Food Delivery Services: Eat With Less Impact?
Can the convenience of meal subscription services actually come with an added benefit of being better for the planet?
A big thank you to those who answered my poll last month! The clear winner with 75% of the vote was for me to compare HelloFresh Vs. Blue Apron, which selfishly, was the win I was hoping for.
The intersection of sustainable farming and either its effect on climate change or its ability to reduce the impact of climate change has always been an interest of mine. Especially because farming is such an integral part of life, it’s nearly impossible for humans to exist without it.
Because farming, cooking, and eating all play such an important role in daily life, it’s an area ripe for innovation.
Enter: Tech updates to enhance an overstressed farming system
Agriculture takes up more land than any other activity on Earth…and emits 30% of the world’s greenhouse gasses.
Farming is not necessarily always bad. There are sustainable ways to produce food, but we’ve just focused heavily on unsustainable ways since the Green Revolution — like using pesticides, not rotating crops, and expanding into more water-stressed areas.
Modern farming practices have increased the global food supply and helped keep more people fed and alive. But, it has also contributed to a changing climate, which could ironically eliminate the progress it originally ushered in.
Before you ask, I am not a vegan. But if you’ve read my earlier newsletters, you can assume that I am the person throwing money at organic products [that promise to follow less destructive farming practices] and limiting meat consumption to a few days a week. And you’d be right.
Hopefully, I’m not losing my money to a false pretense system, but that is a debate for another day.
There are ways to reduce the destructive nature of farming. As a consumer, you can focus on buying from local farmer’s markets, sticking to seasonal food, and buying items with less packaging if possible.
And if you don’t have the space, time, or energy to farm in your backyard, there is only so much you can do.
This is where industry-wide change comes in, and where meal delivery kits are attempting to position themselves — as a convenient, good-for-the-planet food option.
Other changes can range from low tech, like rotating crops to ensure soil remains healthy and reduces the need for weed killers, to creating entire indoor farms that eliminate pesticide use and reduce water needs.
Yet, these farms come with their own issues like needing an incredible amount of power to replace the sun. The Dutch have this figured out, so I think we can make it work eventually.
HelloFresh Non-Financial Report 2022
The HelloFresh Non-Financial Report - what a clunky title. I spent some time reviewing their 2021 report and it is much more appealing than this version, title and design-wise. But, this denigration of overall vibes probably has to do with the impending necessary standards coming from the European Union.
HelloFresh is a German-based company and will need to tweak its reports accordingly. You can find a quick review of European CSRD standards at the bottom of my newsletter here.
While the 2022 report was dense, it was full of great things.
What stood out:
Although ESG encompasses social and governance topics, I focus only on environmental aspects. So I was happy to see that HelloFresh starts their report with their sustainability initiatives, highlighting things like food waste reduction, reducing emissions, packaging reduction, and responsible sourcing - a head start before Cop28!
The leadership team’s compensation is contingent on emissions goals and food waste targets, tied directly to performance KPIs. This is huge, many companies have sustainability metrics as a “nice to have,” not as something that is tied to the monetary benefits of the leadership team, like HelloFresh.
On page 5 of the report, it calls out that they have considered the double materiality of HelloFresh - highlighted in the 2021 report - and determined the ESG areas that will have the largest influence on HelloFresh and stakeholders, from food waste to employee health and safety.
Their emissions are tracked on a per-source basis, meaning they can more accurately track emissions from third-party vendors and track internal progress, like the reduction in CO2 emissions if they switch to EV delivery trucks. I hope to reach out to someone at HelloFresh and report back on some questions I have about their GHG accounting.
HelloFresh conducted a meal kit life cycle assessment via Quantis, which compared the typical carbon emissions from the same meals purchased at a traditional grocery, made at a restaurant, or purchased via HelloFresh. Overall, HelloFresh was found to be the better choice, but I cannot be too confident because I did not have time to dig into the results of this assessment.
HelloFresh prioritizes reducing packaging first, and in 2022, avoided nearly 212 metric tonnes of paper packaging and 54 metric tonnes of plastic packaging.
Ice packs are also being switched from gel to water-based options, allowing for easier recycling and the ability to return water to the environment.
Prioritizing renewable energy is a key mission of HelloFresh, its implementation increasing each year - but, overall energy use is also increasing, so renewables need to be added at a faster rate to offset overall energy growth.
What could be improved:
Carbon that cannot be eliminated or avoided is offset via carbon credits which are purchased from South Pole — a company now known for selling baseless credits.
HelloFresh does make recycling options easily accessible, but recycling falls on the consumer. This is a broader societal issue, but perhaps HelloFresh could collect old boxes and packaging to be recycled when they drop off a new box.
HelloFresh states “No specific reporting framework was applied to this non-financial report, as the meal-kit industry is not currently addressed directly by common reporting frameworks.” This is technically accurate but is setting them up for a big overhaul when CSRD goes into effect.
On page 5 it says that there were no ESG risks related to business operations, which seems impossible especially because there are many climate risks that can affect farming and available food options.
Blue Apron Better Living Roadmap Progress Report
I’m not sure what is up with each ESG report title this month being convoluted.
Blue Apron was once a publically traded company, more on that in the business comparison section. Because of this, according to SASB standards which you can read more about here, they are classified as an E-Commerce company.
This classification does not account for all of the environmental metrics that can encompass a meal kit company, from water use to delivery emissions.
Their sustainability initiatives are relatively new, this is their second ESG report, but to Blue Apron’s credit, they include a PDF of their SASB reporting metrics and align them with Blue Apron initiatives.
What is so tough about this is that it says there was no water withdrawn because the only thing that is necessary to report on is onsite server use, not water used in third-party farms, or in packaging production.
Compared to HelloFresh, this report is very short and sparse on details, but heavy on words like “intend to,” “will encourage,” etc. Blue Apron is figuring out what ESG reporting will look like for them, but their beginning is rather positive.
What stood out:
Blue Apron teamed up with PlanetFWD to more accurately measure their Scope 3 emissions.
Blue Apron calls out that their Greenhouse Gas measurements in the 2021 ESG report were incorrect, and provided updated numbers based on their collaboration with PlanetFWD — they could have not addressed this issue at all, so this shows great transparency.
Blue Apron utilized PlasticIQ to conduct a waste assessment and received Silver Status. I will say, that this tool does seem to be based on self-reported data and is free to use, so it might just be a way to receive a badge saying you do not use a lot of plastic without that being the case.
Because of this, in 2022 Blue Apron also launched a Responsible Sourcing Council to monitor the progress against the PlanetFWD lifecycle assessment. I am looking forward to seeing the results in the 2023 report.
Their 2025 goal of ensuring all packaging is either recyclable, reusable, or compostable was 87% met by 2022.
80% of ingredients are sourced directly from suppliers, so this makes their emissions easy to track, but also reduces the travel between sources to a meal kit.
There are quotes featuring customers highlighting the little food waste produced from their meal kits. However, who knows if these are even real or accurate? I’m wondering where the 97% came from — I also feel inclined to say that this Ana is not me.
What could be improved:
Blue Apron says they offset 100% of their emissions via carbon credits, and as I’ve stated many times, carbon credits are not always accurate. It would be better if they listed the companies these credits were purchased from.
In the end, it is made clear that Blue Apron “assumes no obligation to update the forward-looking statements in the report….” This might not be true if they are going to be subject to California reporting standards, which they will if their revenue increases to $500 million.
How to improve each report
Instead of adding more text here, over the next few weeks, I am going to add suggested updates on my LinkedIn that will include suggested improvements to each report.
I’d love feedback on this — let me know if you think the newsletter would be a better spot for these suggestions, or if you enjoy my LinkedIn posts.
Potential climate impact on each business
There are many moving parts when it comes to a meal kit business. There are corporate offices, of course, but there are also the farmers and suppliers, warehouses to organize and store the food, and a fleet of delivery trucks.
There are multiple points along the supply chain where climate impacts could hinder operations. I’ve covered many of these in previous newsletters, so I will just mention a few briefly.
Unreliable grid energy could lead to power outages at warehouses, but HelloFresh generates most of its electricity with renewable energy.
Extreme weather, like the ever-increasing floods within the U.S., could hamper the delivery of food and especially the growth of it at farms.
Droughts can lead to a lower crop yield, and rising heat could ruin perfectly good food that is waiting on someone’s doorstep, the amount of ice packs might never be enough.
Breakdown of each business
HelloFresh:
Founded in Berlin in 2011 and is now in 18 countries throughout Europe, North America, and Australia operating under various brands with different meal plan offerings.
HelloFresh’s main revenue generator is their meal kits where consumers receive pre-selected ingredients for meals and cook the food themselves. But, they also offer some fully cooked options and pet food delivery services.
HelloFresh is publically traded on the Frankfurt stock exchange, but not yet in the U.S.
Blue Apron:
Blue Apron was founded in 2017 and operates exclusively within the U.S
Blue Apron sells meal kits and ready-to-heat meals, they have not yet expanded into other meal offerings, but that could change because…
Recently, it was announced that Blue Apron would be acquired by Wonder Group, a food delivery firm, in an all-stock deal — so it is no longer publically traded. We’ll see if they stick to SASB standards next year.
To answer my question posed at the beginning, can meal kits be better for the planet and more convenient?
I think the answer is, don’t buy meal kits because you want to reduce your impact on the environment, buy them because you do not want to think about your groceries.
Happy almost 2024!
Ana
**I know there are so many areas within this that I cannot go more into depth on like how the Green Revolution farming practices are worse for the environment, or what COP28 is, but I hope there is a general understanding of environmental factors among readers. Correct me if I am wrong, I can provide more resources!**
ESG Reports