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

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. 

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.