delicious food going to waste, that contributes to employee happiness, employee retention. And we all know how hard it is to find good people nowadays. So that’s also something that’s very important and which is sometimes hidden in there. Yeah.

Carl: Sounds very reasonable. And honestly very interesting that you mentioned this Wrap. I didn’t know them, so I’m going to look them up after the show. But a question, let me get back a little bit to the entrepreneurial part of Too Good To Go. A question that I’m interested in is okay so you have a beautiful concept, beautiful app, a lot of people using it but are there still businesses that you go into say, hey, we are Too Good To Go are you interested in using us? And businesses say no.

What are the objections that they have and why would you not want to use an app like Too Good To Go?

Franco: I love it. How motivated and enthusiastic you are about this. So we definitely share that. But there are still restaurant owners and food business owners, let’s say, who are a bit skeptical or even, let’s say, not joining. And sometimes there’s good reasons, right? Sometimes there’s really good reasons in a sense that there are companies who have it figured out. They have solid donation schemes. They fight food waste with giving the meals or the products to employees and team members. And that’s super fair. We will never go in competition. Our mission is to fight food waste in any way. If we can give advice, if our system comes to play, if our system is complementary, that’s all fine. But I guess and if I compare the sentiment of the conversations that I’m having over the past five years, I must admit that the sentiment or the, let’s say, the opinion about preventing and fighting food waste is already evolved in the positive sense.

I think there’s a much more, let’s say, strong foundation than five years ago that is definitely driven by cost, definitely driven by consumer needs and wants. But still there are a couple of companies or business owners where we step in every day and that say “hey, actually this is not interesting for us.” And the main reasons here are, if you implement a new system, it is often associated with extra work.

And nowadays it’s really crunch time in all these food businesses. Retail. It is not easy. It is busy. Let’s say, this perception of the extra work is just because of a lack of understanding how the system works. So it’s also about coming in at the right time with the right timing. And just being able to explain it in a few minutes thoroughly when people have the time to listen is important.

There’s a lot of mouth to mouth, let’s say, where we got to know and where people got to know us. Sorry. And that causes that people don’t always get the right concept. So they. They think “Ah Too Good To Go. It’s that thing, right?” And they actually don’t really know how it works, but then they think they know. So they are already opinionated. And then the cannibalization of the own business, that’s an important one. So there’s sometimes this perception that if I would join Too Good To Go and I would have magic bags with a reduction from €15 to €5. I’m actually cannibalizing on my own customers because actually they just wait at the end of the day and then they just order and then they have it for €5 instead of €15.

Yeah. And that’s also something that we need some time to explain because it’s not at all possible. And actually there’s no cannibalization whatsoever. And the reason why is, first of all, you don’t know what you’re going to get. So you can wait maybe until the end of the day. But at the Italian restaurant that you really want that spaghetti carbonara, you might as well get cannelloni, you might as well get five portions of tiramisu, but you’re not going to get that carbonara for sure.

Actually, in most cases, you’re not going to get it. And the second thing, I really like this, it feels a bit counterintuitive, but if a magic bag is up for saving and during the day you save it, it might as well be that during the day that restaurant keeper had a fantastic day. A lot of clients come over and they’re actually sold out. He has the right to cancel that order and say “Hey, you know what? Fantastic news. Today there’s no food waste in my place, so better luck next time.” So there’s also this uncertainty. Let’s say, whether or not you’re going to get it. And these two things actually prevent the cannibalization. Yeah.

I’m also maybe, you know, to finalize the conversation, a little bit interested in your vision on the role of technology and data in the battle against food waste. Do you have any opinion about that?

Franco: I think it’s absolutely key. Technology. Technology is a means, right? It’s a tool to get somewhere and with the right vision and mission, technology really can be used in such a powerful way as a force for good. And to start, we chose to use an app, a marketplace because this is very scalable. It’s very cheap for all the stakeholders, technology that, it becomes cheaper the bigger you become, right? Because it’s so scalable and copyable.

So I absolutely believe that technology and data are key to fight food waste because the problem is super complex and we will need technology and systems that are interconnected to help fight this. And a recent example is we actually acquired a company a few weeks ago. It’s called CodaBene. They have a tool, food memo, which is a tool that is used to scan supermarket products and actually immediately suggest what they could do with this. Obviously, a solution is Too Good To Go, but donation is a solution. Discount stickers is a solution. And it’s actually to help the food business value this food and repurpose it in the best possible way, depending on the expiry date or the type of product or the type of weather.

But actually, and now I’m dreaming out loud, Carl. But actually linking systems like the two of us, for example, working both on prevention and reusing, I think is absolutely key. And then we only talk about food services. Imagine if we could even move technology to production and transportation and even consumption with fridges at home. So I think there’s a lot of interesting, cool stuff heading our way. It’s just us entrepreneurs who need to grasp the opportunity when it comes and find solutions to create value for businesses to prevent wasting food.

Carl: All right. Yeah. What you are saying in the end is absolutely true. I also think that, you know, combining forces is going to help the food industry tremendously. And as you were saying dreaming out loud. Also from our side, there is a lot of interest in seeing how prevention and what’s the second word I’m looking for? Prevention and donation or recycling can work together hand in hand.

So on that bombshell, I think it’s great to thank you very much on joining us today in this podcast. It was very interesting and I hope also our listeners now who don’t know Too Good To Go yet they do know now and thank you very much, Franco, and see you next time.

Franco: Thanks for having me. It was great. Have a great day and see you next time. Bye bye.

Carl: What a great conversation with Franco. The main takeaway for me is that to help reduce food waste, there is a great business opportunity for your restaurant. I hope you enjoyed the episode as much as I did. We have many more fantastic guests coming up, so don’t forget to like and subscribe. This is it for now. Until next time.

This webinar is best for:

What you'll learn:

Guest & Host

Franco Pontera

Country Manager
Too Good To Go

Carl Jacobs

Co-founder & CEO
Apicbase

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