San Francisco food delivery startup Munchery throws away 16 percent of the food it makes

Munchery

San Francisco food delivery startup Munchery is reportedly throwing away so much of the food it makes, it's almost quadruple what some restaurants waste. 

According to a new piece out from Bloomberg's Eric Newcomer, the amount of food the startup throws away has begun to raise eyebrows among food waste experts and former employees alike. While typical restaurants waste between 4% and 10%, Munchery is wasting 16% of the food it makes, Bloomberg reports. 

Financial documents obtained by Bloomberg show that Munchery has been massively overproducing food for years: Between September 2014 and July 2016, Munchery's kitchen in San Francisco made about 653,400 dishes that were never sold. The excess food was both donated to charities and thrown away, according to Bloomberg.

Bloomberg calculated that over a two-year period, Munchery threw out $1.9 million worth of food, based on an average dish costing $2.96 during that time period. 

Munchery sent Business Insider a statement regarding the reports, which you can read in full below:

Munchery doesn’t waste food. Anything not sold is donated at the end of each day to organizations that deliver them to the homeless and other residents in need. We take deep pride in this.

We try to keep overproduction to a minimum. We have made progress as a startup but we are always trying to do better.

The proper amount of production is a challenge that all food businesses deal with. Restaurants, catering facilities, and even online platforms like ours have to determine how much food to produce ahead of demand. We predict customer demand on a weekly basis, and execute our menu ahead of customer orders. We are continuing to try to find the right balance.

Munchery is already the leading company in the fully integrated food preparation and delivery space. We are profitable in San Francisco, our most mature market, and contribution margin positive in our three other markets. One would be hard pressed to find a competitor that could make these claims. And even more importantly, our customer base and revenue are growing.

We are extremely excited for the future of our company under the leadership of our new CEO James Beriker.

The startup — which was founded in 2010 by Vietnamese immigrant Tri Tran, who was just replaced as CEO — has raised more than $118 million in venture capital funding and was most recently valued at $300 million. But the company has gone through hard times lately, according to Bloomberg, and may be looking to some of its current investors, which includes Shervin Pishevar and director Jon Favreau, for more funding. 

For more on the challenges facing Munchery, head over to Bloomberg to read the complete piece. 

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