🦃 Can French Conscious Consumerism Deliver an Era of Zero Waste?
A Very French-Giving Edition of Startup ROI
Welcome to Startup ROI, where we explore global technology trends and how they manifest themselves in France 🇫🇷 . Whether you're an entrepreneur, investor or tech enthusiast, I'm glad to have you here! 📩 Get in touch
📌 If you are a startup interested in being featured or a VC interested in collaborating, please reach out directly: firstname.lastname@example.org
🎧 Need to escape an awkward Thanksgiving dinner table conversation? Lock yourself in the bathroom and have a listen:
To my American audience, Happy Turkey Day! Bear with me while I break down the nuances of this annual festivity. Thanksgiving is a bizarre holiday, but one we tend to cherish for a variety of reasons. Despite its problematic origins (#colonialism), the holiday has evolved over the centuries to become an annual gathering of extended family in which gluttony is encouraged and bickering is inevitable. On the 4th Thursday of November (it doesn't even have a fixed date), families gather around the table for an afternoon feast of turkey and a shitload of sides (yams, mashed potatoes, green beans, cranberry sauce, corn on the cob, stuffing) to commemorate a mythical meeting of two cultures: the pilgrims at Plymouth Rock and the Native Americans. At this point, the historical context serves as an excuse to gorge on food and wine and then watch/nap through some American Football on TV. It's not uncommon to go "on a walk" with your sketchy cousin to ingest some pre-dinner substances that may enhance the mealtime experience. In spite of the in-fighting and reckless consumption, everyone adores the central theme: food. Which I know my French readers can appreciate.
In the spirit of the holiday, I wanted to touch on an important subject: food waste. Whether you're deep frying a turkey breast or roasting a 20lbs (10.8kg) bird, the holiday tends to highlight decadence and indulgence over modesty and thoughtful consumption. But let's not forget, this is a time to be thankful. Thankful for friends, family and of course food. Yet in the frenzy of cooking extraordinary portions for holiday guests, it's easy to forget the amount of food waste we create. It's ⅓. One third of all food gets thrown away. In the garbage. WTF. We live in a world of big data, algorithmic optimization and abundant supply but we haven't figured out how to grow the right amount of food and get it to the people who need it most.
This is an issue I feel is near and dear to the hearts of many. But I find it especially so in France. As with many trends we've explored here (the circular economy, sustainable energy production, green hydrogen), food waste fits squarely into the broader concern around environmental and social good. Anecdotally speaking, this feels more top of mind for my French counterparts than those back Stateside. Tangibly speaking, there are several French Tech startups working to mitigate waste across the food supply chain, educate consumers, and streamline a zero waste lifestyle.
Waste Not, Want Not
Finding solutions to our food waste problem is not only a noble effort, but an increasingly profitable business model thanks to progressive legislation in certain locales. The French Government has been a pioneer in this regard, instituting stringent food waste regulations back in 2016 that ultimately served as a blueprint for other nations (and states, including California).
You'll notice in the graphic above that the main target for the legislation is midway down the food supply chain (i.e. grocery stores & restaurants). Here is a stat in support of my earlier hunch: In the EU, about 53% of food waste happens at the consumer level, in France, consumers only account for 33% of it. The idea of a "conscious consumer" has been around for a long-time, although many argue that it's a way for corporations to shift blame downstream. Nevertheless, it's an important mindset, and it appears the French have adopted it in droves. It may be unlikely that any individual can have enough impact to move the needle by simply shifting their behavior. But pairing this good intention with solid legal support upstream can certainly accelerate progress.
Let's briefly zoom out on the supply chain to see where startups have chosen to direct their efforts:
We live in a complex global economy and our production and access to food reflects that fact. From growth to storage to transportation and processing, there are myriad steps that take place before we, the consumer, even see the physical products on the shelf. Roughly a third of the waste is derived from this portion of the supply chain, but the large majority takes place in the subsequent stages. It's here that several startups have focused their efforts achieving what is called "triple bottom line benefits"
Economic benefits for customers (tax incentives for grocers)
Social benefits for charities (free food)
Environmental benefits (reduced waste)
Phenix has developed a sophisticated exchange platform based on the above value propositions. They match retailers with food waste recipients and then help with execution on the physical flow of materials. Beyond the core Phenix platform, they are also responsible for awareness campaigns and waste reduction consulting.
Despite all this information, I was still having trouble grasping how exactly this could be a profitable and scalable business. How much money is there in food waste? And this is where we come back to the sheer volume of waste (again, mind-boggling) paired with legislation and the cost of waste disposal.
"Despite improvements in flow optimization and purchasing policies, food waste is still a major concern for retailers. Recent data show that on average a supermarket throws away about 3,3% of all its products, for a total amount, in France, of 4,5 million euros . The root causes for waste are numerous: low turnover for some stock keeping units (SKUs), unpredictability of demand, constraining expectations and standards, in terms of freshness and aesthetic… "
— r2∏ Case Study (Link)
If your average supermarket throws away around 3.3% of it's inventory (€4.5M) there is some serious value in (a) reducing waste management costs and (b) capturing tax incentives imposed by the government. Phenix has built a well-oiled machine capable of matching waste producers/receivers, coordinating 3rd party distribution, building advocacy at scale, and supporting partners at various levels in the value chain. And it's reflected in their year over year turnover.
Their business model is fairly intricate and interconnected (as shown below). In fact one of their key partners, Too Good To Go, sits one step below them on the value chain and therefore is perhaps more present in the mind of the conscious consumer.
Despite its Danish origin, Too Good To Go was co-founded in multiple countries with domestic counterparts. Their French co-founder, Lucie Basch, is now the Chief of Global Expansion. The app allows you to find stores and restaurants nearby that are ready to give away food for free or at a steep discount at the end of the day. In some cases, you can find Michelin quality meals for dirt cheap simply because the Chilean Sea Bass is close to its expiration date. The app has been incredibly successful, and it's latest funding round only testifies to its growth potential, as well as the consumer appetite for thoughtful food.
No Phones at the Dinner Table
Phenix and Too Good to Go represent the B2B and the B2C solutions in the food waste landscape. Many conscious consumers are aware of these tools and likely use or support them. France's penchant for conscious consumerism is, I would argue, a secret weapon in galvanizing support and action around the food waste crisis at hand. But how do we get the attention of the better part of the country (and the world) that is less concerned about food waste? In an increasingly online society we have to consider the effects, positive and negative, of how we interact with food, products and each other on the internet. Perhaps no one evaluates these dynamics better than Marie Dollé in her newsletter titled In Bed with Social. In an article published earlier this year, she remarks that a generation of foodies is growing up on social networks and it's having an impact on our relationship with brands and nutrition itself.
Evidently Gen-Z puts a major premium on food, spending roughly 23% of their income on it. Naturally, this has implications for food brands and the way they create, distribute and evolve their products. A few years ago, CB Insights published food trends to watch in 2018. One of my favorite predictions was that "the line between food and cosmetics will thin." Ingredients like turmeric and moringa blur the lines between wearable/consumable and probiotics, a well-known staple in Kombucha and champion for gut-health, is showing up in cosmetic brands. But as these trends develop, how do we know what is what? Coincidentally, these two areas are the specialty of the handiest app for your next grocery visit: Yuka.
Yuka is an amazing independent project that claims to maintain responsible funding resources to eliminate any conflicts of interest from "big food." Basically, you can scan any barcode using your phone camera and it will rate said food on a scale of 1-100 while demystifying the intentionally opaque nutrition facts on the back of the packaging. This is the perfect trojan horse to get even those who don't care about nutritional value or sustainable food to get involved in the movement. It gamifies your grocery shopping experience and provides transparency to your shopping cart simultaneously. They've got a comprehensive database of 1.5M food products, 500K cosmetic products with an additional 800 added daily. It saves your scan history, makes recommendations and builds up your muscle memory for healthier purchasing decisions. I can't think of a better on-ramp to the sustainable food movement than this.
To get into the Thanksgiving spirit, I took a snapshot of 3 French grocery items that serve as hilarious (and pathetic) replacements for a real Thanksgiving feast: turkey cordon-bleu, sweet potato boulettes and red Haribo gummies (I couldn't find Cranberries…).
Food for Thought
This year, when we go around the Thanksgiving dinner table and give thanks (my family can't be the only that does this) there's no doubt I'll be putting the French Tech community on my list. Not only because it provides the substance for this very newsletter, but also because of its intentional nature, thoughtful innovation and philosophy that's antithetical to zero-sum. Not every French Tech company is an impact company, but the ethos of ecological and social good appears to be baked into their DNA.
So, when you get up for that third plate of turkey, sides and gravy, keep in mind that statistically it's bound for the garbage bin.