Toast Ale | Equity for Good
Brewing with Fresh Surplus Bread. Catalyzing a Movement Against Food Waste Founded by Tristram Stuart | United Kingdom
What’s At Stake
1/3
1/3 of all food produced for human consumption -around 1.3 billion tonnesgoes to waste
870 million 870 million people facing hunger around the world would have enough if even 1/4 of food waste was curbed (source: fao.org)
Around the world, one-third of all food produced for human consumption goes to waste. The negative impact and lost opportunity of this waste does not stop there: this waste contributes to a food industry which causes 80% of deforestation worldwide, 30% of greenhouse gas emissions and 70% of freshwater use. The FAO estimates that every year, the production of food that is wasted generates 3.3 billion tonnes of greenhouse gases and uses up to 1.4 billion hectares of land. As the world population is expected to reach 9 billion by 2050, the ecological impact of agriculture is set to expand still further, unless the current food system can be radically transformed. Shifting practices to reduce food waste would also address the challenge of a total of 870 million people around the world face hunger. (source: FAO) In the UK where Toast Ale was founded, for example, 4.7 million people cannot afford a decent diet (source: The Guardian). Toast Ale was founded to find ways to stop and redirect food waste.
Business Model Innovation
When the investors for Toast Ale pose a common question about their barriers to entry to its beverage, its founders have a radical answer. Co-founder, Tristram Stuart, says the barriers for others to copy his model is simply, “none!” Having developed a craft beer that is produced from fresh, surplus bread that would otherwise go to waste, Toast Ale deliberately decided to publish its recipe online -and it’s since been downloaded more than 35,000 times. This open source approach to sharing is baked into the company’s founding mission: to catalyze a global movement against food waste. “We think this approach will generally lead to acceptance” Tristram describes, and “it will be good for our business too.” Founded in 2015, Toast Ale is building a movement against food waste through multiple, market-based approaches. Firstly, Toast Ale has innovated on its product by creating a food product that is made from food that is otherwise destined for waste, but is still delicious, and taps into a growing demand for craft beer. The surplus comes from sandwich factories and households that discard the crust of breads given people’s preference for just the inner part of the bread , and bakeries and markets discard bread that is even a day old. Bread can easily replace
a portion of the barley normally used in making beer. (The oldest surviving beer recipe, documented by the ancient Mesopotamians, features bread as a key ingredient.) “We source surplus loaves from bakeries and abide by strict food safety procedures, ensuring all bread is kept in sealed containers between the source and the brewery,” Toast Ale describes. “We contract brew with established brewers, leveraging their expertise to create truly delicious beer. We also collaborate to create exciting beers with local bread at a community level.”
At a Glance
Leveraging bread that would otherwise be discarded means that the cost of production is lowered: Toast Ale has partnered with the sandwich chain EAT in order to use its surplus bread for the production of its Ale. Toast Ale also creates catchy and fun branding and marketing to increase consumer demand for products that reduce waste, advertising its products with puns such as “TOAST: Brewed with Bread” and “making Toast the best thing since… well, you know….”
• Sales and marketing
With our recipe being downloaded over 35,000 times [...] the single biggest threat to our business is also the testimony to our impact, but we think it is [not just good for impact] but also good for our business.”
Revenue Model • Product Sales • Licensing • Financing
Innovation • Product design • Supply chain
The second market-based approach that Toast Ale leverages is by influencing other companies to change their practices as well and finding as many other breweries as possible to partner with Toast Ale to adopt its approach to producing beer that reduces food waste. To model the new approach to brewing, Toast Ale became the first beer company in the UK to gain the rigorous B-Corp sustainability certification. Furthermore, although it has not been by a direct relationship, one example of another company adopting the model that Toast Ale pioneered in 2016 is the first major supermarket in the UK, Mark & Spencer’s, launching its own ale product in 2018 from fresh surplus bread. In addition, Toast Ale seeks to create social impact by innovating on its business model and dedicating 100% of its profits to a local aligned non-profit that is also working to eliminate food waste (Feedback, a charity also founded by Tristram Stuart). While the primary aim is to
create social impact, sustainably, this approach also builds on a growing trend by companies to donate their proceeds to charity - and publically marketing this charity as a unique value proposition for choosing their product over others. As a startup, so far this means 12k Euro have been donated so far, but Toast Ale established a licensing model inspired another brewery in Brazil, Iceland, and South Africa that must commit to donate 5% of its sales to a local aligned non-profit. Originally started as a way to generate income for the Feedback food-waste campaign, Toast Ale remains dedicated to finding new ways to scale to meet the size of the problems tied to food waste. With more than 24 million slices of bread wasted in the UK alone it still has a ways to go. With this in mind, Toast Ale is also looking to transform the culture and mindset of investors, seeking to create a class of “equity for good� investors, who are willing to commit gains to further invest into social businesses.
Approach to System Change
Toast Ale is working to stop food waste and the missed opportunities for solving social problems that the waste creates, by introducing new resources, relationships, mindsets
At a Glance • Resources • Relationships • Rules & Mindsets
Craft Beer Market Toast Ale transforms that craft beer supply chain to reduce food waste After
Before Resources
Resources
-Grain
-Surplus bread as a raw material
-Capital
-Capital
Rules & mindsets
Rules & mindsets
-Craft beer as a new niche market with higher margins
-“Even as competitors, let’s collaborate to create better business practices in the industry”. -Common business practice: donating share of profits to food charities &
Roles & Relationships
campaigns
$ for beer (often via intermediaries like supermarkets, bars, etc.)
Roles & Relationships
Before After
Share recipes and best practices for eco-friendly production with
Producers
Consumers Producers
Results
Consumers
-Economic value created for breweries -Ecological footprint: [something about CO2 stuff, chemical used, etc.] -[Consequence of grain, a food, being used as a raw material]
Results -Economic value created for breweries, supermarkets, investors, and their employees -Ecological footprint: lower beczause of not using grains as a raw materials and production practices spreading more quickly -Bread waste reduced -Contributions to the Commons via open sourced beer recipes
*This is a simplified systems diagram, and not intended to be comprehensive. The analysis uses the “5Rs framework” developed by USAID. More information can be found here at usaidlearninglab.org
Before
After
Unused bread goes to waste or animal feed
Surplus bread is repurposed for profitable production of beer
Food charities and campaigns must rely on short-term or inadequate donations
A percentage of profits goes to support food charities or campaigns working to end food waste and hunger
Relationships
Recipes for commercial ale is closely guarded
Breweries and consumers can learn from or work with Toast Ale to adopt its open source recipe and food-saving approach
Results
Investors primary seek a profitable return on investments without any restrictions
Investors seek social impact in addition to profit and commit to reinvesting gains towards social businesses
Breweries work in competition with each other and primarily for profit
Brewers adopt similar cost-saving, social impact business practices
Resources
The Impact
· ·
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Toast Ale’s open-source recipe has been downloaded over 35,000 times, encouraging others to reduce the waste of fresh surplus bread As well as their core production in the UK where beer is now sold nationally in Waitrose, Tesco’s and hundreds of other bars and stockists, Toast Ale has collaborated with dozens of breweries in the UK and globally to spread the knowledge and craft of brewing with surplus bread. Toast has also begun expanding internationally and are brewing in USA, Brazil, Iceland, and South Africa. Bread surplus is tackled locally and the environmental impact of transportation are reduced by brewing locally. In the USA Toast is sold in the large supermarket chain Whole Foods as well as companies such as Shake Shack and Total Wine. Spreading the innovative way to generate sustainable funds for food-waste non-profits, Toast Ale’s international brewers have opted to donate parts of the revenue to local non-profits that also works to end food waste and fix injustices in the food system. So far this include brewers in Brazil, South Africa, and Iceland. Toast Ale estimates that each £1 invested in Toast Ale yields £3.60 for charity.
At a Glance • Growth • Open Source • Smart Network • Lobbying • Campaigns/ Movement building
Key Ingredients for Success
To Be Successful at Business & Social Impact - Don’t Forget about the FUN: “The spirit, making it FUN, is SO IMPORTANT to get people to be a part of the systems change,” Tristram describes. “The way to have the best party is to have the best music, the best DJs, and not just asking others to turn down their music. You go to that other party and say “hey, there’s another better party down the street” and that’s the way to get others to get excited.” Similarly, the company’s culture is critical to its ability to have a strong team, product, and to build the partnerships needed to grow the business, and spread impact. Toast say that to change the world you need to throw a better party than those destroying it. Achieve Business and Social Impact through Consistent Guiding Principles: To ensure that Toast Ale is able to achieve social impact while having a profitable business, the company aligns around four common principles, including: 1.To produce great craft beer that consumers love 2. To eliminate bread waste directly by brewing as much of it as possible 3. To raise awareness of the problems of, and solutions to, food waste 4. To maximise profits, all which will go directly to Feedback and other local food waste organizations
Pitfalls to Avoid
Invest in Ways to Measure the Impact, including Indirect Impact “We’ve never been resourced to track our impact properly.” Tristram describes. “I wish that funders had a harder line of demanding impact in a much more systematic way, and were more generally interested in those kind of external forms of impact that one can have. That’s a cultural change that needs to happen in the funding sector. We are constantly collecting anecdotal evidence; it’s very insufficient and unsatisfactory.” Find a Sticky Message that Builds Co-Ownership in the Vision: Tristram describes how it has taken years of research and testing in order to identify what specific message would resonate with the most stakeholders to pursue the same problem. Tristram draws the distinction between creating messages that are insights that stand for the general problem - versus messages that motivate and inspire others for a common cause to solve together. From Tristram’s experience, sticky messages and shared vision can only be developed as a result of repeatedly engaging and testing variations with multiple stakeholders.
“I wish that funders had a harder line of demanding impact in a much more systematic way, and were more generally interested in those kind of external forms of impact that one can have. That’s a cultural change that needs to happen in the funding sector. We are constantly collecting anecdotal evidence; it’s very insufficient and unsatisfactory.”
Acknowledgements â??
Authored by Reem Rahman, Olga Shirobokova, Odin MĂźhlenbein, Nadine Freeman and Mark Cheng for Ashoka Globalizer Interviews by Ken Banks (FrontlineSMS), Michael Feerick (Alison), Steve Song (VillageTelco), Dr. Devendra (Aaravid Eye Care Systems), and Tristram Stuart (Toast Ale). Creative Commons creativecommons.org/licenses/by-sa/4.0 Licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.