Too Good To Go, a Copenhagen-based app, is tackling the $1 trillion global food waste problem by connecting consumers with retailers selling surplus food at steep discounts. While aiming to be profitable, the company prioritizes its environmental mission, reinvesting much of its revenue into expansion and development. This article delves into the company’s journey, its impact, and the challenges it faces as it strives to make a significant dent in this colossal issue.
Too Good To Go: A Deep Dive into Fighting Global Food Waste
Key Takeaways:
- Too Good To Go, an app connecting consumers with retailers selling surplus food, generated nearly $162 million in revenue in 2023.
- The company’s core mission is to reduce global food waste, a problem costing the world $1 trillion annually.
- While aiming for profitability, Too Good To Go prioritizes reinvestment in expansion and the fight against food waste.
- Concerns exist about potential “greenwashing,” but the app’s actions have the potential to significantly reduce waste, similar to taking nearly 900,000 cars off the road.
- The app’s long-term success depends on continued innovation, navigating regulatory hurdles, and maintaining retailer participation.
From Dumpster Diving to a Multi-Million Dollar App
David Niles, a Brooklyn resident, exemplifies the app’s impact. For years, he personally combated food waste by dumpster diving. Now, he utilizes Too Good To Go, spending nearly $10,000 on almost 2,000 “surprise bags” over four years. These bags, containing leftover food from restaurants and bakeries, are purchased at significantly discounted prices—typically between $3.99 and $9.99—highlighting the app’s appeal to both environmentally conscious consumers and budget-minded individuals.
Too Good To Go’s Business Model:
Too Good To Go’s success stems from its simple yet effective model. Retailers list their surplus food on the app for sale at drastically reduced prices. The company takes a cut of each sale, typically $1.79 per bag and also earns annual membership fees of $89 from the retailers. While this revenue stream is substantial, the company’s financial journey highlights a crucial tension between profitability and mission. Their revenue in 2023, while impressive, did not translate to profit due to prioritization of expansion and development.
From Near Failure to Global Growth
Too Good To Go’s journey wasn’t always paved with success. Initially launched by five Danish entrepreneurs, the company faced significant financial challenges in its early years. CEO Mette Lykke, who joined as an angel investor, remembers a moment of serious doubt, even contemplating resigning after evaluating the company’s dire financial situation. Her husband’s encouragement, “It’s already been in the newspaper, and you’re probably just going to have to make it work. So suck it up and get to work,” pushed her to take decisive action.
Lykke’s Strategic Reorganization:
Lykke’s first significant move was a strategic retreat. She shut down operations in four of the ten countries where the app was active, recognizing the need to consolidate and refine the business model before further expansion. Following this, Lykke has successfully guided Too Good To Go to significant growth, currently boasting 100 million users across 19 countries and expanding into new services such as a grocery service and software for retailers. The U.S. market, entered in 2020, now includes retailers in 33 metro areas.
The Broader Impact of Combating Food Waste
Too Good To Go isn’t alone in its pursuit of combating food waste. The industry has attracted significant interest from venture capitalists, with over $1 billion invested in various initiatives. The appeal is multifaceted. The app caters to consumers seeking budget-friendly options and environmentally sustainable practices, creating a win-win scenario. For retailers, participating in the Too Good To Go program is better than throwing away unsold produce, mitigating financial losses.
Beyond Financial Benefits:
The success stories go beyond individual finances. For businesses like Delish Bakery in Medford, Oregon, Too Good To Go’s unexpected customer base created a new market, transforming some discounted bag buyers into full-priced regulars. The ripple effects are far-reaching. If this model were to catch on globally, ReFED, a Chicago-based nonprofit, estimates that the U.S. alone could save one million tons of food annually – the environmental equivalent of removing 900,000 cars from the roads.
Challenges and the Road Ahead
Despite the notable success, challenges linger. Some critics raise concerns over potential “greenwashing,” suggesting the app may give a false sense of environmental responsibility. The long-term viability also depends several factors like the potential for retailers to replicate the system independently, overcoming different food safety regulations across various jurisdictions, and the eventual saturation of the market. Ultimately, Alex Frederick, a PitchBook food tech analyst, notes that Too Good To Go’s future hangs on maintaining a strong business model and executing on its expansion strategy.
Mette Lykke’s Vision:
Ultimately, Too Good To Go’s CEO, Mette Lykke, expresses unwavering confidence in the company’s model. She highlights the importance of execution, stating: “Having a great idea or concept is fantastic, but it’s really only 10% of getting there. The rest is all about the execution.” This sentiment underscores the critical role of continuing innovation, adaptation, and consistent execution in achieving the company’s ambitious goals of reducing food waste on a global scale.
