Hungry for a Kinder World
Ireland currently generates 1.27 million tonnes of food waste annually, with the average family throwing away €700 - €1000 of food each year. Despite this, food insecurity is a serious issue affecting communities nationwide. With the spread of Covid-19 and its economic and social impact, there is an increased need for food provision within communities to support those who are impacted.
Food waste also hurts our planet. Global food production accounts for around 35% of all greenhouse gas emissions, 8% to 10% of which are directly related to food waste – a staggering four times that of global aviation emissions. And, according to Project Drawdown’s 2020 research study, reducing food waste has been identified as the number one most effective way of fighting climate change.
Eight years ago, the social enterprise FoodCloud came into being to tackle these challenges –food waste and food insecurity– head on, with a mission to transform surplus food into opportunities to make the world a kinder place. They developed an online platform and app which connects Irish retailers and food suppliers (e.g. supermarkets) that have surplus food directly with charities and community groups across the country. These charities can then ensure that no good food goes to waste.
Operating as a foodbank themselves, FoodCloud built on that knowledge to develop their app and help optimise the operations of local foodbanks in Ireland. Through this app charities are informed about available surplus food at the end of the day, can confirm whether they are interested, and go collect it.
To deal with larger and regular volumes of surplus food, FoodCloud also manages three hubs in Cork, Galway and Dublin, where farms, manufacturers and distributors can deliver surplus, which is in turn redistributed to charity partners.
Instead of paying a fee to dispose of their surplus, retailers and distributors pay a contribution to FoodCloud who then manages this surplus. This is also a way for them to show they are committed to reducing their waste, and play a part in the circular economy.
With this innovative solution, FoodCloud generates both environmental impact, by reducing food waste and the CO2 emissions associated to it, and social impact, by distributing food to those who need it most.
Key Social Impact Figures
End of 2020
The investor for impact supporting FoodCloud
How it started
In May 2018, Rethink Ireland and AIB (Allied Irish Bank) made a three-year, €2,580,000 investment in FoodCloud’s mission to minimise food waste across the Irish food supply chain. The investment was made possible thanks to a multi-year commitment from AIB which was matched by the Department of Rural and Community Development of Ireland.
Rethink Ireland had previously invested €220,000 in FoodCloud’s technology and were confident that they could deliver their ambitious investment goals. They had a strong strategic plan to scale and achieve financial sustainability by the end of 2020. However, they were still relying on philanthropic donations and needed investment capital to build infrastructure, and increase their customer base and income.
Rethink Ireland therefore decided to support FoodCloud through their Growth Fund, which supports scalable social innovations to achieve real impact and transformative change in Ireland. They believed FoodCloud had a highly scalable social enterprise business model that could ultimately reinvest its profits back into its mission of reducing food waste and increasing social inclusion.
But this investment was not without risk. FoodCloud had been bootstrapping until then, and there was some operational risk. Their technology was still volatile at the time, and Rethink Ireland also wanted to make sure that the social enterprise had the resources and staff for the scaling phase.
The Rethink Ireland/AIB investment therefore included €2,250,000 in cash grants, €240,000 in non-financial support and €90,000 in a communications budget. Cash payment triggers were agreed on a yearly basis, and were linked to FoodCloud’s strategic plan targets, which included organisational or financial milestones.
Thanks to this support, FoodCloud strengthened three key drivers: people, products and processes.
As the activities linked to their hubs were managed by a separate legal entity, Rethink Ireland supported FoodCloud in merging them into one company, bringing all the activities under the same operational team and technology. They completed a merger, grew their headcount by 36% (42 to 57), and strengthened their management team and Board.
The investment also focused on rebuilding FoodCloud’s technology platform, called “Foodiverse”, to make it the ‘go-to’ choice for international food redistribution organisations and, in turn, drive revenue growth and sustainability. The aim was to improve the supply chain logistics, and to implement bespoke software to manage their growing charity and store base, which increased by 25% (10,000 to 12,500).
In 2020, the Covid-19 pandemic put pressure on FoodCloud due to the limited number of volunteers and restrictive work practices. The volumes of food varied greatly between panic buying and the closure of the hospitality sector. At its peak time, FoodCloud doubled the amount of food redistributed. They were able to manage this because they were ready to accelerate impact at that stage, thanks to the changes they put in place with the investment.
Theory of Change, Impact Strategy, IMM
Management team and CEO support
Access to networks
Rethink Ireland also gave non-financial support by performing an audit of FoodCloud, working with them to identify where they needed most help. Rethink Ireland initially focused on their strategic plan and impact measurement and management, and provided more bespoke support later on, especially to help improve their technology.
FoodCloud’s impact is twofold: it reduces food waste and CO2 emissions, and provides food to those in need. It also increases social cohesion within communities by connecting charities and food suppliers. FoodCloud therefore decided that the best KPI to capture its impact was tonnage – on food moved from retailers to charities, on waste avoided and on emissions prevented.
Thanks to an efficient software and a strong technology, FoodCloud can increase its returns and the societal impact generated at scale. The more the social enterprise grows, the bigger the impact generated relative to costs. We can see this in the food saved relative to income, as well as by the tonnes of food saved per employee.
FoodCloud have managed an incredibly challenging period of organisational change, operational growth, and concluding with a global pandemic, over the course of the Growth Fund investment period. They exited the investment with a highly skilled team, world-class technology platform that could revolutionise food redistribution at a time of climate crisis, and are well positioned to support Ireland in achieving its 2030 UN Sustainable Development Goals.
In the coming months and years, FoodCloud will increase their customer base and partner supermarkets, and continue raising awareness about food waste. In addition, they are exploring the possibility of selling their technology to other (international) foodbank organisations, as another way of scaling their solution.