Investment proposal

Memorandum

To: Professor Clark Hansen, CEO, AMDP

From: Hannah Wu, Research & Development Analyst, AMDP

Date: March 5, 2024

Subject: Proposal to Consider Investment in Too Good To Go

Dear Mr. Hansen, 

I have researched potential investment opportunities aligned with Anima Mundi Development Partners’ (AMDP) mission of promoting social responsibility, environmental sustainability, and profitability. After thorough analysis, I propose that AMDP invest in TooGoodToGo, a promising enterprise focused on recycling food waste. In this memo, I will address the following: 

• Fundamental Concepts 
• Company Description
• Critical Appraisal of Company’s Practices
• Case for Consideration

Before delving into specifics, let’s ensure clarity on the fundamental concepts guiding our investment criteria:

1. Fundamental Concepts

• Triple Bottom Line (TBL): The Triple Bottom Line refers to a business framework that evaluates a company’s performance based on its economic, social, and environmental impacts. It highlights the importance of financial performance but also social and environmental responsibility, or the standard “bottom line” (Harvard Business School).

• Corporate Social Responsibility (CSR): Corporate Social Responsibility is a self-regulating mechanism that helps a company be socially accountable to itself, its stakeholders, and the public. Practicing corporate social responsibility means companies are making intentional efforts to benefit rather than degrading society (Investopedia). 

• Social Enterprise: A social enterprise aims to meet specific social or environmental objectives. It prioritizes social and environmental impact alongside financial sustainability (Investopedia). 

• Carbon Footprint: A carbon footprint measures the total greenhouse gases produced directly or indirectly by an individual, organization, product, or event. It’s calculated by totaling all emissions from every stage of a product or service’s lifetime. Examples of greenhouse gasses include carbon dioxide, methane, and nitrous oxide, each able to trap heat in the atmosphere. Reducing our carbon footprint is critical as it mitigates global warming, improves public health, boosts the global economy, and sustains biodiversity (University of Michigan)

Now, let’s delve into TooGoodToGo and its alignment with these principles.

2. Company Description

TooGoodToGo (TGTG) is a mobile app and certified B corporation that connects users with surplus food from restaurants, grocery stores, cafes, and other food establishments. According to its website, TGTG claims to be committed to reducing food waste, promoting sustainable consumption, and fostering a community dedicated to combatting food waste. Their impact report reveals the importance of their mission as 40% of worldwide food produced is wasted, food waste accounts for 10% of all human-generated greenhouse gas emissions and costs up to $1 trillion each year. 

TGTG’s app allows its 85 million registered users to purchase surprise bags of surplus food at a discount. Some of its partners include Aldi, Blue Bottle, Eataly, Cava, and more. TGTG’s CEO Mette Lykke claims they actively partner with governments, universities, and policymakers to launch new programs to improve legislation and education around food waste (2023 Impact Report). 

Founded in 2015 in Denmark, TGTG has saved roughly 122 million meals of food waste. It currently operates in 16 countries with approximately 85,000 vendors. As the largest marketplace for surplus food, TGTG is perceived as a leader in the fight against food waste. It was honored with the “Cultural Impact Award” at the annual Apple App Store Awards. 

Financially, TGTG has exhibited promising growth, attracting users and partner establishments to its platform. It registered over 21 million new users in 2023 alone. According to Tracxn, a data tool for venture capitalists, the company is valued at $818 M as of 2021. Lykke states that the company is profitable month over month, with a revenue of $110 M in 2023 (MacBride). Investors are excited as the company raised over $55M in 2022. 

With that said, let’s see what critics have to say.

3. Critical Appraisal of Company’s Practices:

Opinion 1: 

The Wageningen University studied TGTG’s impact on food waste reduction. It revealed that new users were attracted to the company’s mission, making them feel good in the process. One user shared, “I like it when the app tells me you’ve rescued food” (Haar and Zeinstra 58). The surprise element, convenience, and low prices were also selling points. The study showed that users consumed most food from the surprise bags, which positively contributed to waste reduction. However, the study also revealed that the app has its limitations in driving significant behavior change. TGTG’s impact on the attitude to minimize food waste is relatively small, raising concerns about its ability to engage users beyond those already committed to waste reduction. Users also expressed room for improvement, including increasing local partners, offering more flexible pick-up times, and adding food variation. 

Opinion 2:

Researcher Mengting Yu et al. conducted an empirical analysis on TGTG, examining over 1200 outlets in Rome to uncover the truth behind the platform’s impact on food waste reduction. It states that the platform mechanism allows its vendors to publish their surplus food bundle deals well before the pick-up time. This ultimately raises the question of whether the food sold on TGTG is effectively a leftover or a planned production. The researchers ultimately concluded that more investigation is needed.  

Opinion 3:

When TGTG was introduced to Philadelphia in 2021, it garnered criticism for its “mission to fight food waste without addressing the issue of food insecurity” (Lamme). Critics like Veronica Carden, founder of Club Sandwich, argue that it could disrupt vital food channels for vulnerable populations. She believes that food sold through TGTG should be donated or given away. On the other hand, local restaurant owners like Judy Ni view the platform as a way to minimize food waste and recover costs. She emphasizes that food sold through the app is unsuitable for food bank donations. However, it raises the question of TGTG’s target users as it seems their primary consumers aren’t vulnerable populations who could benefit from discounted food. 

Opinion 4:

Sustainable Business Magazine sheds a positive light on TGTG, stating that the app operates on a “win-win-win” proposition. It benefits businesses by attracting new customers and financially recovering sunk costs while offering flexibility for customers. Additionally, TGTG supports businesses in minimizing waste, providing training sessions, check-ins, and market analysis to optimize operations. The article praises TGTG for addressing misinformation about food waste and its tangible commitment to tackling climate change and securing a sustainable future. 

4. Case for Consideration:

I strongly advocate for AMDP’s consideration of investment in TGTG as it aligns with AMDP’s mission of social responsibility, environmental sustainability, and profitability. TGTG’s approach to reducing food waste fits the Triple Bottom Line framework, emphasizing social and environmental impacts alongside financial performance. As a certified B corporation, TGTG prioritizes CSR and social enterprise objectives. 

Although critical appraisals raise concerns about TGTG’s effectiveness in driving behavior change and addressing food insecurity, we must remember that TGTG’s goal isn’t to solve food poverty. Instead, it strives to minimize food waste, which it has accomplished with an impressive track record. TGTG’s operational model offers a “win-win-win” proposition, benefiting businesses, customers, and the environment. By supporting TGTG, AMDP can contribute to positive societal and environmental impact while potentially yielding financial returns.

Thank you for considering my proposal. Please let me know if you require any additional information or clarification.

Sincerely,

Hannah Wu

Works Cited:

“Carbon Footprint Factsheet.” Center for Sustainable Systems, University of Michigan , css.umich.edu/publications/factsheets/sustainability-indicators/carbon-footprint-factsheet#:~:text=%E2%80%9CA%20carbon%20footprint%20is%20the,end%2Dof%2Dlife). Accessed 01 Mar. 2024. 

Fernando, Jason. “Corporate Social Responsibility (CSR) Explained with Examples.” Investopedia, 14 Feb. 2024, www.investopedia.com/terms/c/corp-social-responsibility.asp. Accessed 01 Mar. 2024. 

Hutchins, Toby. “How Too Good to Go.” Sustainable Business Magazine, 6 Sept. 2023, www.sustainablebusinessmagazine.net/partner-updates/how-too-good-to-go/. Accessed 02 Mar. 2024. 

MacBride, Elizabeth. “Too Good to Go Expands in the United States, Another Example of a Fast-Growing Company That Helps Consumers and the Planet.” Forbes, Forbes Magazine, 5 July 2023, www.forbes.com/sites/elizabethmacbride/2023/06/28/too-good-to-go-expands-in-the-united-states-another-example-of-a-fast-growing-company-that-helps-consumers-and-the-planet/?sh=6766d42e7f11. Accessed 01 Mar. 2024. 

Miller, Kelsey. “The Triple Bottom Line: What It Is & Why It’s Important.” Harvard Business School, 8 Dec. 2020, online.hbs.edu/blog/post/what-is-the-triple-bottom-line. Accessed 01 Mar. 2024. 

“Our Ambitious Mission: Putting an End to Food Waste Worldwide.” Too Good To Go, www.toogoodtogo.com/en/blog/our-ambitious-mission-putting-an-end-to-food-waste-worldwide. Accessed 01 Mar. 2024. 

“Social Enterprise: What It Is, How It Works, and Examples.” Investopedia, 11 June 2022, www.investopedia.com/terms/s/social-enterprise.asp. Accessed 01 Mar. 2024. 

Sweitzer-Lamme, Maddy. “Is Too Good to Go Actually Good for Philly?” Eater Philly, 12 Apr. 2021, philly.eater.com/2021/4/12/22368600/too-good-to-go-philly-food-waste-mutual-aid. Accessed 02 Mar. 2024. 

Too Good To Go , 2023, Too Good To Go 2023 Impact Report, tgtg-mkt-cms-prod.s3.eu-west-1.amazonaws.com/46417/NA_2023_ImpactReport-%281%29.pdf. Accessed 01 Mar. 2024. 

“Too Good to Go Company Profile.” Technology + Human-in-the-Loop for Deal Discovery, Tracxn, tracxn.com/d/companies/too-good-to-go/__-qKipQ_7Ug6NixoY5rvQyrtG4K-4Z-p947-7Y9xrPBs. Accessed 02 Mar. 2024. 

Van der Haar, Sandra, and Gertrude G. Zeinstra. The Impact of Too Good to Go on Food Waste Reduction at the Consumer Household Level : An Explorative Study, 2019, doi:10.18174/501904. 

Yu, Mengting, et al. Saving Food from Waste or Advance Selling? An Empirical Analysis of Too Good to Go Offering in Rome, 23 Aug. 2022, doi:10.20944/preprints202208.0397.v1.