Featured photograph courtesy of Zomato
Understanding the Context
Try and think back to a time when you weren’t ordering food off of Swiggy or Zomato, a time when you had to go to a restaurant to pick up a takeaway. Chances are, those good old days were over six years ago, because since 2014, with over 3 million food orders being placed across apps on a daily basis since, these food-tech platforms have slowly transformed the way we eat.
You can now eat whatever you want to, from a range of restaurants operating at different price points. More than ever–in a country with a low rank of 102 in the Global Hunger Index–food is abundantly available thanks to the developments pioneered by the food-tech industry.
Zomato is currently valued at $3 billion, while Swiggy stands at $3.3 billion; what’s common to both apps is their popularity with the urban cash-heavy consumer. As Srivats T.S., VP of Marketing at Swiggy said, “time-pressed, tech-savvy millennials (..) are looking for food options delivered to them in a matter of minutes.” According to Deloitte, over 60% of Indian millennials order in over once a month.
However, such lifestyle choices, while convenient, also come at a massive cost to the environment in terms of the sheer amounts of waste that food packaging generates; this can become ironic when the same Indian millenials seem to be “gravely” concerned about the environment too.
Clearly, for this generational concern to be translated into actionable change for a sustainable future, it is imperative to not only curb individual consumption but more importantly for the food-tech and restaurant industry to adopt more sustainable delivery practices. How can this be achieved? How is the sector developing and scaling environmentally sustainable services for customers and just how business-friendly are these options right now?
Click on a quote to read the opinion
“Businesses built around delivery models are so deeply focused on the per-unit cost of packaging, that it is almost a natural barrier to entry, given that sustainable packaging can be 30-35% more expensive than plastics.”
— Abhishek Agarwal, Founder of Pappco Greenware, the largest supplier of compostable packaging in India.
“…the price points for ‘being sustainable’ are not the same for every restaurateur. Sustainability in the food space should be understood from various aspects: kitchen practices, using environment-friendly material for one’s interiors or energy-saving air conditioning equipment amongst others.“
— Samir Kuckreja, Founder & CEO of Tasanaya Hospitality, a boutique consulting company.
With each order we make from a food delivery app, we are delivered an invoice with a hidden charge to the environment.
I started my journey in 2014, with my company Pappco Greenware. Pappco supplies 100% environment-friendly food packaging solutions to the hotel and restaurant market. We entered the market before the big boom of online delivery took place.
Back then food delivery was a smaller part of a restaurant’s business and it was easier for us to pitch eco-friendly packaging options to our customers. This was simply because the number of takeaway boxes required by each restaurant was so low that they didn’t mind paying the extra costs for sustainable packaging.
Now that the online food delivery trend has overtaken India, while there is no doubt that our business has seen good growth, it is also true that the growth in the plastic packaging business has largely outpaced us. Businesses built around delivery models are so deeply focused on the per-unit cost of packaging, that it is almost a natural barrier to entry, given that sustainable packaging can be 30-35% more expensive than plastics.
According to a 2020 report by Toxics Link, the online food delivery market in India generates upwards of 22,000 metric tonnes of plastic waste every month.
Countries have now started to realize environmental trade-offs coming from new trends in industries and have put in place new policies to tackle them. Regulations and bans on single-use plastics have been introduced in many countries including India, UK, the USA, and France. Similarly, people and brands, in turn, have also started to align themselves with being more sustainable.
Yet, with the global waste problem showing no signs of slowing down, it is imperative for us to question if we can actually sustain and allow industries to be built around such vast consumption. For example, single-use plastics (mainly used in food delivery) are amongst the top debris items found in most beach clean-ups across the world. Even if 50% of the packaging worldwide were to become sustainable, there would still exist far too high a number of single-use plastics and other harmful packaging to deal with. The problem might get delayed, but it will not go away.
But as they say, the night is darkest before the dawn, so it could just so be in this case as well. Thanks to technology we have not only increased consumption and waste, but also have created organized industries that meticulously collect data on the same. If these findings are applied correctly this can allow us to regulate not only single-use packaging waste, but other areas of impact like food and water waste, as well. The only important part is to act fast.
At Pappco, we see that everyday, more and more brands seek to become 100% plastic-free. For over 6 years this was a market that had only 1-2 players apart from ourselves. Now, it has over 300-400 companies that have all come up in the last two years. This is a sign of growth in the demand for sustainable packaging. Similarly, many new companies we service are focusing on organic produce, vegan offerings, and cruelty-free meat: they’re definitely receiving a good reception from their customer bases.
But these are just the possibilities of a future that could be. Strong action needs to be taken at a systemic level to solve the problem. For example, the worst part about most food waste packaging is that it is categorized as mixed waste. This means that it cannot be recycled and has to be landfilled or burnt, even if the package is in fact, made from 100% recyclable content. So, better policies on solid waste management systems for biodegradable and recyclable waste need to be devised for the sake of our fueled-by-food futures.
We urgently need to re-evaluate the juncture at which we stand today. The restaurant industry has become extremely polluting due to the growth in food deliveries. Today, food apps also disregard most ‘uncomfortable’ regulations like plastic bans because of the sheer investment at stake. We are at a crossroads where we can either destroy our environment, or begin the slow process of saving it.
I believe that food delivery apps are now slowly waking up to this reality. In Amsterdam, services like Ozarka have started to deliver food in reusable containers only. In New York, apps like Food For All are helping restaurants reduce their end of day food waste by connecting it to consumers at discounted rates. In India and most other countries as well, cutlery has become a completely optional part of your food delivery. Food delivery apps are also pioneering new developments in sustainable food packaging today too.
We need to ensure that no part of our environment is traded at a deep discount for economic gains. To do this, the whole food industry, which is so interconnected today, will have to move in the right direction together.
Abhishek Agarwal, Founder of Pappco Greenware, the largest supplier of compostable packaging in India, as well as One Less Piece of Plastic. Pappco is the largest supplier of compostable packaging in India servicing clients like Starbucks and Inox.
A lot of plastic has been reduced in food packaging by replacing it with recycled paper or foil. This has been adopted even by some smaller restaurants – both driven by restaurants wanting to follow eco-friendly practices and due to the government bans on single-use plastics in certain states. Many restaurants and hotels in the big cities are using bio-degradable or reusable packaging. However, there are still opportunities for much greater adoption of sustainable packaging in India’s Food and Beverages sector.
— Swiggy (@swiggy_in) April 30, 2020
In light of the current COVID crisis and the months that will follow, I do not see being ‘environment-friendly’ as a top priority for the customer. Restaurants, and especially cloud kitchens operators, will try to differentiate themselves based on health, hygiene and safety. These could include anything from how a restaurant handles its raw materials to its kitchen practices and delivery personnel. As for packaging, the most important need, of course, is that the food is sanitized and packaged securely.
Do Restaurants Have Bigger Fish to Fry?
Aggregators have helped increase awareness on safety with the reporting of kitchen staff temperatures, monitoring of rider’s temperatures and contactless delivery during the lockdown. Even the ‘save-cutlery-save-money’ feature that exists right now makes an appeal for conscious consumer behaviour, not restaurant compliance. The ecosystem of aggregators and restaurants will hopefully work towards more sustainable packaging in the near future.
There has been an increase in the concept of ‘farm to fork’ and the usage of organic and hydroponic produce. Customers want to be able to trace where their food is coming from, so restaurants have begun positioning themselves accordingly. There are many restaurants including The Table in Mumbai, Caara Café in Delhi and Toast and Tonic in Bangalore who grow their ingredients on their own/captive farms.
People are willing to pay a premium for natural, fresh ingredients. Restaurants are also sourcing dairy products directly from organic farms. What is needed is a more robust regulation of this type of products to help increase confidence among the retail customers for increased adoption.
The costs of being eco-friendly and ‘sustainable’ can be borne by larger players among hotels and restaurants. ITC Hotels have partnered with the World Wildlife Fund’s ‘Choose Wisely’ program, which focuses on the consumption of fish species which are not endangered, a practice that has gained popularity.
Sustainability or Subjectivity?
A restaurant’s positioning matters when you gauge how sustainable its operations can be. For example, quick-service restaurants will find it difficult to source expensive ingredients as their customer pricing is lower. Casual and fine-dining restaurants may be better positioned to offer more eco-friendly, sustainable experiences that their customers are more willing to pay premiums for.
Fab Cafe is a chain of restaurants that sources all its ingredients from Organic India, which is also owned by Fabindia. An interesting example of how natural, local and authentic food solutions are important.
We thoroughly enjoyed serving our guests at the Vegan Luncheon with @fabcafe in Gurgaon today! From mango cashew tarts to Wildberry Smoothie Bowls with @sofitindia soy milk, fabcafe’s vegan menu has given us new #healthgoals #veganfirst #fabcafe #fabindia #sofit #vegan #veganfood pic.twitter.com/ifLxdKqzc4
— Vegan First (@veganfirstdaily) November 25, 2018
Their ability to convince customers of their food quality has benefited from it being promoted by Fab India, which has developed customers trust over the years. Put simply, the price points for ‘being sustainable’ are not the same for every restaurateur.
Sustainability in the food space should be understood from various aspects: kitchen practices, using environment-friendly material for one’s interiors or energy-saving air conditioning equipment amongst others. Perhaps the best way to look at operations in the F&B sector is with an ethos of ‘little steps’, where every player moves (at their own pace) towards ensuring more environment-friendly processes.
Samir Kuckreja is the Founder & CEO of Tasanaya Hospitality, a boutique consulting company. He has 30 years of experience in the hospitality industry, having worked with leading chains and is a member of the Governing Body of the Tourism and Hospitality Skill Council.