Too Good To Go – the social enterprise tackling global food waste
Too good to go: the world’s leading platform for fighting food waste
Too Good To Go (TGTG) is a social enterprise established with the purpose of ending food waste, by connecting customers to restaurants, bakeries and stores that have surplus food.
How did the idea come to being and why does it matter?
TGTG was founded in 2015 in Denmark after one of the founders saw how perfectly good food was being thrown away and wasted in a buffet. Each year, around 2.5 billion tons of food are being wasted (amounting to approximately one third of the food produced), contributing to around 10% of the global greenhouse emissions. And so, in a quest to fight food waste, a group of tech-savvy European entrepreneurs created Too Good To Go, a social enterprise enabled through a mobile app.
How does it work?
The solution connects food producers (bakeries, restaurants) or food distributors (grocery stores) with consumers in different major cities across Europe and the US. The food producers and food distributors who want to use TGTG to eliminate their food wastage must create an account on the app and pay an annual subscription fee. Once these steps are completed, they can start advertising their offers for food, in a specific TGTG gamified way: food is distributed and packaged in “surprise bags” that typically cost ~$4-$6. The “surprise bags” are marketed on the TGTG app and can be picked up by customers in a certain time window, usually towards the end of the business daily working schedule.
For customers, using the app is as easy as 1-2-3: download the app, create an account and start searching for “surprise bags” in desired locations or from specific providers. The app allows customers to locate offers in the app, either by showing a list of all providers with offers or by searching for offers in a specific location through the TGTG map. While customers can select a “surprise bag” from their favorite provider, they do not have the ability to select the content of a “surprise bag”; in this way, TGTG creates a “trick-or treat” paid for experience for adults, who get to indulge not only in the contents of their purchase, but also in the satisfaction of doing something good for the environment.
Why use it? And…what’s in it for me?
The TGTG solution presents itself as a win-win-win proposal for all parties involved, including the planet.
Restaurants and groceries find through TGTG a way of reducing food waste. Thus they can present themselves as fighters against climate change by reducing their greenhouse emissions. More than this, they are introduced to a large network of consumers who are willing to pay for daily leftovers the merchants have to offer. In simpler terms, TGTG becomes the marketplace stores use to sell their surplus food for a cheaper price.
Restaurants can also use TGTG as a marketing tool, to introduce existing customers to new products. However, any attempt to misuse the app can trigger negative feedback from consumers, who in exchange can flag such partners on the app. In such cases, TGTG does not exclude the possibility of ending the partnership with such partner, as ensuring an excellent customer experience which leads to repeat purchases is essential for scale and needed volumes to tackle the issue of food waste.
Consumers get to enjoy surprise meals from their favorite stores at reduced prices. While the price per “surprise bag” varies between $4 and $6, the non-discounted value of the produces they receive is deemed to be x3. Moreover, the app is offering each user the option of tracking the number of saved “surprised bags”, amount of money saved, and CO2 saved as well. The best way of driving behavior change is by increasing the level of awareness on the impact of our choices. Consumers also enjoy a sense of belonging, as the social enterprise is taking pride in creating a community of over 66 million waste worriers.
The environment sits at the core of TGTG’s mission “to inspire and empower everyone to take action against food waste”. With over 170 million meals saved and over 170k partners on the TGTG network, the enterprise is aiming to reduce greenhouse emissions from food waste. At Too Good To Go, 1 Surprise Bag sold is counted as 1 meal saved, equalling on average to 2.2 lbs of food and hence 5.5 lbs CO2 saved.
Sure, it worked in Denmark… but is it scalable?
TGTG is currently present in 15 countries in Europe and in the US and the benefit of being primarily an app company offers the flexibility of scale, convenience, and ability to innovate. An important element is played by the lack of customization the solution requires for expanding in different markets: the solution can be plug and play in any country that showcases significant size and low barriers to entry. The profitability formula thrives on scale, as TGTG increases the revenues with additional partners and higher volumes of meals saved. Considering the urgency and scale of the social problem TGTG is addressing, the aim of the management team is to expand and scale as fast as possible.
Sounds too good to be true?
..it is not! I have used Too good to go and I have never been disappointed; on the contrary, I have had pleasant surprises as repeat purchases have led to building a relationship with the restaurant and additional goodies in the surprise bag. When are becoming a waste worrier?
Thank you for the blog post, Irina.
Too Good to Go sounds like a terrific initiative. I’d love to learn more about Too Good to Go’s profit model, as I believe generating additional revenue from the restaurant partners (and/or advertisers) is critical to scale (paying additional employees, building out complementary services, marketing to additional partner candidates like schools or farmers etc.). My top concern with Too Good to Go is its scalability. First, it seems this business is reliant upon a local cluster of grocer / restaurant partner participants to ensure appropriate supply to consumers. I’m sure there are inherent complications here – as lower income consumers (a potential target demographic) looking for a cheaper meal may live in a neighborhood with fewer grocers / restaurants available to participate. Second, I anticipate regulatory complexities that may impact food distribution laws and policies country-by-country, which may result in a customized launch approach that complicates scalability.
My secondary concern is in the quality of the meals Too Good to Go offers consumers. In my experience volunteering at a food bank, it was clear that most “partner” food establishments would only donate surplus (often stale) bread due to its low cost and very short shelf life (<1 week). How does Too Good to Go monitor restaurant partners and uphold the highest standards for food quality (no spoilage, mold, etc.) to maintain consumer trust in the platform?
I cannot tell you how excited I am for receiving the first comment on my post!
You are making some very fair points, Elizabeth. I will try to address them all properly. Their revenues are coming from an annual fee + share of revenues from each surprise bag sold (the figures published suggest they charge $1.79 / transaction, representing 30-45% of the value of each surprise bag sold). So their unit economics would be fairly healthy once they reach a critical volume that covers app development, customer support and overall SG&A costs. For their partners is actually a good opportunity as well, as they would not have to throw away that food, but get to make some modest revenues out of it too. Nor TGTG nor the partners incur any delivery expenses as customers need to go in their locations and pick up their surprise bags. Also, TGTG does not target necessarily customers with lower income level (I actually believe it to be a bit tricky to make an eating plan out of TGTG, precisely because you do not know what you will get. But it is a fun way to shop from your favorite places when you don’t have any preference as to what you will be getting. And you get rewarded by paying a fraction of what the contents of the box are. Regulations are indeed a fair point of concern and I know they do take them into consideration when expanding to other countries (but I do not have the detail of what specifically they are considering from this spectrum).
Re quality of meals: they do end partnerships if customers are raising concerns over both the quality of the food and the value of the bag (the 1:3 ratio is something TGTG team cares very much). From some of the articles I have read it seemed they have a zero tolerance for quality and value. I always used them with places I liked and places I used within normal times as well, so I always had a stellar experience with them.
Thank you for the additional color, Irina! So glad to hear you’ve had stellar experiences with them! I’ll keep an eye out.
Thank you for your posting, Irina! I downloaded the application right after reading your blog post and enjoyed exploring possible ‘surprise bags’ pick-ups around the area where I am living in. I was quite impressed by how TGTG found an intervention point in relation to food waste, and also glad now they are in the US (as 30-40% of the food in America is never eaten and 10% of estimated gas emissions are due to food waste). I wonder if TGTG will eventually make options for dietary choices. Also as a user now, I wonder how each restaurant decides the quality or amount of food and price range between $3.99 ~ $10. Some restaurants had less than a 30min frame for a pick-up time, which can be very difficult I found.
I agree, a time frame of 30 mins is too short; from how I see their business, I think TGTG is more of an enabler so from this perspective, I think restaurants have the freedom of mixing or matching dietary options in their bags. I know the food they select is basically left overs from the day (when they decide not to sell products from one day to the next) and the quantity is based on not discounted pricing, number of bags the restaurant wants to make available and overall quantity of food available for TGTG.
So excited you decided to download the app! Let me know how your experience goes 🙂
Hi Irina,
Thank you so much for this blogpost! I know TGTG from living in Switzerland – where food prices in comparison to Germany are a lot higher. An interesting development I found is that TGTG in Switzerland seems to be well known by international students, and other young people not used to the swiss cost-level for food, especially meat products. I am wondering if this phenomenon is the same for other countries, or if it only works this way for Switzerland and this is a one-way effect (cheaper country to more expensive country —> people look for alternative options to buy food). It would be very interesting to see in which regions and countries TGTG attracts the most consumers, because if it really is a one-way effect I would also be worried about scalability.
The other thing that came up for me is the quality of the TGTG products. From experience, users develop a word-of-mouth network of which restaurants give out the biggest portions (price value) or the best quality food (important for Sushi TGTG) in their area. I am wondering how TGTG could tackle these community questions: Would they want to help users communicate on the platform and help certain restaurants become „Star TGTG sellers“ or would this create higher barriers to entry for new entrants. I think this comes down to the question of network effects and which side to focus on: building a great community and focusing on users to spark the business growth, or focusing on restaurants.
thank you for your comment Kate. Seeing your comment I tried to gather some data on the type of customers that use TGTG app but I could not see any split on demographics and/ or income brackets. I would suspect that the trends you noticed are true across different areas.
Hi Irina,
great post! I had to comment as too good to go is one of my favourite Apps ever!
You mentioned some great points in your post! Something i noticed throughout the years is that Too good to go is working with more and more big companies, e.g. leading Supermarkets like REWE in Germany or MIGROS in Switzerland, furthermore they adpoted to different dietary requirement and differentiate between veggi, vegan, or pure vegetable/ fruit bags for supermarkets. I think small improvements like that really keep the App growing ang growing.
Sometimes i wish there would be more restaurants participating in the app in certain regions, especially when i see the amount of foodwaste after an event or smth. Maybe TGTG could introduce an incentive sheme where users themselves could promote the app to restaurants they know/ visit? Just a thought i had several times 🙂
Best, Laura
love your reply, Laura! thank you for this – I did not know but you are raising some very interesting points.
This is such a great post, Irina! One concern that I saw against TGTG while studying food waste management was the effect that monetizing food that would otherwise not be sold has on charity – i.e. if you can sell the remaining 12 bagels for $2 instead of $6, do you take away from charities that would otherwise receive the still good but unsold food? I haven’t seen any data online to justify claims either way, but am always concerned about the impact of these apps on food banks / other forms of donation that rely on receiving free food!
Hi Irina, this is a fascinating post and TGTG sounds like an amazing organization. I’m response to Saad’s point above I wonder the extent to which this does take away from charity. I feel like the specific restaurants and stores that are looking to sell this excess produce are more likely to donate than other organizations that are simply throwing their produce away. However, I would imagine that as the overall scale of the TGTG intuitive grows, more and more companies are made aware of the option and are likely to consider it as an alternative revenue source.
So interesting! I have come across TGTG before but have not used it since the bags are “mystery” and I have dietary restrictions. One question that comes to mind though is the restaurant’s ability to disintermediate this platform – for instance, where I used to work the local food hall would heavily discount there left over food after the lunch rush was over, and since it was a high traffic area, there sometimes was a second post-lunch lunch rush to get discounted meals. I wonder how TGTG could mitigate this risk
Thank you, Irina, for this amazing post! I really admire TGTG’s business model and superior user experience around the gamification bit that makes it so much more engaging. On Kate’s point of one of TGTG’s significant user bases coming from the student community, the gamification part has in fact added to accelerated adoption of the app. I have seen many friends here even in Cambridge use it and get positively surprised and then refer it to many of their friends. Sometimes though, restaurants have ended up giving out food that is not a mix that’s very easy to store and preserve – for example, one of my friends once got 6 big loaves of bread that were fresh but very difficult to store and preserve. Possibly, a user rating of restaurants’ giving patterns may help solve such issues. Thanks once again for the wonderful post!