Business breakdown
The $162M Business Tackling One Of The World’s Biggest Problems (Too Good To Go)
The $162M Business Tackling One Of The World’s Biggest Problems (Too Good To Go)
The basics
Too Good To Go is a food waste platform that started in Copenhagen and quickly expanded globally, operating in 17 countries with 66 million users.
As a 2 sided platform, their main value proposition is two fold:
For consumers: buy perfectly good surplus food at a discounted rate
For businesses: create a new revenue stream from surplus stock you’d otherwise throw away
It’s a win-win, and TGTG has had an amazing journey to get to the success they’ve had today.
But first, let’s take a look at the problem they’re trying to solve
The big picture: food waste
Around 30-40% of food is wasted globally.
But not all food waste is created equal…
First, we need to understand the understand the difference between food “loss” and food “waste”
Food loss occurs during the harvesting and processing stages
(e.g. from pests, storage, etc.)Food waste occurs once food reaches stores and households
(e.g. surplus at stores, past “best by” dates, spoilage, etc.)
So which is a bigger issue?
Well, it depends (because of course).
In developing countries food loss tends to be a bigger issue
(due to infrastructure challenges)In developed countries food waste tends to be a bigger issue
(due to consumer behavior and market standards)
In terms of the impact on climate change, we tend to focus on food waste for a few reasons.
Accumulated resources - the further food makes it through the supply chain the more resources are used (energy for processing, packaging materials, transportation fuel, etc.). When food is wasted all of those resources are wasted as well.
Landfill contribution - food loss often finds it’s way to animal feed or compost centers, whereas a large amount of retail/household food waste ends up in landfills, where it decomposes, and produces methane (with harsher effects than carbon dioxide).
Regardless, food loss and waste together make up ~10% of greenhouse gas emissions, making them a major strain on climate change (on par with the entire transportation sector).
Main takeaways
Put simply, the main problems TGTG is tackling revolve around:
Food waste - 30-40% of all food is wasted globally
Greenhouse gases - this waste makes up ~ 10% of all greenhouse gas emissions
Economic loss - in the US alone, food waste costs $218 billion per year (1.3% of GDP)
Food insecurity - food wasted in the US alone could feed 150 million people per year
Enter, Too Good To Go...
The solution
Too Good To Go started back in 2015 as a simple platform to buy surplus food from retailers, addressing the food waste problem, but has expanded to tackle more food loss up the supply chain.
Their current products include:
Surprise bags - for consumers to purchase surplus food
Too Good To Go platform - for retailers to manage their surplus food and reduce waste
Too Good To Go parcels - for manufacturers to easily sell their surplus food in bulk
Look-Smell-Taste date labelling - for brands to show their support and empower households to waste less
Business model
TGTG’s business model is a commission based two-sided marketplace.
When a business sells their surplus food to consumers, a percentage of that sale goes to TGTG.
Simple right? It’s no different than any other two-sided marketplace, but when a business sells something it was going to make $0 on, a commission doesn’t sting as much.
Impact
With this simple business model, Too Good To Go has had some major impact towards the problems it’s tackling:
Food waste - TGTG has saved over 200 million meals from being wasted
Greenhouse gases - 52 million kilograms of CO2 emissions have been avoided
Economic loss - food savings mean lowering the economic burden for both households and retailers
Food insecurity - lower prices on the TGTG platform mean that lower income households now have more purchasing power
This truly is a case of a simple business model, implemented effectively, producing an elegant and powerful impact business.
The strategies
Too Good To Go has used many strategies to get to where they are today, but here are a few of my favorites.
Surprise Bags
Giving stores and restaurants a platform to sell excess food is great, but updating individual items everyday sounds like a lot of work.And when you add work to peoples’ life they tend to back away…So TGTG built their platform on “surprise bags”.
Instead of listing individual items, you are able to purchase a collection of surplus food that’s packaged up and sold at a discount.
This does a few things:
It reduces the burden on the retailer, since they can bundle their items together and just list a “surprise bag”.
It gives the consumer more bang for their buck, giving them more value and incentivizing them to buy and go pick up their bag (I’m not going to buy a single bagel, but a whole bag of bread and pastries for the week? Yes please).
It’s just fun. Who doesn’t like a surprise? Especially when you know it’ll be full of things you’ll enjoy.These elements of surprise not only get customers to buy, but it gets them to engage over and over, because they’ll always have a new experience.
Strategic partnerships
It’s easy to say “just find partners” when it comes to growing at any stage (for any business, really).But Too Good To Go strategically used partnerships as a scalable, low-cost way to solve challenges most early scale startups face.
Growing a two-sided marketplace
There’s this “chicken and egg” to marketplaces, you need users to attract sellers, and sellers to attract users.When you are able to secure a few key partnerships you can quickly fill up one side of the marketplace (usually the seller side) that’s often slower and more expensive to build.
Borrowing trust and credibility
When you are a food based platform, especially one who’s main offering is surplus food, you need to earn your users trust from day one.Partnering with larger names enabled TGTG to piggy back off that brand’s existing trust, which would be beneficial for any business that touches sensitive categories (health, safety, food, etc.).
Borrowing other business’s audiences
There’s one thing that founders typically overlook that will kill their business.Distribution.Establishing early partnerships with businesses that have already done the hard work of gathering your ideal customers is a great way to short cut that distribution challenge and reduce your reliance on ad spend or cold outreach.
Educational campaigns
Most companies focus on customers who already understand their problem (and feel the pain).This makes education-based marketing difficult because first you need to convince people there’s an issue to solve.
This usually means longer times to convert customers, and a more difficult task of measuring the ROI of education.
TGTG isn’t just looking at conversions though, they also measure success on actual impact they are creating in communities, here are two of my favorite ways they’re doing that.
Look, Smell, Taste campaign
The Look, Smell, Taste campaign added labels to popular brand packaging at the supermarket, encouraging consumers to use their senses to assess food quality rather than relying solely on date labels.Brands who joined in also got the benefit of backing a purpose driven campaign.
Next Gen program
The Next Gen program creates activities that help children understand the environmental impact of food waste and inspire action.
It's a simple campaign, but simple is good for families who want to entertain the kids for awhile.
These campaigns do a few things:
They make people feel smarter with quick, digestible information
They build generational brand loyalty by being a part of family’s lives
They harnesses a community that cares about TGTG’s mission and their place in it
The end result?
They hit on their impact measure of success, and actually do so in a way that’s likely to lead to long term benefits to the business.There are a ton more strategies and tactics used by Too Good To Go, I just wanted to get into a few in more detail than you normally find so you can use them in your projects.
The basics
Too Good To Go is a food waste platform that started in Copenhagen and quickly expanded globally, operating in 17 countries with 66 million users.
As a 2 sided platform, their main value proposition is two fold:
For consumers: buy perfectly good surplus food at a discounted rate
For businesses: create a new revenue stream from surplus stock you’d otherwise throw away
It’s a win-win, and TGTG has had an amazing journey to get to the success they’ve had today.
But first, let’s take a look at the problem they’re trying to solve
The big picture: food waste
Around 30-40% of food is wasted globally.
But not all food waste is created equal…
First, we need to understand the understand the difference between food “loss” and food “waste”
Food loss occurs during the harvesting and processing stages
(e.g. from pests, storage, etc.)Food waste occurs once food reaches stores and households
(e.g. surplus at stores, past “best by” dates, spoilage, etc.)
So which is a bigger issue?
Well, it depends (because of course).
In developing countries food loss tends to be a bigger issue
(due to infrastructure challenges)In developed countries food waste tends to be a bigger issue
(due to consumer behavior and market standards)
In terms of the impact on climate change, we tend to focus on food waste for a few reasons.
Accumulated resources - the further food makes it through the supply chain the more resources are used (energy for processing, packaging materials, transportation fuel, etc.). When food is wasted all of those resources are wasted as well.
Landfill contribution - food loss often finds it’s way to animal feed or compost centers, whereas a large amount of retail/household food waste ends up in landfills, where it decomposes, and produces methane (with harsher effects than carbon dioxide).
Regardless, food loss and waste together make up ~10% of greenhouse gas emissions, making them a major strain on climate change (on par with the entire transportation sector).
Main takeaways
Put simply, the main problems TGTG is tackling revolve around:
Food waste - 30-40% of all food is wasted globally
Greenhouse gases - this waste makes up ~ 10% of all greenhouse gas emissions
Economic loss - in the US alone, food waste costs $218 billion per year (1.3% of GDP)
Food insecurity - food wasted in the US alone could feed 150 million people per year
Enter, Too Good To Go...
The solution
Too Good To Go started back in 2015 as a simple platform to buy surplus food from retailers, addressing the food waste problem, but has expanded to tackle more food loss up the supply chain.
Their current products include:
Surprise bags - for consumers to purchase surplus food
Too Good To Go platform - for retailers to manage their surplus food and reduce waste
Too Good To Go parcels - for manufacturers to easily sell their surplus food in bulk
Look-Smell-Taste date labelling - for brands to show their support and empower households to waste less
Business model
TGTG’s business model is a commission based two-sided marketplace.
When a business sells their surplus food to consumers, a percentage of that sale goes to TGTG.
Simple right? It’s no different than any other two-sided marketplace, but when a business sells something it was going to make $0 on, a commission doesn’t sting as much.
Impact
With this simple business model, Too Good To Go has had some major impact towards the problems it’s tackling:
Food waste - TGTG has saved over 200 million meals from being wasted
Greenhouse gases - 52 million kilograms of CO2 emissions have been avoided
Economic loss - food savings mean lowering the economic burden for both households and retailers
Food insecurity - lower prices on the TGTG platform mean that lower income households now have more purchasing power
This truly is a case of a simple business model, implemented effectively, producing an elegant and powerful impact business.
The strategies
Too Good To Go has used many strategies to get to where they are today, but here are a few of my favorites.
Surprise Bags
Giving stores and restaurants a platform to sell excess food is great, but updating individual items everyday sounds like a lot of work.And when you add work to peoples’ life they tend to back away…So TGTG built their platform on “surprise bags”.
Instead of listing individual items, you are able to purchase a collection of surplus food that’s packaged up and sold at a discount.
This does a few things:
It reduces the burden on the retailer, since they can bundle their items together and just list a “surprise bag”.
It gives the consumer more bang for their buck, giving them more value and incentivizing them to buy and go pick up their bag (I’m not going to buy a single bagel, but a whole bag of bread and pastries for the week? Yes please).
It’s just fun. Who doesn’t like a surprise? Especially when you know it’ll be full of things you’ll enjoy.These elements of surprise not only get customers to buy, but it gets them to engage over and over, because they’ll always have a new experience.
Strategic partnerships
It’s easy to say “just find partners” when it comes to growing at any stage (for any business, really).But Too Good To Go strategically used partnerships as a scalable, low-cost way to solve challenges most early scale startups face.
Growing a two-sided marketplace
There’s this “chicken and egg” to marketplaces, you need users to attract sellers, and sellers to attract users.When you are able to secure a few key partnerships you can quickly fill up one side of the marketplace (usually the seller side) that’s often slower and more expensive to build.
Borrowing trust and credibility
When you are a food based platform, especially one who’s main offering is surplus food, you need to earn your users trust from day one.Partnering with larger names enabled TGTG to piggy back off that brand’s existing trust, which would be beneficial for any business that touches sensitive categories (health, safety, food, etc.).
Borrowing other business’s audiences
There’s one thing that founders typically overlook that will kill their business.Distribution.Establishing early partnerships with businesses that have already done the hard work of gathering your ideal customers is a great way to short cut that distribution challenge and reduce your reliance on ad spend or cold outreach.
Educational campaigns
Most companies focus on customers who already understand their problem (and feel the pain).This makes education-based marketing difficult because first you need to convince people there’s an issue to solve.
This usually means longer times to convert customers, and a more difficult task of measuring the ROI of education.
TGTG isn’t just looking at conversions though, they also measure success on actual impact they are creating in communities, here are two of my favorite ways they’re doing that.
Look, Smell, Taste campaign
The Look, Smell, Taste campaign added labels to popular brand packaging at the supermarket, encouraging consumers to use their senses to assess food quality rather than relying solely on date labels.Brands who joined in also got the benefit of backing a purpose driven campaign.
Next Gen program
The Next Gen program creates activities that help children understand the environmental impact of food waste and inspire action.
It's a simple campaign, but simple is good for families who want to entertain the kids for awhile.
These campaigns do a few things:
They make people feel smarter with quick, digestible information
They build generational brand loyalty by being a part of family’s lives
They harnesses a community that cares about TGTG’s mission and their place in it
The end result?
They hit on their impact measure of success, and actually do so in a way that’s likely to lead to long term benefits to the business.There are a ton more strategies and tactics used by Too Good To Go, I just wanted to get into a few in more detail than you normally find so you can use them in your projects.
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200+
thinkers, builders, and investors
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200+
thinkers, builders, and investors
