HULA - A Circular Solution for Food Delivery & Takeaway

In Chile more than 990,000 tonnes of plastic are used each year while only 8.5% of this is recycled. The remainder ends up in landfills or oceans, threatening human health and biodiversity. One big contributor to this is food delivery and takeaway. It’s a big and growing industry in Chile offering food in single-use, often plastic, packaging. Our mission is to tackle this issue at its source. Rather than finding alternative materials for single-use packaging we aim to fully reform the system by offering reuse as a service for food packaging. Hula provides restaurants with high quality reusable containers, which they can use to deliver their orders. The reverse logistics for collecting and recirculating the containers is fully operated by Hula and partners. Our project will inspire the industry and consumers in Chile and Latin-America by showing that reusable packaging is possible. We’ll establish a ‘new normal’ in the industry.

The total market size of food service in Chile in 2018 was 4.3 billion dollars, of which take-away and delivery made up 23%. Food delivery is an enormous industry in Chile and is still growing at a rate of 30% a month. Currently single-use plastics are the go-to solution for food delivery. We estimate that food delivery sector in Chile contributes to 150 tonnes of plastic waste a year. For a restaurant to find an affordable alternative while maintaining quality is a challenge. Hula delivers both high quality reusable packaging and a smart system for reverse logistics, thereby reducing costs and impacting local communities in various ways:

• We positively affect local communities living near or from the oceans by giving them a healthier environment to live and work in, by minimising pollution of plastics;
• We positively impact the lives of people surrounded by illegal dumping grounds. E.g. Santiago has 73 of those. Eliminating these would impact over 1.5 million people and further expansion of Hula would increase this number significantly;
• Finally, we affect the lives of the Chilean (and eventually Latin American) people ordering food at their homes, as we offer them a sustainable alternative to plastic waste.

The ultimate impact of our solution are the elimination of plastics in soil and oceans that are currently threatening biodiversity and people (especially those living close to landfills). To achieve these goals, we directly work with every actor in the food delivery and takeaway industry. These are:

• Restaurants - delivering food to consumers: We offer them the opportunity to have reusable packaging as a proposition towards their customers;
• Consumers - ordering food at their home or office: They are able to return the HULA food containers in a convenient way and have less waste to dispose. Furthermore, they are part of the community offering a solution to the immense plastic challenge;
• Chilean government: Chile has signed the New Plastics Pact, and single-use plastics will be banned, we offer a great solution to fully switch away from single-use packaging in the food delivery industry. Chile can set the example and inspired other countries to do the same;
• Delivery services: they can offer an innovative packaging service, being a frontrunner and a showcase for Latin America, and drive the sustainable consumption of delivered food.

Hula is a circular solution for food delivery and takeaway, that also includes smart reversed logistics and cleaning services in order to ensure the packaging remains in the loop. Our proposition gives restaurants the opportunity to move from single-use packaging to reusable packaging without creating extra work for themselves while also saving money. Hula provides the full service to make this transition possible including:

• High quality reusable containers;
• A well thought-through system for reverse logistics that includes cleaning and redistribution of the containers to subscribed restaurants;
• A smart tracking system allowing for full insight in the status of the containers and offering incentives and rewards to consumers for returns.

In addition to being a sustainable solution, Hula helps restaurants improve their service to customers by:

• Low cost and worry-free packaging;
• Loyalty and sales: reusable packaging can create loyalty amongst customers and more sales;
• Experience: by offering higher quality and more stylish materials (e.g. prevention of leakage, keeping food warm and fresh) improves customers food experience;
• Sustainability: contributing to solving the plastics issue.

These services are realised by making use of technology and experience from our venture in Indonesia. We leverage our knowledge of reusable containers and our tracking technology, which our venture Cupkita is currently powering in Indonesia. The learnings from the app to track cups and deposits amongst consumers and restaurants will be used and adapted to the Chilean context. We will further develop a set of reusable food containers (coffee mug, hot food bowl, salad bowl, soup container, among others) with input from our end users, so that each product fits the market needs. For this, several factors will have to be studied to define materiality and design, these include look and feel, thermal isolation, resistance, size, weight, sanitary issues, and price. To do this we will work with industrial design students from local universities to receive propositions that will be reviewed with experts.

We use a smart logistics processes to minimize transport of reusables on their way back to the source. For this some options will be analyzed to get the best solution for customers and restaurants, and we’re working with existing delivery processes of our pilot partners in Chile, to test how the reverse logistics can be implemented in a most efficient manner.

Our solution allows restaurants to stop using single-use plastics. This is an innovative new approach to the plastics problem because we are actually changing the system. Most solutions to single-use plastic packaging are looking into alternative, often biodegradable, materials for the same single-use packaging. This has, among other things, the risk of increased land usage and the perpetuation of the disposable habit. Our solution prevents the use of single-use packaging in the altogether. Recycling initiatives are important for cleaning up the mess at the end of a value chain, but we believe we should tackle the issue at the source and create the change needed to dispose of single-use packaging altogether.

Our innovation is unique because:

• Globally, small reuse initiatives can be found, but thus far few of those initiatives have been proven and scaled. Given our track record in reusable packaging in Indonesia and our extensive knowledge of the Chilean culture and habits, we are equipped to design the business in such a way to have the best customer solution fit.
• The food delivery sector is enormous in Chile and Latin America, and growing. Currently, it’s all based on single-use packaging, therefore offering a reusable alternative is revolutionary.
• We have an innovative service model, as we will set up the smart reverse logistics behind it and can potentially work with a big delivery business to strengthen our proposition, making it as efficient as possible.
• It makes clients (restaurants) and consumers (people) better off.

Single-use packaging as the default solution for food delivery and takeaway has enormous negative impacts on society. Hula is creating a fully circular system in which packaging is reused for its full functional life, after which its materials are recycled to produce the next generation of Hula packaging. This results in a minimization of single-use plastics, and less plastics polluting land and oceans.

Our activities are: providing reusable packaging; offering a smart tracking system; operating the reverse logistics service. After the first year we expect that over 200 restaurants will be using Hula, resulting in over 2000 of our reusable containers in active use; thereby, preventing the use of 6000 disposables a day. Short term resulting in a significant reduction of plastic use with participating restaurants. Translated into less litter in the streets and growing awareness among customers.

Medium term we expect the growing of awareness to spread beyond the direct customers and make an impact with the broader population of Santiago and later Chile and the rest of Latin America. In addition to reduced litter in the streets the reduction of plastics will start to limit the growth of the illegal landfills in vulnerable communities.

Long Term we expect a rise of competitors. This will lead to the adoption of our or similar systems by more customers and will make a significant impact on the amount of plastic that is discarded. Less affluent communities will see a direct impact in their, now litter free, living environment

Since Hula is currently a prototype, we are not actively serving clients. After six months of piloting with a limited number of restaurants we expect to end year one with a clientele consisting of at least thirty restaurants and a daily food delivery service, since these have already expressed their intention to start using our solution. In terms of consumers this translates to approximately 6000 users. In five years we estimate that over 100,000 consumers will be receiving food in our reusable packaging amounting to a clientele of nearly 500 restaurants.

The environmental impact of our solution can easily be measured, every meal sold in one of our reusable containers is a meal that would otherwise have been sold in single-use packaging, which can be measured in kilograms or cubic meters of packaging saved from disposal. The effects that this will have on the wider community is harder to measure but is expected to be very visible and have a high social impact. To take Santiago as an example, there are currently 73 illegal dumping grounds in Santiago (image) that are mainly located in more vulnerable communities and neighbourhoods. The east of Santiago, home to a more affluent population, has none whatsoever. Furthermore, the streets of many communities are littered with plastic food packaging leading to unhealthy living conditions in areas that are not near illegal landfills. The elimination of both these dumping grounds and litter in the street would have immeasurable potential to improve lives of over 1.5 million people in Santiago. This positive impact translates to other cities, and/or rural/seaside communities as Hula expands.

Besides these impacts Hula aims to offer opportunities of employment to vulnerable groups, when setting up its logistic and cleaning operations, that can also be easily measured by number of employments generated.

We envision that we set the new norm in Chile and Latin America by showing that it is possible and convenient to make use of reusable containers as well as reusable packaging for food delivery and to go. We strive to disruptively change the food industry and inspire other companies to come up with similar business models that phase out single-use plastics.

To properly scale, our goal within the next year is to build a solid relation with at least one big delivery company (e.g. Rappi) and supply all their partner restaurants in Chile with our products.

In five years, competitive allies will have brought similar models in place. The big delivery services in Santiago will have switched to reusable packaging and for many restaurants and consumers the reusable containers will be the new norm, so they will value the comfort it brings. By showing that reusable packaging is possible and that it generates profitable business models, we will also inspire other sectors in Chile and Latin America to switch away from single use and change their business models into reusable packaging. Therefore, in time the enormous increase of single use plastics will be put to a halt, and less plastic will enter soils, landfills, and oceans. This trend combines with an improved recycle technology which will combat one of the worst challenges of our era and will improve the lives of many currently living in unhealthy conditions near illegal landfills, or at littered streets or beaches.

The demand for our solution is real and substantial, currently we need financial resources to optimize and scale our solution. In addition, we have the following barriers to overcome:

• Financial: the pricing needs to be set at such a price point to ensure that the product fits the needs of the clients (restaurants) and consumer (end-user).
• Technical: we need to optimize our prototype containers to serve different types of foods and being able to maintain the quality of all these types of foods. In addition, we need to keep the models of containers limited, as to not complicate the reversed logistics.

• Logistical: reversed logistics can become very complex if incentives and drop off points aren´t properly considered when scaling.
• Legal: Main barriers will be hygiene legislation, as we would need to ensure the food boxes are washed in a proper way in order to ensure the hygiene standards are met in Chile.

• Customer incentives: Incentives are needed to ensure that boxes are kept in the system and can be reused. Otherwise they could end up as single use food boxes.
• Market: Entering a well-established market (food delivery), we need to ensure we can work with existing players in this sector.

• Financial: We’re testing different pricing methods and price points to ensure an optimal fit with customers and ensuring a profitable and sustainable business model;
• Technical: we’re piloting and testing the optimal containers for different types of food, hence improving the technical characteristics of the packaging. Tests will be done with restaurants, delivery companies and consumers to proper address the problem and charge a fair fee for it to fit their needs;
• Logistical: We need to further test how to optimize the logistics before scaling, in combination with ensuring that the smart tracking app from Kupcita can be configured to the Chilean context;
• Legal: If we will provide the washing services, we’ll embed hygiene rules in our process. For the restaurants, washing themselves, they already need to comply with those rules and hence need to continue with this;
• Customer incentives: Different incentive options will be tested, and we’ll introduce an incentive scheme to ensure consumers will return the containers, so they can be redistributed to restaurants;
• Market: we’re in conversation with big food delivery companies in Chile (and Latin America) to explore how we can combine our complementary skills to bring this innovation to scale.

We will set the new norm in Chile and Latin America by showing that it is not only possible but even convenient to use reusable packaging for food delivery and takeaway. We strive to disruptively change the food industry and inspire other companies to come up with similar business models.

Our goal within the next year is to build solid relations and operations in Chile; including formal partnerships with many restaurants and potentially a big delivery company. Enabling us to scale within Chile and expand to the rest of the Pacific Alliance countries (Perú, Colombia and Mexico) in five years. The plan is to test and scale Hula in Santiago and then Chile for the first two years, once profitability is reached, initial market analysis in Pacific Alliance countries shall be done. The local government agency called Prochile (in charge of assisting local companies with foreign expansion) will help with the initial steps abroad.

By showing that reusable packaging is possible and generates profitable business models, we will also inspire other sectors in Chile and Latin America to switch away from single-use packaging and change their business models. Therefore, in time, the enormous increase of single-use plastics will be put to a halt, and less plastic will enter soils, landfills, and oceans. This trend combined with improved recycling technology will combat one of the worst challenges of our era and improve the lives of many currently living in unhealthy conditions near illegal landfills, or at littered streets or seasides

The Hula team is part of Enviu, a worldwide impact-driven venture building studio. We run issue-driven programs to build multiple ventures to redesign value chains. In Enviu Chile we develop ventures to create a circular food economy, e.g. eliminating waste. Enviu has a track record in building circular ventures. For example, in Indonesia we built a venture offering reusable cups for TO GO to switch away from single-use plastics. 

We strive to build on our existing experience and used our learnings but also investigated the specific context. We concluded that delivery is very important in Chile and that we need to offer a full-service proposition. 

Hula is invented by Enviu’s venture builders: we ideate and develop innovative business models and start with the validation of the model. Once a model becomes a full venture and validation starts at larger scale (e.g. larger-scale pilot) an entrepreneurial team will be recruited. Venture builders work as part of the entrepreneurial team. However, once the venture is established in the market and ready for full growth, the venture builder will step back to build a new venture. The entrepreneurial team remains in place to run the venture. Of course, in close contact with Enviu.

The solution is being launched by our venture building studio. Two people based in Santiago and one circularity expert in the Netherlands are working on it part-time. This team will test the product for the initial six months. During the first larger-scale pilot a fulltime entrepreneur will be added and later two more: in total a CEO, a CSO and a COO. They will be assisted in the logistics and cleaning of the containers by in total two to four people. For the design of the packaging and the smart solution development we cooperate with third parties.

Being part of Enviu we all are strongly impact-driven and want to disruptively change the current plastics economy. We have a mix of seasoned entrepreneurs with a deep understanding of circular business modelling and how to make a business commercially viable, with the commercial expertise to close deals, find new clients and new markets and ensure a product can meet market needs. We also have experienced partnership builders, with a strong network in the Chilean business environment and a deep understanding of the regulatory field.  We have a track record in circularity and set up various successful circular business models, amongst others to reduce plastics waste in Indonesia. We know what it takes to set up a new business with an impact goal. With our broad network of partners, we are able to bridge the pioneer gap of impact-driven start-ups.  

Our team consists of:

Nils Lindeen de la Fuente

• Marketing & sales
• Operations, e.g. logistics, finance
• Relation management with restaurants
• Development & validation of the circular business model
• Packaging development in cooperation with designers

Dieuwertje (Didi) Nelissen

• General management
• Partnerships with e.g. delivery services, government
• Development & validation of the circular business model
• Smart system development in cooperation with software developers

Marieke Lenders

• Circular economy expert
• Development & validation of the circular business model
• Liaison with existing ventures that reduce plastic waste worldwide, related to Enviu and in general

We are currently working with various organisations vital for tackling this problem. Since our solution focusses on the food delivery industry in Santiago, we are working with the key players in that sector. Rappi, one of the three big delivery apps in Santiago, is involved in our project as a partner to bounce ideas off during our prototype phase. Furthermore, we are partnering with a variety of restaurants who provide us valuable input and will participate in our pilots. We have a dedicated pilot partner to combine our strengths and offer our customers a holistic proposition: Menu-to-go. Menu-to-go is a service that delivers meals to the same customers on a daily basis

Our key customers are restaurants offering food delivery and takeaway. These restaurants will pay for a license for the use of a number of Hula containers, this licence will guarantee them that Hula will make sure that they start every day with that number of reusable containers in their restaurant. This licence fee will cover the cost of the number of containers needed and the additional ones needed for reverse logistics system to always have enough supply. After that they will also pay a monthly fee for our services, which will cover the costs of the reverse logistics, cleaning, and delivering containers. The restaurants will receive a full-service, with high quality food containers and logistics taken care of for them. Their use of Hula will fully eliminate single-use plastics from their business and save them the recurrent costs of purchasing single use packaging, thereby saving on costs.

Even though our core proposition is based on B2B sales, the nature of our reverse logistics, means that consumers are another key customer and beneficiary. Consumers will pay a deposit to use the reusable packaging that will be fully refunded into a digital wallet, once they return the container. This credit can then be used as the deposit for the next order. Furthermore, rewards can be earned when containers are returned. Also, the testing and validation period will allow us to further study our key customers and beneficiaries, so we can adjust our product and service in a better way to serve them.

Our business model is based around providing a service that benefits our customers (the restaurants), their clients (consumers), as well as being a sustainable model for us. After the first investments needed for further research and development of the reusable boxes and the adaptation of the reverse logistics system to the Chilean market during the first six months, we expect positive cashflow after reaching the required scale within the following year. Until this point, we are backed by the following financial and in-kind support:

• Enviu has a mother company / Enviu HQ that provides in-kind support in terms of expertise (circularity, business models, track record in ventures), such as the ventures in Indonesia focusing on reusable food /drink packaging. In addition, the mother company offers marketing support, back office support, etc.
• Enviu Chile can provide co-funding to cover the testing and pilot costs before the business model is fully up and running.

  As soon as Hula has matured enough to scale, every new customer will immediately cover the costs of their own reusable containers in the form of a licence to always have a certain number of containers on their premises. After that, our operational costs will be covered by a monthly fee. This arrangement will be beneficial for restaurants as the total costs over time are lower than those of constantly buying single-use packaging. While the end-customer benefits from having sustainable options available at no additional cost and an upside of receiving rewards for returning their packaging.

IDB Group could help us overcome the barrier of the initial investment for revising the food containers, developing our technology and scaling the pilot. Hula does not need a big upfront investment to start and it will recuperate the money spent on food containers by selling licences for the use of the containers to restaurants. In spite of this, a small investment is still needed to scale the pilot. Furthermore, the network of IDB could help us connect to potential partners and customers that share our goals, also can help grow Hula and be part of the change to a food economy without plastics. Finally, we see Chile as a starting point in a larger plan to establish a food culture that does not involve single-use plastics in all of Latin America. The experience of IDB as well as their presence throughout the continent would be of immense value to our plans to expand and thereby maximise our impact.

• Restaurants: initially we would partner with a few restaurants located near each other in the east of Santiago, where we would offer our products for free in order to test their response. After some testing we would start growing this to a whole municipality, neighbour municipalities, and finally the whole city. For this, our product would generate an added value to their brand because of the environmental awareness it raises, and also because it would save them money.
• Delivery Services: for the larger implementation we would be very interested in partnering up with them. Currently we are in talks with Rappi, and we have used their input to develop our proposition, but eventually we would like to add more delivery services as partners (UberEats, Cornershop and Pedidos Ya).
• Dark Kitchens: they host spaces where several food concepts prepare and deliver through delivery services, so it is the most efficient place to offer our product. For them we could install a cleaning area for reusable containers and offer the service to their clients, therefore improving the overall service of dark kitchens.
• Local Manufacturers: the quality of our food containers is important, as well as that the materials they are made of are sustainably sourced and produced locally.
• AB Chile and Plastics Pact Chile: since one of our missions is to minimize use of plastics.
• Governmental Entities: such as municipalities or ministries, so we can fit our solution into the bigger plans for recycling and reuse.