Innovation

Food waste is a big issue worldwide, especially in developed countries. It has been said that in Finland only, 120-160 million kilograms of food waste is generated annually, which is about 10-15 percent of all edible food, households being the biggest cause of that (Saasyödä.fi). A fifth of our consumption-based emissions are created in food production and if the food is wasted, the emissions will be created for nothing. Fiksu Ruoka’s innovation fights SDGs number 12 and 15 through this as they make sure that the produced food is consumed instead of simply thrown away.

Regardless of how much food ends up as waste, there are people even in Finland who struggle to afford everyday items and fiksuruoka.fi makes them affordable to everyone through their cheap prices. If the developed countries learned to resell their food waste more, there would be less need for production and in the long run that would help developing countries too which export a great deal of their limited agricultural products. This would reduce hunger globally (SDG 2) and also boost economic growth (SDG 8), especially in third world countries.

It is valuable even in Finland to reduce hunger and the high demand for baby foods, for example, on the Fiksu Ruoka website indicates that even families struggle with the high food prices here. In that sense, it is very wasteful to throw food away and potentially Fiksu Ruoka’s innovation can have a massive impact domestically.

Inspiration

The founder of Fiksu Ruoka, Richard Lindroos discovered the business opportunity when he had been working in logistics of several large companies. Lindroos realized that regardless of the industry, surplus of products occur in every part of the supply chain. The key issue was that, “In every part of the supply chain you have to make sure that you have products to sell: there have to be products on the shelves of stores, shelves of the logistic center and the same thing on the importers and producers warehouses.” (Järvensivu, interview). Seeing this kind of overstock leading to wastage of products at all stages of the supply chain inspired Lindroos to tackle the issue.

The problem is emphasized in the food industry because “the volumes of surplus batches are much bigger than in other types of industries” (Korpela, interview). “The biggest reason for the surplus of products is the expiration days for food” (Järvensivu, interview).

After doing some research, Lindroos realized that only a few companies in other countries have created a concept to solve this problem of overstock. That is how Lindroos came up with the idea of connecting the demand and supply for the surplus products and this way reducing the amount of food otherwise ending up as waste.

Overall impact

As Fiksu Ruoka was only founded in 2016, it is too early to talk about long-term effects yet but forecasts can be made to a certain extent. As the innovation is replicable and Fiksu Ruoka was the first one to do it on a large scale at least, it could be argued that the idea of a food waste reducing service will only grow in the future. As their analytics improve, so will the efficiency of preventing food waste generation. Because of Fiksu Ruoka’s innovation more companies might take action to reduce waste by reselling products and also more consumers might be encouraged to buy these surplus goods. This argument is backed up by the fact that Fiksu Ruoka doubled and then tripled its profit in a fairly short period of time, and the quick creation of the whole market shows how much growth potential there is.

Although it could be argued that the reselling of surplus goods has so far created short-term benefits, it also helps the suppliers, importers and wholesalers in long-term because they have to worry less about buying or producing a surplus as they know that the surplus goods can be bought by Fiksu Ruoka. In the long run their costs may also decrease regarding the waste disposal. So far, Fiksu Ruoka has reduced 300,000 kilograms of food waste so there is no doubt that this hasn’t had an impact on all parties included.

Business benefit

As Fiksu Ruoka has grown, they have been able to hire more people which obviously improves the operations. The CEO, Juhani Järvensivu mentioned that the people are the best part of the business and that he has been very fortunate to be able to work with and hire young professionals who are at the same time his best friends. As new people have come along the service has become better and although Järvensivu is very knowledgeable himself, he admitted that having an E-Commerce expert on the team is crucial for this innovation to work and that has created a lot of value for the firm.

Since Fiksu Ruoka is a fairly new business we can’t really talk about employee retention yet but it became clear during the interview that all the employees were really committed, and not just in the business but also to the cause of reducing food waste in Finland. In the future they are interested in expanding to other goods beyond dry foods but selling perishable goods obviously requires changes to be made in the supply chains which will consequently raise costs. The details of future moves weren’t discussed but it was clear that the company has a lot of plans and with their retained expertise ‘’only sky's the limit’’ (Korpela, interview).

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Social and environmental benefit

Fiksu Ruoka’s innovation benefits society by helping suppliers to manage their supply chains in a more sustainable way. Fiksu Ruoka buys large batches of products that the suppliers have not or will not for one reason or another (expiration/sell-by day, changed packaging etc.) be able to sell their products as planned. This reduces the losses for suppliers and helps them in managing their waste handling processes.

The benefit for the customers of Fiksu Ruoka is to be able to purchase good quality products at a discounted price (up to 90% off) and have them delivered home. As they deliver all around Finland, the service doesn’t only benefit local customers. Through this innovation, people are able to make more sustainable consumption decisions and enjoy the simultaneous benefit of financial savings and environmental protection.

Finally, the biggest impact of the innovation is on the environment, as it tackles the issue of food waste, which contributes by 8 percent for the total GHG emissions globally. Rotting food waste in landfills releases strong greenhouse gas, methane, which is 28 times stronger than Carbon Dioxide, promoting global warming (United States Environmental Protection Agency 2017). By aiming to prevent the generation of food waste, the innovation is tackling climate change. The products that are bought by Fiksu Ruoka would -for the most part - have gone to waste, but thanks to Fiksu Ruoka’s innovation, the waste that was generated through their operations represented less than a pallet last year.

Interviews

Juhani Järvensivu, CEO

Niko Korpela, CPO