The take-away of the business of takeaway: sustainability is a key ingredient in Deliveroo’s strategy

Quick background on Deliveroo…

Deliveroo is a quintessential start-up success story. Founded in London back in 2013, the company offers fast and reliable food delivery which customers can track on their phones. Globally, Deliveroo’s operations span 14 markets and 500 towns and cities with a fleet of 60,000 riders.

Deliveroo believes that great food shouldn’t come at a cost to our planet. But, given the scale of the company’s operations, they continue to be confronted with the challenge of managing sustainability across a complex network of restaurants, riders and customers.

Why this is SO EXCITING…

It’s likely you have the app downloaded on your phone – and we’re also willing to bet there’s a good chance you’ve ordered food using said app in the last week…

Given their multi-stakeholder reach (consumers, restaurants, riders), Deliveroo’s work to “embed sustainability” into all aspects of their business model integrates these benefits into our daily routines, as well as shape the behaviour of the hundreds of thousands of restaurants and drivers on their platform.

Meet Vardhan…

Official title: Business Strategy Manager and Global Sustainability Committee Founding Member at Deliveroo.
Vardhan works cross-functionally across internal and external stakeholders to lead the development of Deliveroo Singapore’s overall strategy.

Notably, he is the founding member of the Global Sustainability Committee started in June 2018 – and as part of the Global Sustainability Committee, Vardhan leads projects centring around:

  • Ethical Eating: Promoting sustainable diets on the platform
  • Reducing Plastic: Assessing ways to reduce single-use plastic waste
  • Minimizing Food Waste: Analyzing ways to reduce food waste
  • Reducing Carbon Emissions: Developing e-vehicle solutions to prevent transport emissions.

Oh, and he also successfully led an initiative to remove shark-fin soup from the Deliveroo platform globally.

On the Market Opportunity…

Needless to say, the Deliveroo business model has proven to be successful in cities around the world – and it is part of a larger trend of platforms (think, Uber) that have shown spectacular growth in recent years. Big players like Amazon have taken interest in the food delivery app, as evidenced by the tech giant’s investment in Deliveroo’s last meaty funding round of $575 million.

But for all that food companies like Deliveroo have done in terms of making people’s lives easier by introducing them to more diverse foods and allowing small business owners to reach a larger public, their operations have produced their fair share of externalities.

Increased use of packaging materials, food waste (as a result of over ordering) and millions of fossil-fuel powered miles by delivery drivers all produce negative environmental impact Vardhan and the team must confront.

And out of this challenge, Vardhan and the team are making lemonade (figuratively, so to speak): tackling this sustainability issue head-on by turning it into a competitive advantage.

“We aspire to make sustainability a competitive advantage. It’s something that can differentiate us from our competition. It’s part of our value proposition to customers and we’re aiming to bake it into the business model. ”

On SDGs and sustainability across the entire supply chain

During the last years, Deliveroo has launched several initiatives to minimize the impact of its operations across the food delivery value chain:

Sourcing:

In November of 2018, Deliveroo committed to removing all shark fin dishes from its platform (I.e. putting pressure on restaurants to eliminate these dishes from their menus). As a result, 150 shark fin dishes from 34 restaurants were removed from the app in Singapore.
Beyond taking shark fin and any related shark fin products out of its physical and digital menus, Deliveroo could gradually shape the menus of restaurants towards more sustainable offerings (powered by more sustainable ingredients).

Packaging:

Deliveroo became the first food delivery company that introduced an ‘opt-in for cutlery’ feature in Singapore. From its introduction in June 2018, this “small” nudge has already reduced plastic waste by 65% and brought economic advantages to the partner restaurants.

Deliveroo also promotes the use of biodegradable straws and eco-friendly packaging by providing free samples of these products to the restaurants on their platform and making them available on their online store (restaurants can buy eco-packaging on the Deliveroo Packaging Store at competitive prices, having more access to biodegradable, compostable and recyclable packaging).

Distribution:

Logistics optimization is at the heart of what Deliveroo does: the app uses an algorithm to ensure efficient deliveries, cutting down on carbon emissions from transport.

Consumption:

The company promotes sustainable eating by running ongoing promotions for restaurants with “green” menus. From May 21 of 2019 onwards, Deliveroo is partnering exclusively with Impossible Foods to offer dishes and meals made from its plant-based products.

Recycling:

To help restaurant partners reduce their use of takeaway packaging, Deliveroo has partnered with RETURNR in Australia, introducing the option to order food in reusable containers. RETURNR is an environmental initiative that replaces single use takeaway packaging with equivalent reusable solutions, giving customers the opportunity to have their dish delivered in a reusable bowl. Customers can return the bowl to any RETURNR supported restaurant to get their $6 back.

What’s next?

Deliveroo is working with the WWF as a founding signatory of their Plastic ACTion program, a voluntary business initiative to eliminate plastic pollution in nature. This will see them working alongside WWF and other industry leaders to develop solutions to facilitate restaurants transitions away towards more eco-friendly packaging.

Another possible measure to reduce Deliveroo’s environmental impact is to incentivize drivers to choose a more sustainable transportation method. In the UK, Deliveroo is already running a pilot in which riders can rent an e-bike or e-scooter at a reduced rate to replace their motorbike, for example if they’re not able (or willing) to purchase the vehicle upfront.

In smaller cities with suitable climates, Deliveroo could consider extending these pilots to normal bikes as well.

Our big “takeaways” 😉

  1. Sustainability is a competitive advantage Deliveroo is aiming to build out. Championing sustainable practices is one-way Deliveroo can stand out and appeal to its stakeholders (customers, restaurants, employees, investors) in a crowded marketplace.
  2. Deliveroo is indirectly present in every step of the value chain, and so they can leverage this influence and scale to shape stakeholder behaviour (consumer eating and ordering, restaurant sourcing, driver routes etc.)
  3. Though Deliveroo didn’t start out with a sustainable mission… they have been able to thoughtfully start integrating – or “embedding” – it across their business model.

In case you are fascinated by these topics:

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