Every day plenty of good food ends up in the garbage bin. Catch the dollars before they end up in the bin and eliminate food wastage.
One of the biggest challenges in Africa is—food wastage. There are 3 stages: production, distribution and consumption. While many startups have sprung up to solve challenges in the first two stages, none has been founded to deal with the biggest challenge happening at the third stage. The primary focus of startups operating in production and distribution stages have been on boosting farmers’ yields and linking farmers directly to retailers—for their produce to fetch better prices and translate into higher incomes. In this chain, a major challenge that occurs in the last stage i.e. consumption, is food wastage. Part of this wastage occurs in domestic consumption (households) but we will focus on where the most wastage happens—restaurants.
Unlike in the West where there is an established culture of customers calling restaurants well in advance to reserve their tables, in Africa a culture of spontaneity pervades. An African can roll into a restaurant based on a decision made in the past 2 minutes! And expect to be served in less than 30 minutes! A tough question that restaurant owners are faced with is how many customers to anticipate for the day and what food shall they order. Unfortunately the answer to this early morning decision determines how much food is left over—unordered—at the end of the day or how many customers get disappointed to find their favorite food on the menu is finished. Too many disappointments, customers choose another restaurant where they are assured of finding the food they want. Too much food left over, a big pile of garbage results. Either case is
lost revenue for the restaurant owner. How can you optimize customer satisfaction while eliminating food wastage? That’s where this startup comes in.
First of all, the nature of this startup is ideal for the case in Africa but may not thrive in the Bay Area. While it is normal for folks in San Francisco to pull out their phones, push a button and have food delivered to their doorsteps via DoorDash or UberEats, the cost of shipping that food, not the price of the food, may be more than the daily income of some folks in emerging markets. Actually UberEats already operates in some cities in Africa but only a small segment of the population uses such a service. This startup is for the masses that are not served by UberEats.
How big is this market? Africa has 1.2 billion people (more than 3 times US population). Can you guess how many restaurants there are on the continent? It may be hard to arrive at a precise number. But the good thing is, we know from the demographics that a majority of them are young. Whether still in college, recent graduates, job seekers, employed but not yet married, married but not yet with kids, their absolute number is staggering. These masses of young people, who oftentimes find themselves sitting on the fence, regarding the decision of whether to eat a ready-made meal or go through the tiresome process of preparing food for themselves just because it costs less, are the target customers for this startup.
Currently, for restaurant owners, if they prepare too much food more than what customers who show up will order, the mountain of food will end up as garbage (zero revenue). They will have to pay garbage collectors to take away the pile (cost). While it is still business hours, how can restaurant owners avert such a loss? On one hand we have restaurant owners who are trying to mitigate on wastage. On the other hand we have people who are willing to eat ready-made food, the barrier being the slightly higher cost compared to cooking own food. Here lies a startup opportunity to eliminate food wastage while shielding restaurant owners from big losses.
It may seem like it is a simple task enabling restaurants list unordered food at discounted prices and connecting them to young Africans willing to eat ready-made food as long as the cost barrier is removed, but it’s actually a complex challenge. Some questions to be answered are: will they make orders online and go to the restaurants to pick their orders themselves? Is it possible to have home deliveries without causing a dent on the final price? Is it possible to make this deal sweeter for restaurant owners? Read on to find out how all the pertinent issues are tackled to turn this startup into a viable business. What this startup is attempting to do in Africa is actually a concept that is already practiced in some developed countries.
Is there possibility that restaurant owners could convert this unordered food into a marketing tool? Yes. And that is one of the hidden opportunities here that most folks will fail to notice. We'll flesh it out in a moment. Assuming you have access to capital and can set up a strong team, the following expert analysis and strategies shall be your guide for launching this startup.
Comments