Sao Paulo, SP, Brazil, June 2, 2020: People wait in a big line to receive food donations for lunch in a downtown street during a severe economic crisis caused by Coronavirus, COVID-19 pandemic. Photo: Nelson Antoine/Shuterstock
Society

With the “Kinder Egg” strategy, startups attack food waste in Latin America

Startups like the Brazilian Food to Save, the Mexican Cheaf, and the Chilean GoodMeal tackle the problem using technology and a recent habit for all of us: shopping online.

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The world has produced more than enough to feed all human beings for some time now, but hunger persists in several countries. Yet, paradoxically, food waste remains a problem even in these places. Is there any way we can stop throwing good food in the trash?

According to the United Nations (UN), in 2019, we wasted 931 million tons of food (17% of the world’s food production). Although the largest share of waste occurs indoors (61%), that which occurs in the service sector (restaurants, hotels, schools) and commerce (markets, grocery stores) are also relevant, 26% and 13%, respectively.

Startups such as Brazil‘s Food to Save, Mexico‘s Cheaf, and Chile‘s GoodMeal are trying to tackle this problem on the front lines. Using technology and a relatively recent habit – buying anything through apps –they offer consumers the surplus from restaurants, bakeries, and supermarkets, products still fit for human consumption but which were previously dumped for various reasons, with discounts that reach 70%.

That’s what Lucan Infante, co-founder and CEO at Food to Save, calls a “win-win-win” model: “I benefit users by saving these [surprise] bags for them; the business, generating a new flow of customers and cross-selling; and the environment.”

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The surprise bags are common to the three startups. In exchange for a huge discount, consumers give up choosing. Lucas calls them “Adult Kinder Egg.” At Food to Save, consumers choose only the type of food they want (salty, sweet, or mixed), and one of the three available bag sizes/prices (BRL$ 10.99, BRL 15.99, or BRL 20.99, that is between $2 and $4).

Inside the bags are products close to expired or that look less than ideal (think “ugly” fruits and vegetables) but are still safe for human consumption. In addition to facilitating the logistics of partner businesses and organizations, the surprise factor unfolds into awareness and attraction: “I want to draw your attention, of all people, actually, to the issue of food waste,” explains Lucas.

Between Brazil and Spain

The idea of creating Food to Save was born when Lucas was leading another venture, a Carrefour franchise in Malaga, Spain, where he has lived with his family for six years. (Today, his wife runs the franchise.) “The first impact [at the supermarket] is those surpluses — from the product that ends up being rejected at the fruit store or that dairy that is close to expiration and ends up not being sold and is thrown away. That ended up bothering me a lot,” recalls Lucas.

Lucan Infante, co-founder and CEO at Food to Save. Photo: Courtesy.

Inspired by the Danish startup Too Good to Go, founded in 2015 and with a presence in Europe and the United States, Lucas rushed to Brazil in October 2020 to invite his first partner, Murilo Ambrogi, at the time on the leading food delivery app in iFood country, to work on a similar idea. In two months, the duo outlined and took the first steps of what would become Food to Save. (Lucas stopped the brainstorming and returned to Spain to witness the birth of his daughter.)

Food to Save bootstrapped with three partners (Fernando Henrique dos Reis joined Lucas and Murilo) and received an angel investment right after it. In all, BRL 800,000 have already been invested in the business, which is now preparing for a seed round.

Food to Save’s MVP was an Instagram profile launched in May 2020. “We started selling through ‘Direct’ [messaging], a very insane thing, total startup.” Then came the website, before the app, which helped the founders collect data and insights to oil the system’s usability. The app for Android and iOS was ready at the end of 2021 and has already accumulated more than 100,000 downloads.

Currently, the service is available in the city of Sao Paulo and Campinas, an industrial city 274.9 miles from Sao Paulo.

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“I was part of the food waste problem”

Rodrigo Haydar, 31, has spent the last few years working with food and beverage multinationals in Latin America and Asia. In an interview with LABS, he said that he was “part of the food waste problem”: “Many times, I was forced to make decisions that, due to external factors such as government regulations, changes in specification tables or even a minor mistake on an export document, ended up in tons of perfectly good food being wasted.”

Rodrigo Haydar, founder of GoodMeal. Photo: Courtesy.

Against this backdrop, he returned to Chile and founded GoodMeal, not before doing in-depth field research. With his partner, Maximiliano Acosta, he started looking for solutions in other parts of the world. In parallel, he spent two weeks talking to 200 Chilean restaurant owners. “We came to a clear conclusion: nobody wanted to throw food away, but there were no solutions available that didn’t create a major impact on their operations, so they had no choice but to throw it away.”

From that came the MVP, in this case, a marketplace via WhatsApp with two bakeries. Within a week, there were already more than a hundred people on the waiting list to purchase the surprise bags. The startup then brought in José Castro as co-founder and CTO and developed a beta version of the app in just one month, reaching the mark of 1,000 transactions in the same period. Gabriel Lara, COO, completes GoodMeal’s founding team.

GoodMeal was also born with its own capital and with the help of Start-Up Chile, the Chilean state accelerator that does not ask for equity in exchange for investments. With this incentive, GoodMeal reached 100,000 monthly transactions and closed deals with the country’s three largest restaurant chains (Starbucks, Juan Valdez, and Dunkin’).

GoodMeal’s app. Photo: Screenshot.

Currently, GoodMeal operates in the capital Santiago and in Viña del Mar.

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The stories of all these founders are similar, and not by chance. In the case of Kim Durand, an aerospace engineer who founded Mexican Cheaf, he worked at another delivery app. “After spending seven years at Uber and being responsible for UberEATS in Northern and Western Mexico, I decided to get involved in a cause and use my skills to maximize impact,” he told LABS.

Cheaf’s pilot was also born on WhatsApp in a group created in July 2020. Upon validating the model and finding demand, Kim hired a community manager, a developer, and someone to take care of the commercial area. The first version of the app came out on September 29, 2020 — the date was not random; it was the first International Day on Food Loss and Waste, established by the UN. Elena López joined the team in March 2021 as COO and co-founder.

Kim Durand, founder and CEO at Cheaf. Photo: Courtesy.

So far, Cheaf has raised $3.55 million in two investment rounds, one in January 2021 ($550,000) and another in November ($3 million). Investors include GFC, 500Startups, Kima Ventures, and Soriana.

For now, Cheaf operates only in Mexico: Guadalajara, Monterrey, and Mexico City.

Both GoodMeal and Cheaf also use the surprise bag concept to distribute surpluses, with the same promise of discounts of up to 70% off-shelf prices. What varies between them is the fee charged by the establishments.

GoodMeal doesn’t break out the percentage; it just says it collects “a small fee” from each transaction, plus an annual administrative fee to cover operating costs. At Cheaf, the commission charged is 20%. In the Brazilian Food to Save, it varies between 30% and 40%.

The percentage charged by Food to Save is higher than that of traditional delivery platforms, such as iFood and Rappi. Lucas, founder and CEO of the startup, defends himself: “iFood sells the product that you [the owner of the establishment] just produced, with your margin up there. I’m selling a product you threw away.”

By reusing and generating revenue from what used to literally turn to waste, startups take care of the entire operation. Lucas says that Food to Save offers pick-up and delivery options (in partnership with logistics startups) but that it encourages pick-up: “In addition to being something more sustainable, you allow yourself to discover new establishments, it can generate a cross-selling; you can go for a walk, something that is much healthier than asking a courier to deliver it to you,” he says.

In the cases of Cheaf and GoodMeal, the delivery option is not offered. Customers need to go to the partner businesses to retrieve their surprise bags.

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And what about the delivery giants?

Traditional delivery apps, by the way, are not seen as competitors. On the contrary, they can be allies in the fight against waste, and although there are signs that actions in this direction are on the radar of these giants, there is still much to be done.

“In Mexico, [traditional delivery] apps are well-positioned against the use of plastic and non-recyclable packaging,” says Kim, “but little is done when it comes to food waste. Cheaf is not intended to be the solution, but part of the solution — and we hope that more actors will be a part of that.”

For GoodMeal, the big platforms can become allies. “The problem of food waste is huge and on a global scale,” says Rodrigo. “One solution alone will not be enough, and the more solutions available, the greater the impact.”

Results and future plans

The three founders do not open their revenue, reflecting the incipient moment they are in, but they are proud of a metric that seems more important to them in the context of impact in which they are inserted: the tons of food saved.

In seven months of operation, Food to Save ‘rescued’ 40 tons of food, purchased by around 80,000 active users (the startup considers active users who bought something in the last three months), from businesses such as the Bella Paulista (a famous bakery in Sao Paulo), Rei do Mate (specialized in quick meals), and O Tradicionalíssimo (donuts).

Cheaf’s 100,000 users rescued 150 tons of food from 600 establishments.

GoodMeal, with 25,000 paying users and 800 partner businesses, claims to have saved 250 tons of food.

In addition to the environmental aspect, the socio-economic factor is at the root of these companies’ activities. “Looking at Brazil, our model appeals to the attractiveness of the discount and to preventing these products from being discarded in a scenario where more than 20 million people are hungry,” says Lucas.

In 2021, Brazil returned to the hunger map due to the destruction of public policies by the current federal government, an unprecedented setback, unparalleled in the world.

The three startups have ambitious goals for the near future. They want to exponentially increase the tons of food saved from garbage and expand geographically.

GoodMeal wants to expand its channels in 2022 to reach other countries in the following year: “Our goal is to be a leading resource optimization platform for the food industry around the world,” says Rodrigo.

Cheaf, without specifying dates, also wants to go beyond the Mexican borders and is initially targeting other Latin American countries. Not only that: it wants to act at more points in the food chain, such as production and transport: “We want to position ourselves as a leading sustainability app in Latin America, taking action against any waste that causes environmental impact or social injustice,” says Kim.

Food to Save is focused on Brazil for now. In 2022, in addition to reaching 500 tons of saved food, it wants to expand in the country in the neighboring cities of Campinas (SP) and Rio de Janeiro (RJ).

In his presentation to the press, Kim, the founder of Cheaf, says that his greatest success would be if, in the long run, the startup‘s service was no longer needed.

Translated by Fabiane Ziolla Menezes