In the last few years, a variety of startups have taken on the issue of food waste, with app Karma being one of the most prominent players in the space. But the closure of restaurants and cafes amid the coronavirus crisis has caused Karma to rapidly change its offering.
Prior to the coronavirus, Karma helped consumers and restaurants in countries including the UK and Sweden fight food waste by enabling companies to sell surplus meals and snacks at a reduced price through its app. Consumers would select the items they wanted in the app, and then go and collect them from the restaurant in question.
But the outbreak of Covid-19 has caused significant temporary problems for that model.
“The Covid-19 outbreak (and subsequent lockdown in most markets) has made our regular Karma user experience temporarily less attractive. Many of our partners, both big and small, have been struggling with their sales due to the decrease in footfall,” says Hjalmar Ståhlberg Nordegren, CEO and co-founder of Karma.
“Some have decided to pause all their activity, which has a direct impact on their business and reduced the inventory of food surplus available through Karma. This means that most food waste during the crisis is happening further up the food chain, for example with wholesalers who usually work to supply the hospitality sector.”
Karma pivots to delivery to combat coronavirus food waste
With over one million regular app users and more than 7,500 partners selling through its app, Karma was faced with coming up with a new approach that was better suited to the post-coronavirus world: delivery.
“As a response, Karma has been working quickly in both Sweden and the UK to adapt our model to accommodate these extraordinary circumstances. We believe that our unique situation gives us the opportunity to support the hospitality sector and take a more proactive approach to reducing food waste,” says Nordegren.
“For the restaurants, cafes and stores that have chosen to stay open during this difficult period, waste is even more of a problem right now as people are staying inside. To combat this, we have built a new delivery system so that we can get this surplus food out to users across both Stockholm and London.
“For our users in lockdown or in self-isolation, this is a way to give them easy access to a variety of restaurant cooked meals as other delivery apps are overwhelmed with demand.”
But that is only the start. In response to the difficulties many consumers are facing in booking grocery deliveries, as well as the growing food waste issue occurring among wholesalers, the company is also launching a fruit and vegetable box dubbed the Karma Box.
“We have also launched a number of other initiatives that we are really excited to get off the ground. In Sweden, we have launched a Karma Box that delivers essential fruit and vegetables to households across Stockholm, amidst the closure of many restaurants,” he says.
“We will be launching this initiative across London within weeks, and we have already had registered interest from over 5,500 potential customers.”
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Inside Karma: The importance of being agile
Such a rapid change of offering is not an easy thing to pull off, but Nordegren says that the company’s values made it well-placed to pivot in the way it has.
“We have always been very flexible and open to change at Karma. It is part of our DNA (our core values are actually User First, Fast Movers and Pioneers),” he says.
“So, in some ways, the challenges have been an amazing reminder for the team that we can actually execute very quickly and launch completely new business avenues in a matter of days.”
That’s not to say there haven’t been issues.
“Of course, every new initiative comes with its own complexities: from product and tech right through to how we share it with our customers. This is especially the case during the current period of remote working, where our teams are not in one place together,” he explains.
“What we will keep with us from this situation is that we should always be agile enough to launch imperfect new features, which can be iterated on fast to respond to the needs of our customers and the environment.”
There has also been a need to ensure the health and safety of Karma staff – both those working remotely and those doing deliveries – during the coronavirus outbreak.
“As a company, we take the health and wellbeing of our team extremely seriously. With that in mind, we have been following government guidelines across our markets to ensure that each member of staff is protected and able to operate safely from home,” says Nordegren.
“Within our product, we have also laid out strict no-contact guidelines for our restaurant partners and delivery operators to ensure that both they and their customers are protected from the potential spread of coronavirus.”
Karma after the coronavirus: Building a remote culture
In order to keep its business running effectively during the coronavirus outbreak, Karma has looked to technologies it was already making use of in its normal operation.
“As a tech company, and one operating in multiple markets, we are comfortable with using remote technologies such as Slack and Google Hangouts to stay in touch with one another,” says Nordegren.
“However, now more than ever this form of communication has become an essential part of Karma – not just in how we operate, but in how we maintain our distinct culture. Our ethos and spirit have always been an essential part of what it means to work at Karma, and we are finding new ways to keep that alive despite being apart.”
But does Nordegren see the changes the company makes now being longer term practices for Karma?
“Absolutely, forcing people into these new conditions (social distancing, working from home and limiting movement) will likely shift behaviour in the market in such a way that we’ll see increased usage of delivery platforms for both ready to eat meals and groceries as well as provide a more remote friendly work-life,” he says.
“What that means to us is that we’ll likely be more flexible with remote working; make sure we follow the macro market trends; are able to adapt how surplus is saved and consumed by offering delivery through third parties and continue to provide the Karma Box filled with surplus delights from across the food value chain and not just from restaurants and grocery stores.”
It has also caused the startup to look more carefully at its measures of long-term success.
“We will also, like most startups, be more aware that growth on its own is just a VC metric and that growth paired with profitability is a much more sustainable way of running a business,” he says.
“This might seem obvious to many, but it’s not how the startup sector has been operating given the ready access to capital and the ease of delaying profitability to ‘someday in the future’.”