While environmental and social outcomes are becoming increasingly aligned with financial viability, food waste is one of those issues where there is truly an opportunity for everyone to win with the right solution. That is the idea behind Flashfood, a company that has created a mobile marketplace to provide grocery shoppers with access to heavily discounted food nearing its best by date. The Flashfood platform diverts food that would otherwise end up as landfill, while enabling retailers to earn greater profits and price-sensitive shoppers to buy more affordable food.
The Food Waste and Food Access Problems
Food waste has been a well-documented environmental issue, presenting a significant addressable opportunity to reduce emissions from the food supply chain while increasing overall food access. It is estimated about 30-40 percent of the total food supply is wasted in the US. In the retail sector alone, food waste amounts to 16 billion pounds a year, representing about $37 billion a year in lost value due to food reaching its best by date before grocery stores have a chance to sell it. When food gets thrown out it usually ends up in a landfill where it decomposes and produces methane gas, a potent greenhouse gas. According to the FAO, if the food waste produced globally were a county it would be the third leading emitter of greenhouse gasses behind the US and China.
At the same time, the USDA estimated that in 2020, more than 38 million people were food insecure including almost 12 million children. Shoppers are becoming even more price sensitive today with inflation rates currently outpacing increases in household incomes. Over the past 12 months, the Consumer Price Index rose 7.5 percent, not seasonally adjusted. This is the largest 12-month increase since the 12-month period ending February 1982. Food prices increased 7.0 percent over the past year, including many staples, making it harder for families to afford meals.
While there are a number of retail food waste solutions that have been proposed, many of them require substantial capital expenditures or significant workflow changes in the grocery store. Fragmented supply chains and tight labor also hinder efficacy and efficiency of potential solutions.
The Flashfood Fix
Driven by a mission to reduce the environmental impact of food waste while increasing food access, Flashfood has developed a digitally driven solution for grocery retailers to sell surplus food and reduce their carbon footprint while also increasing their profits. The process is simple: 1) store employees post near-expiry food items onto Flashfood’s platform, 2) potential shoppers can browse those items (usually 50% off the original price), 3) shoppers purchase items on the mobile app, and 4) shoppers then pick up orders at the Flashfood Zone in store, usually located near check out. All participating Flashfood store locations can easily be found via the store locator and on the app.
In addition to providing an outlet for surplus food, the app has also been shown to drive further traffic to participating grocery stores. Early data showed 75 percent of Flashfood shoppers were buying full-priced items in addition to their Flashfood orders. Grocers can also use the app to track waste and food diverted from landfills when they post items so they can better report on sustainability goals. This is how the platform creates a “win-win-win.” Retailers earn greater profits and reduce the “shrink” expense around fresh items. Shoppers save money with up to 50 percent discounts on core meal items. And the environmental benefits from reducing food waste.
A Call to Action
The company was founded in 2016 after founder and CEO Josh Domingues received a call from his sister who was distressed after throwing out $4,000 worth of food from a catering event. After doing some research he decided there must be a way for shoppers to buy food nearing its best by date at a discounted price. The company first launched in Loblaw stores across Canada in 2019, eventually rolling out to around 650 stores. It entered the US market in late 2019 with anchor partners Meijer in the Midwest and GIANT in the Northeast.
“Food waste is a massive issue, as is food insecurity. Our growth to date has allowed us to connect hundreds of thousands of families with fresh affordable food, while reducing harmful emissions that contribute to climate change,” said Flashfood Founder & CEO Josh Domingues. “We're beyond excited to partner with S2G, a visionary fund in food system innovation, to continue to scale our growth and impact.”
Today Flashfood can be found in over 1,200 participating partner stores including GIANT, Stop & Shop, Giant Food of Maryland, Meijer, Tops, Martin’s Markets, Family Fare, Loblaw Companies Limited and more. The company has diverted more than 33 million pounds of food from landfills, saved shoppers more than 100 million on groceries and fed 290,000 families to date.
Flash Forward
We are thrilled to lead Flashfood’s 12.3M Series A alongside ArcTern Ventures and existing investors including General Catalyst and Food Retail Ventures and for our Managing Director, Chuck Templeton, to join the Flashfood Board of Directors. The funding will be used to support Flashfood’s continued expansion in the US and enhance the company’s ability to feed more families affordably by working with retailers to sell food that would typically be discarded. We look forward to partnering with the Flashfood team as they continue to work towards supporting a more sustainable food system by helping consumers save money while doing good for our planet.
