How the world eats has changed dramatically in the last few years, according to a McKinsey & Company report last September. In the U.S., the food-delivery market doubled during the COVID-19 pandemic, and it’s now a global market that’s worth more than $150 billion a year.
The rapid rise of people relying on food delivery in their everyday lives is a trend that’s not changing anytime soon. A majority of consumers (71 percent) said they will continue ordering food for delivery as much as or even more than they had during the pandemic, per a recent JD Power survey.
Yet, with the use of food-delivery services skyrocketing for families and businesses, the combination of single-use packaging that’s not eco-friendly and the use of fossil-fuel vehicles to transport this food on-demand is having a detrimental impact on our planet’s environment.
“Our planet is choking on plastic,” according to a recent interactive report published by the United Nations Environment Programme (UNEP), a leading global environment authority. “Around the world, one million plastic bottles are purchased every minute, while up to five trillion plastic bags are used worldwide every year. In total, half of all plastic produced is designed for single-use purposes – used just once and then thrown away,” per UNEP.
Common packaging materials like single-use plastics don’t biodegrade or can take up to 500 years to decompose in the case of Styrofoam. Additionally, with 98 percent of single-use plastic products being produced from fossil fuel, the level of greenhouse emissions associated with their manufacturing, use, and disposal is forecast to grow to 19 percent of the total global carbon budget by 2040, according to UNEP.
The bright side of what sounds like a potential “doomsday” scenario is a generational tide change of younger people who demand more ethical consumerism and choose their brands based on companies’ environmental, sustainability, and governance practices. This trend is especially true for Generation Hashtag, a demographic of people born between 1991 and 2005 covering younger members of the Millennial group and older members of Generation Z.
To address the rise of ethical consumerism concerns, a growing number of innovative startups and global brands are focusing on inventing new ways to address how we live, work, and eat today, while ensuring a healthier, more sustainable planet for all of us in the long term. One such company is Brazilian foodtech giant iFood, which is the largest online food-delivery company in Latin America, serving more than 1,000 cities in the region’s biggest economy.
Last year, iFood announced a multi-pronged effort to be carbon neutral and plastic-free across its massive delivery operations by 2025, vowing to “spend as much as necessary” to achieve the goal. As part of its iFood Regenera commitment, iFood has just announced a partnership with XPRIZE to co-fundraise a $20 million global competition (XPRIZE Circular Food Packaging) focused on the research and development of flexible, biodegradable packaging.
iFood has also launched a new electric motorcycle, in partnership with Brazilian EV maker Voltz, for its huge network of delivery partners in Brazil with plans to have 10,000 of the new e-motorcycles in operation by the end of next year, beginning with São Paulo, the largest city in the Americas.Grit Daily recently sat down with Alexandre Lima, iFood’s sustainability manager, to discuss the foodtech giant’s progress towards its goals of being carbon neutral and plastic-free by 2025, the latest news announcements, and what’s next:
Grit Daily: What persuaded iFood to make such a large investment in e-motorcycles? Was it consumer demand, regulatory pressure, or some other factor?
Alexandre Lima: Our decision to invest in e-motorcycles and other clean modes of transportation arose out of a need to develop cleaner, more sustainable operations, and because initiatives like this help to achieve the goals of our public environmental commitment. These initiatives are based on thinking about advantages for the delivery partners, and how we can improve both the environment and society with a more sustainable model.
At iFood, we believe that partnerships between companies advance the process of evolution and are absolutely necessary to promote a positive impact on the environment and combat climate change. The kind of partnerships we have forged with Brazilian EV manufacturer VOLTZ and BV Bank for our expanding fleet of electric motorcycles, or with Tembici, one of Brazil’s micromobility leaders, via our iFood Pedal program that provides our couriers with affordable bicycles and e-bikes across some of Brazil’s largest cities, makes it possible to make the necessary changes to create a better society for all of us.
GD: 10,000 e-motorcycles sounds like a very large number. Do you anticipate this will do much to help the manufacturer to scale and make e-motorcycles more generally available?
AL: We know that a true transformation towards cleaner deliveries needs to happen in a scalable way. These first 10,000 electric motorcycles are part of a plan to expand e-motorcycles’ production by VOLTZ, and we’re confident there will be interest from couriers in purchasing them. VOLTZ recently announced its factory in Brazil and began production in June. The new factory will soon have a production capacity of up to 15,000 new units per month.
GD: In the U.S., the people who deliver food for restaurants are not well paid. How are you making these affordable e-motorcycles for your delivery people in Brazil?
AL: Our negotiations with partner companies will be very beneficial for delivery people who join the electric mode of transportation. Many months were spent with VOLTZ to achieve a cost for the new electric motorcycles that is far below the market. Starting this month, we can offer delivery partners state-of-the-art electric motorcycles for less than R$10,000 (about US$2,100). On top of that, we have created a special partnership with the BV Bank to access a line of financing and discounts for our delivery partners.
Based on an initial pilot with 30 of iFood’s delivery people, there are significant benefits for fuel and maintenance costs for those using the new electric motorcycles. For example, a delivery person who travels 3,000 km per month has a monthly cost of around R$610 of fuel, considering that one liter of gas costs about R$7.10. With the new e-motorcycle, this cost becomes a fixed amount, due to the battery-swap system developed in this project, generating savings of more than 60 percent for the delivery person in fuel alone. And the monthly maintenance costs for those using new e-motorcycles dropped, on average, by 70 percent.
GD: Electrifying your delivery fleet is a big part, but still just part of your larger sustainability program. Please tell us about your efforts to reduce plastic waste.
AL: iFood’s commitment to combat plastic pollution is focused on reducing the circulation of single-use plastics such as cutlery and straws, replacing plastic packaging with other more sustainable materials, and recycling the plastic volume that will still circulate in delivery for now.
For more than a year, we’ve offered our iFood app customers the option of not sending cutlery, cups, straws, and other plastic items through restaurants. Those opting in for the eco-friendlier option was significant with 82 percent of people responding that they preferred not to receive plastic cutlery and straws. Based on this, we estimate that more than one ton of plastic has stopped circulating in our delivery each day by adding this option for consumers on the app. In total, the circulation of more than 463 tons of plastics has been avoided so far.
Currently, our greatest challenge is to focus on the production, innovation and scale of packaging using more sustainable materials, such as paper, manioca or corn.
GD: We understand that iFood is developing a recycling facility in Sao Paulo. What are the economics of that? Are you working with partners? It sounds like a lot for one company to take on.
We are currently evaluating how iFood will invest in this large recycling center in São Paulo. This space already exists, with support from the city of São Paulo, but iFood has not yet decided on this investment.
On the other hand, in recent months, we have already recycled more than 2,000 tons of waste, through more than 70 voluntary delivery points. We’re also carrying out projects in peripheral regions of São Paulo to support cooperatives and we even work to recycle packaging on the edge of Rio’s beach.
GD: iFood recently teamed up with XPRIZE to develop an alternative to petroleum for the manufacture of plastic packaging. What more can you tell us about that?
AL: iFood is teaming up with XPRIZE, a global entity that creates positive impact solutions, to raise US$20 million (more than R$100 million) with the aim of launching a competition between companies and universities for the development of packaging sustainable. The competition will focus on research and development, and favor large-scale sustainable proposals to create packaging that is both safe for human consumption and the environment.