Karma is a tech startup that was created in Stockholm, Sweden in 2016. The company has rapidly expanded to 225 cities with the support of 9200 resellers and 1,400,000 users. The Karma app primarily connects restaurants with surplus food to customers who love a good deal. One-third of all food in the world gets wasted annually, and Karma is creatively offsetting this $1.2 trillion problem. President Obama has endorsed the company by announcing that they are “creating the first zero food waste generation.”
St. John's University
Karma’s innovation stems from its vision of effortless sustainability. The company website proudly claims that “Slackers will save the world.” Charlotte Humphries, Karma’s Brand & Communications Manager, explains that Karma does this by making environmentalism easy. They do this primarily through their app, which mitigates food wastage by connecting restaurants with consumers. Users enjoy discounted rates for great meals that would otherwise be discarded, and businesses gain additional profit on the products that would otherwise become sunk costs. Both sides of the coin benefit, with no additional costs being incurred while simultaneously reducing food wastage and its impact on the environment.
The company continues to adapt to the changing food economy during the pandemic. Humphries states that the closure of public dining services created a shift in waste patterns. Wastage moved higher up the supply chain to farmlands and wholesalers that produced and stored goods without outlets. So, Karma created an additional subscription box service to connect consumers with surplus fruits and vegetables. The business is highly agile and strives to find innovative ways to create societal and environmental value while generating profit.
Originally, the app was designed to publicize flash sales for different retail stores in Stockholm. The founders Hjalmar Ståhlberg Nordegren, Elsa Bernadotte, Ludvig Berling, and Mattis Larsson then saw a serendipitous pattern. The most successful part of the original design came with a top-end restaurant that offered away its unsold gourmet at the end of the day. This led to detailed research on food wastage that unveiled how one-third of all food gets discarded. The founders realized that they could make a real impact if they changed their business model. So, they completely revamped the app’s focus from bargain hunting to food wastage. Karma now enables foodies to save the environment while enjoying great bargain meals.
The Eastern philosophy of karma teaches that actions are cyclical. Charlotte Humphries holds that a balance between profit and purpose is personally important to her. As a business, Karma essentially makes money only when they are helping the planet. Humphries does not see herself as a natural “eco-warrior,” which is why she believes that for Karma to have the biggest impact on people like herself it needs to make sustainability feel easy. The climate movement has become starkly divided between activism and business. Humphries and Karma are dedicated to bridging the gap through easy actions. Ultimately, the company is internally motivated to create a behavioral shift in food consumption and wastage.
Karma has been adopted by 1.4 million people who have helped save 5 million meals to date. People are becoming more conscious due to the app which is dramatically increasing the number of meals saved each year. This behavioral shift is exactly what Karma is striving to create for their vision of zero food wastage. As the numbers continue to grow, smart consumers create consistent benefits for the environment while enjoying discounted meals. 1 out of 10 people in Sweden is now effortlessly saving the environment through Karma. 9200 resellers are making an extra profit from excess goods while feeding the hungry and reducing their footprint. The company works closely with restaurants as a resource for waste management, sustainable packaging, and potential partnerships. Karma is thus fostering a culture of zero food wastage by making sustainability easy.
On the surface, one may think that a free-to-use sustainability app such as Karma is a non-profit organization, but this is indeed a profitable business. Karma generates revenue by taking a small percentage of a sale each time a transaction occurs. Essentially Karma only makes money when the retailer makes money. Similar to many young businesses, Karma started its journey focusing on growth, but it has shifted its focus to profitability. Yet profitability at Karma means much more than just adding value to the economy. It means adding value to our planet and society as well.
While Karma’s work towards food sustainability stems from its business model, its associated business benefits are not just recognized internally. Karma provides substantial business benefits to its users on the retail end as well. Many retailers that use Karma have witnessed an increase in new customers and an increase in revenue. This app has enabled retailers to essentially market to new customers for free. Additionally, Karma has created a new revenue stream for retailers as the listed meals have already been deemed surplus. Retailers now have the power to grow their customer base and recuperate some of its losses while mitigating food waste.
Karma encompasses a massive influence on societal and environmental factors. The Karma app acts as a hub between a business owner and hungry users. Since the meals listed on the app are significantly discounted this can allow a consumer to purchase a meal that may have otherwise been too expensive. At the same time, this hub helps businesses cut their losses on meals that would have otherwise been considered a surplus. Another great benefit of Karma is that they try to include local charities where possible to ensure any food not sold on the app is donated to those in need. While Karma provides a plethora of societal benefits it produces immense environmental benefits as well. Although it may not be so obvious how an anti-food waste company provides environmental benefits, the answer lies in the alarming bridge between food waste and CO2 emissions. In comparison to airplanes, which only contribute to 2% of all greenhouse gas emissions, the food industry is responsible for 26%. So far, Karma has saved over 4 million meals which equates to about 1800 tons of CO2. Through Karma’s work to end food waste the company is simultaneously working to reduce global greenhouse gas emissions.
Charlotte Humphries, Brand & Communications Manager
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Business Website: https://karma.life
Year Founded: 2016
Number of Employees: 11 to 50
Karma is a company committed to ending food waste through effortless sustainability. It connects users with local restaurants to salvage surplus meals. Their current mission is to create the world’s first zero food waste generation.