Too Good To Go: $162 Million Selling Food That Was Going Into The Garbage
Here’s an interesting problem. Every year $1 trillion dollars of food is thrown out. $130 billion of that is from restaurants in the U.S (more food waste facts here).
Enter a group of Danish entrepreneurs in 2015 who had the idea to try and solve buffet restaurant waste.
They started Too Good To Go, which let restaurants bag up food that would be thrown out at the end of the day and then put them up for sale as mystery bags where the customer doesn’t know what’s in each one.
They quickly expanded to other restaurants, bakeries and supermarkets.
By 2019 they had hit $25 million in revenue and were ready to enter the U.S. market.
They launched into the U.S. in September 2020 in New York and quickly expanded into 33 major metro areas.
The mystery bags sell for $3.99-$9.99 in the U.S. and TGTG recommends that the discount be around 70% of the retail price.
They’ve quickly grown revenue.
2020 - $46 million
2021 - $76 million
2022 - $110 million
2023 - $162 million
Profits have been minimal as they try to scale and own the market. But with the venture community focusing on profits in 2022 they adjusted their business and had their first profitable month in October 2022.
In 2023 they hit $8 million in EBITDA and are the market leader in selling food that would be going into a garbage or compost bin.
I love this business. It works on so many levels.
It’s solving a giant problem in the world.
It helps businesses generate revenue from what was a waste product.
The mystery bags are perfect social media content with a ton of unboxing videos across the platforms.
It saves consumers money.
Unboxing videos help spread the word.
What other business generates revenue from waste and saves customers money??? Brilliant.
What could you do in this space?
Well you could try launching the same business in a different market, but given the scale TGTG has had to reach profitability it may be a long road to cash flow.
I think the learning here is to look at waste products from businesses and see how you could package that to another consumer. If you think of any interesting examples send me a note!
There’s money everywhere.
Great video on the business.
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