UberEats for Leftovers – Tackling the logistics of recycling food

Monte Wan, the owner of a fantastic Thai restaurant in Toronto, Khao San Road, has started calling Uber to deliver soup made from vegetable scraps to local shelters (TVO). This made us wonder: as technology keeps advancing, could this be scaled up into a profitable new business model that drastically reduces food waste?

First, let’s look at some troubling data:

• Globally, “3 billion tons of food is wasted every year while almost 1 billion people go undernourished and another 1 billion hungry” (UN).
• In the US, 40% of all food produced is wasted annually along the food supply chain, a total of 63 million tons, or USD $165 million. 85% of this waste occurs during consumption, in restaurants, groceries, and homes. (ReFED).
• At the same time, there will be an estimated 10 million self-driving cars by 2020, increasing to 25% of all cars on the road by 2030 (Forbes).

Source: ReFED.com

To tackle the significant challenge of food waste, there needs to be a set of interconnected solutions spanning the entire supply chain from agriculture and production to commercial and household consumption: optimize production volume, use all that is produced (including scraps), and recycle any remaining mismatches in food supply and demand. For this blog post, we will zoom into just a specific piece of the chain: recycling and recovering leftovers that has been prepared by the commercial food services sector (restaurants, groceries, hotels, etc.) but not consumed. This is currently thrown out as garbage, with only a very small proportion composted. Recovering 15% of the food wasted at this point in the supply chain could potentially feed 25 million people in need (NRDC), just in the US alone. Imagine the potential globally.

There is a huge opportunity to effectively recycle and recover food waste with a combination of two technologies: mobile-based demand matching for leftovers and self-driving cars for seamless logistics.

 

SOCIAL AND ENVIRONMENTAL SUSTAINABILITY GOALS

For the food services sector, we propose the following goals related to food waste, in alignment with the United Nations Sustainable Development Goals.

At an industry level, by 2030:

• 50% reduction in overall food waste globally (UN)
• New legislation at the national level to require and incentivize reduction initiatives in food waste, such as in Italy (SOURCE) and France (SOURCE)
• New legislation to incentivize R&D into “sustainable patterns of consumption and production” (UN).

At the individual food services provider level (restaurant, grocer, caterer, etc.), by 2030:

• 80% of food services providers to have food waste targets and actions for minimizing food waste
• 80% of all prepared but not consumed leftover food diverted to those in need or to agricultural uses
• 50% adoption of food tracking software to optimize supply and demand for prepared food

Rapid progress toward these goals are critical to address the economic, social, health, and environmental impact of food waste and undisciplined consumption. The United Nations asks “developed countries to take the lead,” (UN) and fortunately, we now have access to technology that can make this possible.

 

PROPOSED BUSINESS MODEL INNOVATION

To effectively recycle and recover food, we must address its primary challenge: the logistics of identifying, tracking, and delivering prepared but not consumed food for secondary distribution. Per the NRDC, “many businesses cite transportation as the main barrier to donating food.” Secondary distribution for prepared food can include community organizations (e.g. soup kitchens, shelters), discount food resellers (willing to resell prepared meals at a discount), composting organizations, and more.

Our proposed business model innovation combines two technologies to address the logistics challenge in food recycling and recovery:

1. Mobile-based software for leftovers tracking and ordering to match available prepared food supply with demand from the secondary market; and
2. “UberEats for Leftovers” based on self-driving technology for seamless pick-up and delivery.

 How it works:

• TRACK food items that tend to be over produced or ingredients that are not fully used (e.g. too-large plate sizes, too-large batches of salad, too many free bread baskets, overly trimmed broccoli stalk, etc.). Lean Path is a software that currently offers a monthly subscription based app that helps identify pre-consumer waste and ultimately achieve average cost savings of 2 – 6% (New Yorker).
• MATCH available food with local recipients in real-time. Food services providers indicate which items they have ready for donation or disposal, and local agencies (e.g. shelters) respond with their interest to receive the donation.
• SEND FOR DELIVERY via self-driving vehicles for minimal labour and transportation cost and hassle-free logistics.
• ADAPT menu continuously to minimize wasteful items and better match demand, based on the data captured.
• MONITOR progress on reductions (dollar and volume) achieved in food waste.

This combination of technologies will allow food services providers to reduce waste by:

• Taking a disciplined approach to food waste management, including prevention and disposal;
• Identifying and reaching recipients for food that can be donated or composed;
• Continuously assessing sources of food waste (e.g. specific food item that’s unpopular? Seasonal demand changes? Inefficient use of certain ingredients?);
• Revising future menus and use of ingredients based on assessment to minimize waste.

As a result of better food waste management, food services providers can boost their profit potential. From a cost perspective, there is a reduction in waste storage, waste disposal, and private pickup costs. Once it becomes prevalent, we also expect self-driving technology to drastically reduce the transportation cost of food donations and food recycling. The feedback loop provided by the data captured in tracking the type and quantity of leftovers also gives food services providers a more accurate picture of their demand patterns, which further reduces ingredients cost and better matches menus to consumer taste.

More broadly beyond the individual food services provider, there are significant social and environmental benefits in adopting this approach. A structured approach to food recycling and recovery reduces and can ultimately eliminate unnecessary hunger across in-need communities. In addition, by minimizing the quantity of leftovers that are sent to landfills, there are drastic reductions in the tons of greenhouse gases produced as a result.

Source: Greenbiz.com

 

COSTS AND RISKS

As with any business model innovation, there are certainly certain risks that much be accounted for. The primary one is the bet on reductions in transportation cost as self-driving technology becomes ubiquitous. Even before that happens, however, there are still huge opportunities for restaurants to partner with companies like Uber, perhaps on a subscription based basis, to negotiate cheaper transportation for food recycling. Many Uber drivers face excess capacity on a day-to-day basis, so this can be a beneficial arrangement even before self-driving technologies further drive the cost down.

A second concern is liability for spoilage of donated food. This should be minimized by supply and demand matching as that allows available food to be immediately distributed and consumed without storage or waiting.

Finally, the success of this model can be kickstarted by government tax cuts or incentives to promote food waste goals and innovations.

 

COMPANIES LEADING THE WAY

We’d like to highlight a few companies that are proactively progressing in this journey of combatting food waste.

ReFED provides comprehensive data and analysis on the economic impact of food waste. It proposes a list of potential recommendation to eliminate food waste at every cog in the food supply chain, including for food recycling and recovery. It connects stakeholders spanning consumers to businesses to non-profits to governments in coming up with a holistic solution for addressing the food waste challenge (ReFED).

LeanPath is a software that allows food services providers to track the food that is being thrown out, along with the reasons for disposal. It provides a dashboard to review the categories and trends for food waste in a given time period. University of California-Berkely is a success story, where LeanPath helped reduce waste by 43% and achieve cost savings of US $1,600 weekly (Forbes).

Food Rescue US is an app that matches food providers with leftovers with community food banks and agencies, delivered by a network of volunteer drivers. They have delivered more than 15 million meals since 2001 (Food Rescue US).

Food Cowboys provides a mobile platform to connect food distributors with community food banks and agencies. They handle all the logistics at a fee (Huffington Post). It also provides education materials, including composting guidelines and local contacts.

 

There is an international movement toward solving food waste. Let’s use technology to help get us there.

 

 

By: Alice J.; Chen T.

 

Sources:

https://www.forbes.com/sites/oliviergarret/2017/03/03/10-million-self-driving-cars-will-hit-the-road-by-2020-heres-how-to-profit/#145c306c7e50

https://www.forbes.com/sites/daniellegould/2012/08/30/cutting-food-waste-increases-corporate-profits-consumer-savings-says-report/#118e7807ac02

https://www.greenbiz.com/article/getting-economic-opportunity-right-food-waste

https://www.nrdc.org/sites/default/files/wasted-food-IP.pdf

http://www.newyorker.com/business/currency/the-untapped-potential-of-wasted-food

https://www.greenbiz.com/article/unilever-nestle-usda-rockefeller-unite-cut-food-waste?utm_medium=email&utm_source=e-news&utm_campaign=greenbuzz

http://www.waste360.com/food-waste/two-companies-using-technology-reduce-food-waste

http://www.huffingtonpost.com/entry/app-food-cowboy-connects-truckers-trucks-reject-fresh-food-charities-food-banks_us_5745c84fe4b0dacf7ad38f91

http://www.leanpath.com

http://www.refed.com/about

https://foodrescue.us/the-solution/

http://www.foodcowboy.com