Inside Too Good To Go: 4 Million Parcels, Zero Forecast – And Why It Works #LTM163

To have the same goal or the same purpose like we have now.

I think this is the key success factor for scaling a business, and in our case, also scaling a business with a real purpose, an amazing purpose.

Let's Talk Marketplace.

The Marketplace podcast with Ingrid Lohmer and Van Rietichtun.

Hello and welcome back to let's Talk Marketplace.

I'm Ingrid, your host.

As always, great to have you back.

Just me behind the mic today because Valerie fell sick and lost her voice, which is not a very good setup for a podcast.

So it's just me, but I brought two guests and one really interesting story with me to make up for it.

Because today we are talking about a very interesting and also very special case of Marketplace logistics.

Normally, as you all know, logistics sort of run on forecasts.

You know, roughly what's coming in, when and how much and where it needs to go.

And everything between is logistics.

Complicated, but mostly, at least predictable.

But today we're talking about a marketplace which ships products which are not predictable because they only exist when there is a surplus.

And that surplus, in its nature, is unpredictable.

So that's the business model behind Too Good To Go, a company dedicated to decreasing food waste.

With me are two people who are making this very unpredictable and highly complicated marketplace story work.

So I'm really curious to hear your story.

And with me, Katharina Hauke, who runs Too Good To Go in Germany, and Stefan Buhler, who runs the German business at Spring dds, the logistics partner behind all that story.

So great to have you two.

Welcome, Katharina.

And welcome, Stefan.

Thanks for inviting us.

Thanks for having us.

Yeah, it's great to have you.

So maybe I did a little introduction into all that story, but a very good one.

I better give the mic to the two of you.

Katharina, ladies first.

How did you get here?

Why are you at the head of to go2go?

And what's your mission there at the moment?

The mission, our vision at To Go2Go is to inspire and to empower people with our app on their smartphone to avoid waste.

And our vision is a planet where we all use what has already been produced and is there.

So this is why I'm here.

This is my why and where I'm coming from.

I'm usually originally born in Vienna, moved to Berlin 17 years ago for love, not for business.

But since then I'm in E commerce.

I worked for Imuscaut in sales, Liverando in sales, and was the country director the last four years there.

And since a little bit more than one and a half years now I am managing director and I'm proud to bring to good to go into the.

Next level, which is a really interesting story.

Stefan, tell us a bit about yourself and about Spring GDS and what you do in a short version because we're going to talk about that later on in longer fir terms for to good.

To go in a short version.

So I spent over 20 years in the freight forwarding industry, so moving big boxes via ocean or air freight.

And yeah last year joined Spring Global Delivery Solutions in Germany as a managing director to help them to accelerate the business model that we have that is at the moment fulfillment.

Absolutely integrated with last mile parcel delivery across the globe with a strong focus on, on Europe.

And you know, when I, when I joined the company and, and it was all about parcels and ui, I thought, you know, it's, it reminds me at something, you know.

And then I realized I had an internship back during my university time at Euro Express in Switzerland which was then merged together with.

With DHL under the Deutsche Post umbrella.

So I do have my roots actually in parcel and now it's a, you know.

Yeah.

Reuniting again in that sense.

Okay, right.

And maybe on a personal note, Katharina, what do you think do you do best in E commerce?

What's your personal USP that you bring to the table?

My experience over the last 17 years is I think big whilst keeping it simple and that is one of our company values now also at Do Good to Go, my second last one and then I bring people together and form high performing teams and this is my loved most loved value at to Good to Go.

We win together.

And this is also when it comes to partnerships like with Stefan and Spring gds, it's very important to have a great team around you.

So I think this is where I have a sense for find, finding great people to work with.

That's a very nice sense to have in, in the managership, I think.

Okay.

Stefan, your usp.

I think you know, my, my personal, my personal USP is, you know, focus.

Applying focus to organizations and, and helping people, you know, to strive for the goals, you know, that are set for the companies and especially around growing businesses, you know, growing businesses in the field of supply chain logistics.

That's, that's why I also have the most, the most fun.

Okay.

Right.

Okay.

Then I guess let's start talking about Good to Go.

Maybe Katrina, we first have to explain a little bit what that marketplace is.

I have it on my smartphone, it's an app.

So sometimes I do Use it.

But it is a concept that might not be known to everyone.

So can you just quickly explain how that works for someone like me who is using the app, but also for restaurants or retailers that are working with your marketplace?

Yes.

So you still find parcels solutions in our app.

It's on the bottom as Lieverung in your German app.

And to make it short, Parcels offers us the possibility to tackle food waste at a different point in the supply chain compared to the surprise bags you get from the store directly.

And many consumers are not even aware of the fact that in Germany More than 2 million tons of food are wasted every year whilst still in production.

So just parcels business.

What we are talking about now, why this has several reasons.

Sometimes labels are printed incorrectly or there are changes to the packaging design.

Marketing had an idea of something different.

Or there's surplus also of seasonal products when it comes to Easter or Christmas.

And regularly our food brands and retailers face the problem that they are not able to sell still perfectly good food through their usual channels.

And that's where we come in.

So our parcel solutions offers retailers the chance to pass on this food rather than throwing it away.

And our 19 million users in Germany can buy it at heavily discounted price by up to 60% and get it delivered to their place.

So shipped.

It's a simple solution that helps save good from the bin while saving money.

And logistics wise, it led us to the successful partnership with Spring, TDS and Stefan on his side.

Maybe I need an example of.

Let's do this a bit more in concrete detail.

If a supplier or retailer, what is a typical example of how that happens?

A retailer is producing has some surplus, how does that evolve?

What does it do with it?

How fast is it listed on your platform?

Just give me an example.

So on the one hand, we are constantly on the lookout for new companies and brands we can partner with.

At the same time, we are increasingly seeing companies contacting us to work with us.

We work with a wide range of partners from some of the world's biggest brands.

As an example, it's Coca Cola, Nestle Mass and Lindt Chocolate.

Or some smaller brands, especially with more healthy and vegan options.

And also to give an example here, it's Bears with Benefits or Katya's Oatly and Yogi Tea.

And most of our partners deliver their products directly to the warehouse in Schifferstadt when needed.

We also organize pickups ourselves.

And once the good arrives or arrive, Spring takes over the inbound process while our logistics team coordinates the overall flow and makes sure.

Everything runs smoothly from arrival onwards.

Okay, that sounds like quite the challenge for logistics service provider like spring.

Stefan, can you lead us through how is that working for your side?

I mean, you're building all the infrastructure that Katharina Hunting needs.

How is that different from building for any other customer?

So it is in some areas it's not any different, but there are areas where it's significantly different.

And especially on the inbound side, as we just heard from Katarina, you know, too good to go is so to say ordering or receiving the confirmation from those suppliers.

There's cargo coming or there's products coming, but we don't know until the moment it hits the warehouse.

We don't know what is coming in.

So sometimes it's four pallets, sometimes it's one pallet of a product and we only know when we receive it.

And that's also the moment where we take it into our warehouse management system.

And then, and that's the interesting part now then we are starting the dialogue with to good to go and confirm to them and they have data is a key part in that we have same visibility about the intake, stock intake and then they have the visibility what actually came in.

We then together decide how do we define the output.

So when we have products on stock, then the configuration of a parcel is discussed.

You know, is it a drink together with, you know, some, some sweets or is it noodle soups or what?

How is the kitting done for parcel?

And, and that's what we discussed together.

And then we can do a production, planning, the kitting process and when that is done, then you know, we put the parcel into storage again and then the moment comes when it goes live on the app and then you as a consumer, you can order it and then we pick from the shelf and that's in some areas similar like we do for other customers, but in a few areas, especially on the, on the receiving side, it is, it is completely different.

That's what it sounds like actually.

How fast is that process?

So let's say you get, I don't know, a call, an email from.

To go to go.

We've got a new supplier coming in and there is XYZ number of parcels coming along.

How fast are you in processing that?

As fast as we have to be.

We have no.

I mean that's.

It sounds, it sounds easy, but what is happening in the background?

We have kind of a base volume that we are, that we are considering in our forecasting and then we can adjust, you know, with applying additional shifts with running different models in our production, we then can adjust according to the volume that is actually needed.

Okay, I have to hand that back to Katharina.

How do you plan that on your side?

I mean, you.

Stefan just said you have rough forecasts.

How do you do a rough forecast for that kind of product?

And how do you then plan the whole warehouse process around that?

Absolutely.

And with surplus, you don't even know it's coming or not.

So this is also a lot of planning on our side and our team and then positions, our partner trade specialists and partner managers.

They work together very closely on a weekly basis.

Also to ensure we have enough variety and interesting stock for our customers is also important.

It's always consumer first on the marketplace business.

That's what I learned in the last 17 years.

So important, what does consumer want?

Also so that we get that surplus from our partners.

As soon as we know how many pellets are expected, then we create this weekly production plan and can start planning the parcels.

And like Stefan said, sometimes it's a topic.

It's barbecue season and we put drink, snacks and sauces in there.

And sometimes we also know what comes even before the stock has even arrived.

It depends.

So we have to be very agile, communicate a lot, work together closely a lot.

And like I said, warehouse receives and takes over, sorts and packs according to the plan.

And like I said in our meeting last time, the turnaround can be extremely fast.

If you're standing in front of those parcels in 10,000 square meters, it's really, it's making me goosebumps how fast these parcels can be produced and put on sale sometimes on the same day.

So Stefan is right.

They are extremely fast as they have to be.

And then they are picked in our last mile.

Carriers pick them up the following morning so we can be super fast.

Mm, that's really amazing.

Stefan, let's talk about prices here because, I mean, this is a very, very special operation.

As you say, you have to be as fast as you can.

You have to be extremely agile.

Agility now is something that you don't often hear in the top 10 list of things that logistic partners need to be.

Sorry to say that, but, you know, it's normally a very predictable business.

So how do you even, I don't know, price or structure a logistics deal with a customer?

Like, so we for sure have to have standardization to have the economies of scale.

Right?

Because that's the moment efficiency is driving your margin and we need to have the standardization so we have standardized processes underlying.

And then on top of it, we built the flexibility.

So the charging model also for us is that we have the base operation a minimum volume, you know, that's what we have covered.

And then the rest we can get in a, in a quite flexible setup, accommodated as it's required.

Okay, wow.

Is there anything in how you built the logistics center that you use for to get two go that was very specifically shaped by their need?

I mean, we try to build a very responsive element of the supply chain in that regards.

And you know, the normal things like the cutoff times, you know, for the last wire carriers, etc.

That's all accommodated to the requirements of the, of the to go to go order process.

And then we have, I would say the core part of the collaboration that we have is the data.

You know, the data allows both sides, you know, to understand what is on stock, what can be configured for the, for the kitting process for a parcel.

And that's, that's to, to a certain element, you know, within the four walls, what we have decided and, and designed and on top of it, what is this?

And we maybe come to the point a little bit later because there's on this whole business, there's, there's a cherry on the ice cream and Katarina maybe can talk a little bit more about the social aspect of that.

We have also, besides everything else, we have a special process for the returns because usually what you do for the returns, you either scrap it or you give it to, you sell it to secondary market or you put it to stock again.

But here we have a separate process for, for the returns that we handle.

And it's a full circle that we are basically running to avoid food waste.

And that's what makes this business purpose driven and very, very special.

Also for us, you know, that are handling a lot of parcels every day.

It is something that you don't have every day.

And fighting against food waste with such simple process steps, you know that that's the best thing that you can do.

And that's where we all have a lot of fun with.

And I witnessed that in the warehouse in Szewferstadt when I visited the team.

More than 70 people working there, you can feel that they love the purpose they are working for in that environment, doing good for the planet.

This is definitely something special to some other companies I have already worked for.

Yeah, it sounds like you also need that kind of energy in a partner, don't you?

I mean someone who really understands what you're doing and why you're doing it.

And that it needs a bit more maybe.

Yeah, engagement and things as, I don't know, parceling some shoes or something like that.

Let's talk about an aspect we haven't touched upon before, Katharina.

Because you are not only dealing with products you don't really know the quantity of because it's a surplus topic, but also products that have a shelf life because it's mostly food.

Is it?

So they run out after a specific part of time and then they are not usable for you anymore.

So how does that work for your company?

How do you deal with shelf life anyway?

And how does that change the way you run your operation?

You're absolutely right.

Shelf life is one of the highest operational constraints we face.

So the best before date and to make it short, bbds, when I talk about it again, the bbds are extremely important throughout our entire process.

It starts when we negotiate the purchase of surplus.

So taking the remaining shelf life into account.

And once we purchase the goods, it's very important for our teams to closely monitor the BBDs of all inventory and prioritize products with shorter shelf life for the following weeks production.

And we also make sure that the BBD and the product information are accurately communicated to the consumer.

Again, they have to know when BBD is.

While on Stefan's side, the logistics team ensures that the warehouse follows the first in, first out principle so that the older stock is always prioritized.

So this is Stefan's team's task.

And then like Stefan said, we also have specific limits for how long different food categories drinks can be sold before the bbd.

And despite this, sometimes we cannot always sell everything in time.

And in those cases we make sure remaining food is donated rather than wasted.

So the full circle and currently surplus from the warehouse in Schifferstadt that we weren't able to sell or that are returned for whatever reasons are being donated to the local food sharing.

And I think it's already three times a week and together we are very proud of that because you can definitely see we bring it to the very end of avoiding food waste.

Stefan, there's not many logistics service providers who offer to process orders that have a BBD because it's so complicated.

So maybe can you run us through from your logistics point of view, the challenges of products like that Katerina just touched upon is this first in, first out process.

What does that mean when it comes to picking a packing?

So for us, I mean, most important is that we are.

I mean we are.

Now my tongue breaker is coming.

We are HACCP certified To be allowed, to be allowed to handle.

To handle the food in the warehouse.

We also bio certified because there are bio products also coming in.

So that's the first standard that we need to meet before the product is entering the warehouse.

And then it's a system feature, you know, that we capture the best with the bbd, the best before date.

And then based on the, on the, on the date itself, we can then in the dialogue with.

To go.

To go discuss what is processed first and what is then processed afterwards.

Okay.

Right.

Wow, that's quite the operation.

Katharine.

We haven't talked about that before, but as Stefan mentioned, returns.

I'd like to touch upon that because when I was researching for this podcast, I hadn't even considered that you would accept returns because of, you know, shelf life, BPDs.

How are return rates in your line of business?

Rather low.

So to give you some numbers, over the last two and a half years, when we launched, since we launched parcels in Germany and Austria, we have saved more than 2.5 million parcels in both countries.

So this is our collaboration in numbers and returns.

What we have donated so far comes up to round about 10,000.

Stefan, correct me if I'm wrong because it's a fast growing number on a daily basis, but when I last met you, it was 6,000 parcels.

Now it might be 10,000.

Give it a little bit more.

So we are already really good in bringing the parcels to the consumers in their home and not getting returns for a wrong address or sometimes a parcel is broken.

It happens very rarely.

But still, if you stand next to this palette in Schifferstadt Warehouse, it's quite huge, this palette, and it does something at least to my heart.

And I saw it also in the heart of the other team members if you hand over those parcels to Food.

Sharing Team in Jefferson and the smile you create, you know, the people's face when they pick up the goods where they normally would have to fight for.

I mean that's.

And they bring it then to Tafel in the region or to the mission on the central train station, or just to neighbors and people who need it.

So this is definitely something I love about our collaboration, that we bring this to the final.

To avoid food waste.

Yeah.

To further avoid food waste here, even in the last stages of the process.

Yeah.

We have been talking about mostly your package business now, which is rather new, as you explained, Katarina.

But in general, two Good to Go started out as a platform where restaurants and supermarkets could just, you know, post whatever they had on surplus and then consumers like me could just walk by and pick it up.

So that is the core business basically.

And what you're now doing is the add on.

So where are you going with this?

Is, do you see that the, this part of the business that we now have been talking about is the one that will bring too good to go more growth or is the pickup still the core side of the business and the other is more of a side channel?

I also give you some numbers for comparison.

We are in Germany now since nearly 10 years.

In that 10 years, we have now 26,000 partners on our app.

So restaurants, hotels, supermarkets, gas stations, hardware stores.

And we just celebrated this morning in our Monday weekly check in, we hit the milestone number.

My summer challenge I called out of 90 million surprise bags saved in that 10 years.

So I have congratulated the team.

This is our core business, of course.

And my next challenge is the Autumn challenge.

So 100 million surprise bags saved until the end of the year.

Yeah.

And getting back to the thinking big thing.

Yeah, yeah, yeah.

Celebrating next year 10 year anniversary.

You see, I'm a visionary person and this is what we have achieved in that area in 10 years with parcels now, like I said in Germany and Austria, two and a half million parcels so far.

And I know from Stefan that the capacity in Schifferstadt allows for 4 million parcels a year so far.

Still some room.

We are still a long way from reaching the end of our journey with this solution right now.

What would you say, Stefan?

Oh, absolutely.

I mean there's, there's room to grow and there's, there's, I would say, you know, we saw, we saw food prices rising in the last couple of years significantly up to 30%.

A lot of more people compared to the past, you know, get in trouble, you know, buying, buying food on a, on a regular basis.

And I think it's a fantastic way of making excess to food on a lower price tag.

And therefore, I mean, we are ready, we have the space, as I explained before, we can scale operations.

So, you know, let's do it.

So let those numbers go out to everyone who says that social enterprises are not really able to scale anywhere.

I guess so that's proving all of them wrong.

If, and I think this is what we established in this episode, if all the processes behind it are really working well, is that sort of the key to having a scaling social business?

Trina?

Yes.

So, and maybe also like in the beginning when we started, you asked me what I'm good at or what my skills are.

Is this thinking big?

So we have a dream and Stefan and I, we have now the 4 million parcels in our head, but we definitely, besides that, think of maybe 10, because the sky's the limit.

And to keep it simple, it's definitely in every company or in every scaling company, processes are generated and then you have to cut down or to reshape processes to make them simple.

And then it's all about communication, communication and working together to have the same goal or the same purpose like we have now.

I think this is the key success factor for scaling a business and in our case, also scaling a business with a real purpose, an amazing purpose.

Stefan, would you agree?

Yeah, I would agree.

And add on top of that, you know, I mean, simplicity and reducing complexities for sure, a key driver and, you know, too good to go, doesn't have, you know, a thousand SKUs.

So it's also something, you know, where do you focus on, you know, do you.

Do you need to have the whole portfolio of a supermarket or do you pick, you know, a few products and you say, I'm, I'm happy with 100 or 200 SKUs, I reduce some complexity at the same time for me and my service provider.

And then you can, you know, throughout the standardized process, as I explained before, that's where you then can scale because the market is the market, right?

If your platform, you know, it's.

You provide it to everybody, you know, in that.

In that German market or European market, and then everybody actually can buy something.

Internationalization is on the card as well.

Katarina, for you there as a global social impact company since the beginning.

So we are in 20 countries already, as you said, founded in Denmark 10 years ago, a little bit more than 10 years ago.

Now we're in the States, Canada, New Zealand, Australia, and our newest country in the club or the community is Japan.

So there is also here always a next step possible.

So 20 we are already, I'm focusing on Germany and to scale that up to double or triple the size of our partners and also 19 million consumers is really good.

I'm proud of everyone in this community.

But you know that we have at least 70, 72 million addressable population for this marketplace on a smartphone in Germany.

So think big again.

Absolutely right.

The two of you, that was a very interesting story and a very interesting look into how to make this kind of very special business work with the right partner in the back and also the right and good processes for that.

So thank you very much to both of you.

Thank you, Ingrid and thank you, Stefan.

Thanks a lot.

Thanks both Bye.

Bye.

And I hope all of you had just as much fun listening to this today as I had recording it.

If you enjoyed the episode, please follow and subscribe to let's Talk Marketplace.

And yeah, let's hear from your side what you thought about this.

I would be happy to hear that.

Okay.

So thank you very much and see you next week.

Bye.

Bye.

You listened to let's Talk Market, the Marketplace podcast with Ingrid Lommer and Vanahy Dichtel.