Interview: Sarah Soteroff of Too Good To Go

An emerging scalable and profitable solution to food waste!

Too Good To Go

Sarah Soteroff is a spokesperson for Too Good To Go, a rapidly growing app service that connects hungry consumers to restaurants and stores with unsold food that would otherwise go to waste.

A lightly edited transcript of this exclusive interview follows. This writer’s questions and remarks are in bold, Ms. Soteroff’s responses are in regular type. Bold italics are clarifications and extra information added after the interview.

All images below are from the Too Good To Go website.

You can download Too Good To Go on the Google Play or Apple app stores.

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Can you tell me about Too Good To Go, and how it could become a scalable and profitable solution to food waste?

Too Good To Go was founded in 2016 in Copenhagen, Denmark. And the goal was, as you identified, to reduce food waste, and the profitability and scalability all came later. Our founders were really concerned with the amount of surplus waste that happens at every level. From restaurants to grocery stores, produce stands, and at home, we are wasting about 40% of all the food that we produce, which is edible food waste.

As we expanded throughout Europe (we are now in 15 countries in Europe, we are in Canada and in the US), we learned there are three-pronged benefits to reducing food waste.

First is obviously environmental. Reducing food waste has a huge positive environmental impact. Food waste accounts for 10% of all greenhouse gas emissions. And for comparison, flight travel only accounts for 1%. When we're thinking about those things that we do on a day-to-day basis, food waste is much more easy to manage and much more easy for us to control than say flight travel or using petrol.

Secondarily for businesses, especially in food selling businesses where margins are super tight, having a way to recoup some of that lost revenue that they would lose due to throwing out that food was a huge motivating factor for them. Across the world, we're seeing businesses looking for ways in which to reduce their costs without having to levy those additional costs onto consumers. Reducing food waste is a number one thing that they can be doing.

And then the third prong benefit is for consumers. Consumers’ help to reduce their food waste and their footprint is a fantastic thing. But without the monetary side of also being able to save money on food, there's not going to be a huge adoption for that. We know that having our food sold at a steep discount on the app, while still being perfectly edible and still being from those places that they would purchase from normally, allows consumers to be motivated to use it, motivated to pick it up, and then motivated to make it more of a habit so it actually has that reverberation of more longer term impact.

I have used the app, but for someone who's never heard of this before, what does it actually look like? What's the use case? So you go to the app store, download the Too Good To Go app, and then what do you do?

You can go to the App Store, Google Play Store, type in Too Good To Go, we will come up and you download it. All that it's going to ask you for is your location. And the reason it asks you for your location is because we are a pickup service. We don't do delivery. So what you want to see is what's most readily available in your neighborhood, in your city, in your state. And if you put in a location, I usually do around like 20 mile radius and then you can see what's available at different points throughout the day.

Each store has a pickup window and that means that some stores may have 12 hours of a pickup window, some may only have 30 minutes.

You'll see a bunch of little green dots on a map, you click on that dot, you'll see the name of the store, you'll see the category of the bag that they have, and you'll see the value amount.

You'll see the original value amount, which could be $30, $40, $50. And you'll see the amount you pay, which is typically 50% to one third off that original value. So you're getting a steep discount, but you will not know the exact makeup of what you get in your bag. We have a surprise bag. And the reason we have that is because food waste is super unpredictable. So if I own Sarah's Bakery, for example, I may make bagels and donuts and muffins and scones. So I'll say I have $50 worth of food that is surplus. I can make two bags out of that. And then the makeup of those bags may be two scones, three donuts, two cookies, but it all falls under that baked goods category.

Similarly, if you're a grocery store, for example, you might have multiple categories. So you could have prepared food items, those are those things typically in the fridge, maybe like salads that have already been made or, you know, lunch items, sandwiches, things like that.

And then you may also have produce bag, which is just your typical produce, could be anything from lettuce, avocados, fruits, vegetables, anything that falls within that category.

And then you may also have a baked goods category or a specialty category.

So at a certain store, you may have different categories, also different value amounts, and then you'll see the pickup windows, which is when you physically go into the store to pick it up.

When you go in store, once you reserve on the app, you'll get a little code.

When you go in the store, you will see a swipe to pick up button.

You show that to the store.

They have the same code on their end, so they'll see if they have 10 bags for sale that day.

They'll line up your code with theirs.

And then you pick up your bag.

And the most fun part of it is because you don't know what's in the bag, the exact breakdown, you can then open the bag once you pick it up and you can see everything that you got.

And I always find that to be kind of the most rewarding piece of it because you never know what you're going to get. You'll know the category, but you're not going to know the actual breakdown. And so it's really fun to see once you have picked up your bag what you got.

I always freeze my baked goods one. I think that's the best thing to do with some of those things that you're either getting too much of or something you can't consume that day.

Yeah, you can sort of amortize it over multiple days and create a balanced diet.

So, is Too Good To Go currently profitable?

Yeah, so we are a for-profit business. We're a registered B Corp. And that means we hold ourselves and are held to externally the highest standards for sustainability, but we still do profit.

And the reason that we are a for-profit business and not a charity is because we believe that businesses can be profitable while also doing good.

At the core of the work that we do is reducing food waste and helping other food businesses to become more sustainable. But our goal is also to ensure that we can be self-sustaining as well. We are currently in a scale up mode. We have 17 markets across the globe, and we are profitable in about five of those. Our goal is to be profitable in every market in which we operate, but that takes time. We have to match that growth with our consumer demand as well.

In the US, we are live in 22 cities. It's about 15 states so far. So we are slowly, methodically expanding our next expansion markets, will be in Arizona and in Denver. As we start to expand further throughout the country, we will become more and more profitable.

The way that we make money is because we take a flat fee off of every transaction. So if you sell a bag for $5.99, we take $1.79. If you sell a bag for $3.99, we take $1.79. So that does not change. And the reason that we do that is because we have to operate, but we also want to ensure that the business is still making money

We have 219,000 all-time unique paying users and we have saved 9 million meals so far across the 22 cities in which we operate, which is a super proud moment for us. Globally we've saved more than 300 million meals. and we have over 183,000 partners, and we will continue to embed and to expand in every market that we operate.

So just because we launched in a market, I'll take Florida for example, we did a Tampa and Orlando launch at the end of November, just because we launched there does not mean that we are then finished there. So we might launch with 50 businesses, And then we'll continuously add businesses. If you are a food selling business, you can join the app at any time in a market that we operate.

If you're in a market like South Dakota, for example, we're not live yet. We just say hang tight, we will be. But if you are in a market like New York, California, Texas, Oregon, really anywhere along the coast so far, and you are a food selling business, you can go to TooGoodToGo.com, insert your information, and someone will onboard you immediately. We don't need to physically be there to do it. So it's a very scalable solution. It just takes time for us to get the word out and get people to know what we are doing so that they can see the benefit of it as well.

That is excellent. And you mentioned South Dakota. One of the next questions was, this works great in cities. And I've tried it in cities. I'm from the Portland, Maine area. And I've also tried the app in a European city, actually, which was awesome. But do you anticipate any issues with scaling to rural areas or more suburban areas, less walkable areas, where it's a bit more of a deal to like go to the nearest bakery and that means getting in the car and going on a trip and you can't just pop over after work so easily? What's your strategy for scaling beyond cities?

Yeah, it's a great question. And you're exactly correct. Our model, we're a European based company, our model expanding across Europe made sense and was pretty similar in every market that we launched in across Europe, given that there's, you know, smaller countries, higher density in urban areas, less of a rural divide, and also more people who are attuned to saving food and attuned more to the sustainability solution. When we came to North America, that definitely was one of our biggest challenges. So we did launch in big urban centers to start with. New York, LA, Toronto, Montreal, those cities where we were going to have a little bit more of that density that was going to replicate the model that we had in Europe. But we are now live in every province across Canada. And if you think of Canada, it’s a very big spread out place with not a ton of people.

And so that model is very different from Copenhagen.

Exactly. Yeah. What that meant is really just knowing the market. So each marketplace is run by locals. So we basically have local operations in every market. And so we are not copy and pasting what we did in Europe, though that model does help us to lay the groundwork. What we are doing is saying, OK, what businesses are super important for us to have an embed with? So if you take, for example, a Whole Foods market, which we work with across the US, that helps us to enter into a market where we maybe don't have as many active users yet. It helps to spread that message. And then it helps us to join with a lot of those independent businesses, which can help with some of that marketability across those markets.

We launched in Texas in March of last year. And Texas is an interesting model. We did a launch in not just one city. We had been live in Austin for about two years at that point. Then we launched in Houston, San Antonio, and Dallas, and then the surrounding areas. And what we learned from that was there are pockets, areas where there maybe are like 10 stores in one. That really helps us. So we'll sign on those 10 stores. But then we also then suggest longer pickup windows for some of those markets that maybe have more rural areas.

So we have a farm, for example, on the app in Tyler, Texas. It's the only partner on the app for about 100 miles. But they really wanted to be active because they are there. They're farmers. They're super conscious about the amount of surplus waste that they have. So they have one bag a week. That's okay with them. It's really about replicating that surplus. They're not producing additional food.

They really are helping to get rid of the surplus that they have in those markets where we see more of a rural divide. There's only a few partners, that's okay as well. Not every partner needs to be saving 15 bags a day.

They really need to be saving the surplus that they have that helps them to reduce their overhead, that helps them to reduce their footprint, and that allows consumers to pick up those bags and get a good deal when they have it.

This reminds me of Airbnb, of Uber, of these other things that have gone from like an app, a couple people in a room, to suddenly just a major part of the fabric of modern civilization. And it just happens in kind of the blink of an eye. Like, you know, it seems a bit odd now to just go to places at clothing time and buy bags of discount food. But it really seemed odd to get in a stranger's car or sleep in a stranger's house not long ago. This really seems amazing.