Too Good To Go: Revolutionising Food Waste Management

A Game-Changing Solution to Food Waste

Imagine purchasing a surprise bag of food for as little as $3.99 to $9.99, filled with items such as fresh pastries, restaurant leftovers, or grocery staples nearing their expiration, not knowing exactly what’s inside but trusting it’s worth much more. This is the premise behind Too Good To Go, an innovative app connecting consumers with surplus food from restaurants, bakeries, and grocery stores. It’s a win-win situation—businesses save on losses, consumers enjoy discounted meals, and the planet benefits from reduced food waste.

Founded in Denmark in late 2015, Too Good To Go began as a solution for buffet restaurants discarding excess food. The concept quickly expanded to include bakeries, retailers, and supermarkets. By 2023, the company had sold over 102 million surprise bags and achieved $162 million in annual revenue. The app is now active in 33 major U.S. metro areas and across North America, Europe, and Australia, with over 100 million users and 170,000 partnering businesses.

Addressing a Global Challenge

Food waste is a staggering global issue, costing the economy an estimated $1 trillion annually and contributing to broader challenges such as greenhouse gas emissions, resource depletion, and food insecurity worldwide. In the U.S. alone, over $450 billion worth of food goes uneaten each year, contributing to over 18 million tons of waste in the restaurant, food service, and grocery store sectors. Much of this ends up in landfills, where food is the leading contributor. Too Good To Go is tackling this problem by turning potential waste into a valuable resource.

How Too Good To Go Works

The app’s surprise bags allow businesses, including restaurants, grocery stores, and cafes, to list surplus food at the end of the day. Consumers use the app to reserve these bags, often at a 70% discount, and pick them up at designated times. This “game-like” experience not only offers an affordable way to try new foods but also fosters customer loyalty. Many users, after discovering a new restaurant or bakery through the app, return to support those businesses at full price.

The Business Impact

For many businesses, joining Too Good To Go has been transformative. A New York-based Jamaican restaurant, Fyahbun Creative, reported saving hundreds of dollars daily by selling leftover food that would otherwise go to waste. Businesses decide their own pricing for surprise bags, with the expectation that the contents provide significant value.

Retailers on the app pay an annual $89 membership fee and a transaction fee of $1.79 per order. In return, they gain a new revenue stream, reduce disposal costs, and enhance their brand image as eco-conscious contributors to the fight against food waste.

Financial Growth and Future Plans

Despite early losses due to rapid expansion, Too Good To Go has steadily increased revenue and turned cash flow positive in 2023, with a positive EBITDA of $8 million. This financial milestone was achieved through strategic partnerships with major retailers, optimisation of its pricing model, and expanding its user base through targeted marketing campaigns. The company anticipates at least 10% revenue growth in 2024. While it hasn’t yet achieved consistent profitability, the app’s scale and impact position it well for continued success.

Expansion remains a priority. In addition to surprise bags, the company is exploring grocery services, software solutions for food retailers, and partnerships with major brands like Whole Foods. These initiatives aim to diversify offerings and further reduce waste across the food supply chain.

Challenges and Competition

Too Good To Go faces several challenges, including market saturation, regulatory hurdles, and competition from similar apps like Olio and Karma. Additionally, some businesses misuse the platform by offering underfilled surprise bags, which could harm customer trust. Despite these challenges, the app’s unique approach and market leadership continue to set it apart.

Environmental Impact

By saving millions of tons of food from landfills, Too Good To Go contributes to significant reductions in greenhouse gas emissions. Experts estimate these efforts are equivalent to taking 900,000 cars off the road annually. As the company scales, its potential to drive environmental change grows exponentially.

A Vision for the Future

Too Good To Go’s CEO, Mette Lykke, envisions a future where food waste is a problem of the past. “We dream of a planet with no food waste,” she says. With its innovative model, the app is well on its way to making that dream a reality, proving that profitability and purpose can go hand in hand.