4. Case Organisations
4.1. Løs Market
4.1.1. About Løs Market
Løs Market was founded on September 3rd, 2016 in Copenhagen, Denmark by Frédéric Hamburger with the vision of sustainable consumption options for consumers. Therefore, he created a shop called Løs
Market which is a supermarket without any packaging for the products sold. Customers can bring their own containers, or buy eco-friendly paper bags and recycled glass jars at the shop. Their goals are manifold and include the reduction of packaging waste, less food waste as well as an increase of environmental awareness among society. With their concept, they also aim to change nowadays’ shopping aspects which are characterised by over-consumption, long distribution channels and excessive packaging.
They have, therefore, created a waste-free shopping experience with mostly organic and local products in order to achieve a value chain that works according to principles of the circular economy.
“We believe in a greener and more sustainable future, combined with an intimate shopping experience. With us, you can shop your groceries completely packaging-free
and in bulk. That way, you can help minimising food waste as well as waste from packaging.” (Freely translated from Danish from "Din emballagefri købmand", 2017) Løs Market has set up an alternative to commercial supermarkets and retail stores and intends to educate, raise awareness as well as reduce (food) waste substantially through their eco-friendly and packaging-avoiding approach. The supermarket is located in the Vesterbro district of Copenhagen, Denmark.
4.1.2. The Concept
Their concept covers many aspects as they aim to have an impact on different parameters.
Firstly, Løs Market offers their customers a very different shopping experience to the ones that many customers are used to from conventional stores and big local supermarket chains. The experience is supposed to be a social and much more personal one for the customer, as personal interactions and conversations are being welcomed and promoted from the staff. The shopping experience is fundamentally different to the one at bigger supermarket chains, as the packaging is being held to a minimum. Many products are stocked in silos which enable the customer to fill up their containers with flexible quantities according to their actual needs. Their solutions are meeting hygienic standards, as customers cannot get physically in touch with the products in the silos.
“We want to reduce packaging and we want to change the way of buying food. We think there is too much packaging in this country and in the way of buying the stuff and food.
So, it is obvious and it is possible to avoid that.” (Interview Hamburger, 2017, Appendix J, 114)
Thus, customers have to either bring containers and packaging themselves or alternatively can buy paper bags or reused and industrially cleaned glass jars at the store to transport their purchases. Additionally, Løs Market is putting a focus on providing organic and local produce with the aim of minimising the consumers’
environmental footprints.
What is more, customers have the opportunity to buy in flexible quantities and therefore optimise their shopping.
“Then we give the customer the opportunity to buy only what they NEED. The major part of food waste is in the households. And in our opinion, it is because the consumers buy too much or because they are forced to buy too much. For example, you can only buy a pack of six bananas. If you are only one guy, you cannot eat six bananas in a week. So, at our place you can buy one banana, you can buy ten bananas, we don’t care. You only pay
for what you bought in weight.” (Interview Septimius Krogh, 2017a, Appendix I, 105)
By buying only the quantities customers actually need, they can avoid additional cost as well as potential food waste due to excessive consumption. Adding on to this, the customer has a greater offer to choose from with the products.
“And then we give people opportunity to try more new stuff, because they can buy little of a lot, of different kinds. Instead of just buying one kilo of lentils, you can buy five different lentils and in a small amount.” (Interview Septimius Krogh, 2017a, Appendix I,
105)
Even though the stock range might be smaller than at bigger supermarkets, Løs Market can offer a variety of products.
Løs Market sees it as their responsibility to provide their customers with information and educational aspects of environmental issues and the consequences of consumption and waste. Customers, therefore, are provided with insights on these topics as many of them feel overwhelmed by the sheer multitude of different sources of information available to them (Interview Septimius Krogh, 2017a). For instance, on their website as well as on their social media channels they provide information regarding waste and other environmental issues, they promote relevant social initiatives such as “Stop Spild Af Mad”2, the “Climate March” and a purchasing cooperative (Din emballagefri købmand, 2017, @loesmarket, 2017). Løs Market also engages in activist-like activities such as spreading messages with political opinions and pledges towards a certain movement.
This has been the case in one of their recent Facebook updates regarding a proposal on waste prevention to be discussed by the Danish parliament (@loesmarket, 2017, April 26).
“We will try to tell our customers: Hey you should not do that, and you should do that.
Because it’s a jungle of information and then we have the job to sort some of the information out and take the useful information and say: Hey this is what we should do.”
(Interview Septimius Krogh, 2017a, Appendix I, 109)
2Stop Spild Af Mad is a Danish movement to fight food waste.
Løs Market aims to directly influence the environmental awareness and purchasing decisions of the general public by informing and educating them. I will discuss the topic of activism in more detail in chapter 5.3.2.
Customers who care about the environment and want to make the right choices while shopping, have the opportunity to take purchasing decisions in line with their values i.e.
sustainable supply chains, fairly and locally sourced products as well as the avoidance of waste. The products sold at Løs Market are sourced from preferably local suppliers and mostly entail organic products. Furthermore, these customers are being provided with the opportunity to keep their food waste to a minimum.
“You decide what to eat, what to buy, how to fit in, and the quantity you want. You are actually not controlling of course, but you decide yourself what you want. And this is very
important for us. Because the system is built this way, that you don’t have any choice.”
(Interview Hamburger, 2017, Appendix J, 116)
According to Løs Market, consumers are trapped within a system where they do not have a choice about what and how they consume. This is where Løs Market wants to provide an alternative (Interview Hamburger, 2017).
4.1.1. The Organisation
Currently, Løs Market’s team consists of four individuals. Frédéric Hamburger is the founder and CEO of the company, taking care of day-to-day business activities, purchasing, stakeholder relations, as well as establishing and maintaining relationships with customers inside the shop.
August Septimius Krogh is responsible for Public Relations and Communication which also includes marketing (online and offline) as well as the maintenance of Løs Market’s website. He is working on a part-time level at Løs Market, however soon after my data collection period ended (April 2017), his contract and activities at Løs Market terminated. There are two more employees helping out in the shop as well as in the background with administrative work. My interview partners have been Hamburger and Septimius Krogh who provided me with inside perspectives on Løs Market.
Løs Market is part of a local community organisation called “Settlementet” which is Danish for “The Settlement”. They are a voluntary organisation that works towards a community that respects and includes all members of society into the labour market, especially marginalised groups. They do so by providing counselling on different topics, offering support to integrate unemployed people back into the labour market, as well as strengthening the local social network. They are active in the street called Saxogade in Copenhagen, where Løs Market is located, too. Within this street, they have created a social-economic network of resident shops which are all united by working towards a triple bottom line of economic, social and environmental goals ("Settlementet – Vi skaber netværk", 2017).
Løs Market is a part of the “Co-Creation” program of the Settlement and has taken on people from the network before for internships or other temporary occupational activities to activate them and prepare them for the labour market (Interview Hamburger, 2017).
4.1.2. Business Aspects
Løs Market purchases their products in bulk and sources their products preferably from local suppliers. Additionally, products are mostly organic as well in order to ensure that the products are in line with sustainability values.
The purchased products are not being packaged in standardised quantities usually used in the industry or other supermarkets, but rather offered in bulk for the customers to choose their own quantities individually. The customers then get charged for the purchased products per weight. Løs Market puts quite a low margin on their products and can offer competitive pricing due to their bulk-purchasing (Interview Hamburger, 2017).
Customers
Løs Market is acting in a B2C (business-to-customer) model, i.e. they offer their “goods directly to customers for their own use, rather than to businesses” (Cambridge Dictionary, 2017b). Therefore, they need to convince the general public on why they should buy at Løs Market. A major barrier of Løs Market is to raise people’s awareness
and change their habits as shopping at their store requires an adaption of current shopping behaviours. As consumers are used to simply taking a pre-packaged bag off the shelf, they might be reluctant to shop at Løs Market as packing the products themselves is perceived as a barrier (Interview Septimius Krogh, 2017a). Løs Market’s customers are usually environmentally aware individuals who are interested in sustainability and like to have an alternative and sustainable option when it comes to consumption that is in line with their values (Interview Septimius Krogh, 2017a).
Revenues
Within the first six months of its operations (September 2016 – February 2017), Løs Market could achieve revenues of 1.2 million Danish kroner (Alminde, 2017). Turnovers are constantly growing and leave the founder and CEO, Hamburger, with assurance.
“We are not afraid – the turnover is growing, so I am not worried at all.” (Interview Hamburger, 2017, Appendix J, 119)
Due to Løs Market’s success, they will expand over the course of 2017 and potentially open up another store in Nørrebro, Copenhagen as well as one in Aarhus, the second-largest city in Denmark (Alminde, 2017). The expansion to Aarhus, however, is not as concrete yet, as it is to Nørrebro (Interview Septimius Krogh, 2017b).
Additionally, they also plan on engaging more in local projects, one of them being ‘Bulk Bike’. A bulk bike is a cargo bicycle that carries silos and containers like the ones in Løs Market’s physical store. This mobile solution can be used for selling their products all around the city, raise awareness in the public through its noticeable appearance as well as facilitate logistics between Løs Market’s shop and their potential new shop in Nørrebro (Interview Septimius Krogh, 2017b).
4.1.1. Motivations
Løs Market has been founded based on rather idealistic motives by the founder Frédéric Hamburger. To him, “sustainability always comes first” (Field Notes Løs Market, 2017), which is reflected in the way how Løs Market operates and appears in public. Public communication of Løs Market on their social media channels sends clear signals about
their activist function through which they aim to inform the public about environment related issues and raise awareness. These idealistic, as well as activist characteristics of Løs Market’s work, will be elaborated on more deeply in chapter 5.2.4.
They are strong supporters of the concept of the circular economy as well as the triple bottom line (see chapter 5.1.) By reducing excessive consumption, reusing products and packaging and therefore extending their lifecycles before they go to waste, they want to contribute to a more environmentally aware way of shopping and consuming.
The vision of Løs Market is that future supply chains will work in a totally circular manner, reusing packaging, reducing waste and recycling waste products (Interview Hamburger, 2017). Running a business for them means to include environmental, social as well as economic values and aspects in the day-to-day business in order to be truly sustainable (Interview Septimius Krogh, 2017b).
4.2. P HENIX
4.2.1. About Phenix
Phenix is a for-profit environmental organisation and social enterprise that has been established in France in March 2014 (Phenix FR, 2017). The Danish branch has been
established in November 2016 (Interview Boyer Chammard, 2017).
My interview partner at Phenix was Charlotte Boyer Chammard, Director of Phenix Denmark, who initially established Phenix in Denmark and who is in charge of business development as well as all the daily activities (Phenix DK, 2017).
Phenix’ mission is optimising and positively impacting existing supply chains by enabling companies to reduce their food waste and extend product lifecycles by repurposing and reusing.
“Basically, we try to create new value chains, so that it fits in a circular economy loop. So, the waste products - or products that are considered waste - we assume, that they
actually have value and that they can be used as resources for other industry players.”
(Interview Boyer Chammard, 2017a, Appendix H, 91)
They help companies to reduce their waste by using the flows of the circular economy (Phenix DK, 2017). More information on the circular economy can be found in chapter 5.
4.2.2. Phenix’ Services
Phenix is a service provider for retailers and wholesalers as they offer to repurpose products and extend life cycles to minimise their clients’ environmental footprints and to bring about cost avoidance and savings.
Their services for businesses are manifold. Phenix observes and analyses current processes within their clients’ organisations and can subsequently give recommendation strategies on how to optimise these processes as well as offer support in integrating these. Furthermore, they offer a vast network of recipients for companies’
waste products, therefore enabling companies to save money and integrate environmentally cautious processes into their supply chains. They offer comprehensive support in dealing with the logistics, starting from finding the right partners to enabling convenient pick-up times of products aimed to be redistributed. Through an online platform, Phenix’ clients are connected to the recipients of their waste in real time, ensuring a smooth transition. The system which Phenix implements within organisations, enables a high rate of traceability of the products, meaning that every single product can be traced and the environmental impact of the services can, therefore, be assessed.
“[…] we have the whole traceability of all the products. That is one of our guarantees.
This is what we do, we know exactly what products we’ve repurposed and where they’ve gone. We follow up with a charity organisation and see how much food they’ve received.
We know from each supermarket every product that they donated. That enables us first to tell them what their clear impact was but also to give recommendations to reduce that
in the future.” (Interview Boyer Chammard, 2017a, Appendix H, 95)
Phenix also acts as an observer of the industry and provide legal and fiscal expertise for their clients in regards to issues of sanitation as well as other legal and fiscal matters (Phenix DK, 2017).
They offer staff training and coaching for raising awareness on the issue of food waste and innovative procedures to fight this. A collaboration with Phenix enables their clients to implement sustainability strategies into their corporate social responsibility (CSR) strategy, which allows them to implement tangible measures designed to reduce waste (Phenix DK, 2017).
Most of these services are mainly offered by the headquarter organisation in France. In Denmark, however, their business model is still subject to change and might require further adaptation as they are faced with different needs as well as regulations in the local market (Interview Boyer Chammard, 2017a, see more in chapter 5.2.2.).
The focus of Phenix’ activities lies within the support in logistics. Many supermarkets find it difficult to organise the logistics of redistributing surplus food as they do not have the suitable resources and the network to establish a suitable system in a sustainable as well as in a profitable manner. Phenix offers support in finding the right partners for redistribution as well as organising convenient pick-up times, even during holiday seasons (Interview Boyer Chammard, 2017a).
4.2.1. The Organisation
After over two years of existence, the French company has expanded throughout Europe and is now active in four different countries namely France, Spain, Portugal and Denmark. As they are looking to expand their business model, they have established branches in the above-named countries. Boyer Chammard, who was my interview partner, is the Director of Phenix Denmark and initiated the local branch here due to her personal interest in avoiding waste and environmental issues (Interview Boyer Chammard, 2017a).
The Danish, Spanish and Portuguese branches have been established in 2016 and are managed by one director each, who are aiming to expand the concept to the local
markets. The French headquarter organisation has experienced a rapid growth phase in 2016 from around 30 to 54 employees to-date (Interview Boyer Chammard, 2017a).
4.2.2. Business Aspects
Customers
Phenix is a B2B (business-to-business) organisation which refers to “trade between different businesses, rather than between businesses and the general public”
(Cambridge Dictionary, 2017a). Therefore, the organisation focuses on supermarkets, retailers and wholesalers as customers.
“So, it’s a B2B, we don’t really aim at customers. This can be like charity organisations which work well in France or it can be wholesalers, discounters, outlets, kind of anything
[…]. Just anyone that can use this product as a resource and that can create value for the company instead of having the company pay money to get rid of their waste.”
(Interview Boyer Chammard, 2017a, Appendix H, 92)
By offering them logistical services, they substantially contribute to organising their clients’ supply chains more efficiently and less environmental degrading. This represents an innovative business model solution aimed at diminishing environmental degradation that occurred from market imperfections such as inefficiencies in supply chains (Cohen & Winn, 2007). Businesses that take advantage of Phenix’ services need to do so as they have established an unsustainable and inefficient supply chain with a high amount of waste products that needs to be redistributed efficiently.
Minimising the environmental footprint might not always be the first priority in their clients’ organisations, however, they use impact figures for marketing and communications matters and integrate these sustainability strategies within their CSR approach.
“Definitely, they only look at the financials. That’s the only argument to convince. And it’s quite interesting actually. We reduce streaming cost, we provide all this ourselves, but
it’s very rare in the sense that we have over 400 partner stores, but only two or three with the priority of a social goal. Everyone has focused on the financial aspect of it. If you
say we can reduce your waste stream and cost by 40%, then they’re interested. Before that, not necessarily.” (Interview Boyer Chammard, 2017a, Appendix H, 102)
Reverse logistics of products can present serious cost barriers to realising environmental benefits for companies (Clift & Wright, 2009). Thus, Phenix saw an opportunity on the market for offering this service to businesses.
Business Model
In France, Phenix has been quite successful with their concept and are currently scaling it up in the French market. Step by step, Phenix’ services are implemented in the numerous branches of a large supermarket chain (Interview Boyer Chammard, 2017a).
In the Danish market, however, they did not have any success with the French business model as described before. Therefore, they only had one customer so far in Denmark, which was an enterprise renting out office spaces to other companies. By offering redistribution services to this client, they could repurpose a substantial amount of furniture pieces that would have otherwise gone to waste.
As they changed their business model to adapt it to the Danish market, it will result in a change of customer groups, too. More details on the failure of their original business model in the Danish market will be discussed in the analysis in chapter 5.
Revenue
Phenix’ clients are charged on the basis of a commission model and therefore pay for the economic value Phenix created for them. The calculations of these values are undertaken by Phenix directly in accordance with and after assessing the process in collaboration with their clients.
Environmental values are also being calculated such as how many tonnes of food could be saved or how many carbon emissions could be avoided by implementing the optimised processes. These environmental impact figures are calculated on the basis of numbers provided by the French Environmental Protection Agency. These numbers only represent estimates of the actual reality as they might vary in accuracy. Clients are not charged based on the environmental impact numbers, but solely on the economic value