How does OLIO make money?

Why does OLIO need to make money?

OLIO’s mission is to reduce food waste in the home. And we’ve set ourselves an enormous goal - to reach 1 billion OLIOers by 2030. That’s because reducing food waste is the single most powerful thing humanity can do in the fight against the climate crisis ( ref). To achieve our goal we need to have a sustainable business model, which means generating enough money to cover our costs, so we can continue to exist.

Is OLIO a charity or a business?

We chose to set OLIO up as a business, not a charity. That’s because when we looked at organisations that had scaled to enormous impact very quickly, we saw hundreds of examples of businesses achieving this, but very few charities. We also believe that profit with purpose is how businesses must operate for there to be a fairer, more sustainable future for us all. So we want to help prove that profit with purpose (i.e. giving equal consideration to people & planet, as well as profit) is not only possible, but preferable to business-as-usual.

Why isn't OLIO a non-profit?

Our ambition is to connect 1 billion OLIOers to help solve the climate crisis by 2030. Achieving this scale and pace of growth is going to require significant investment e.g. in marketing. Given that taking out loans isn't an option (as we don't have sufficient short-term revenues to pay them back), we need to raise capital some other way. To date we've not managed to find anyone willing to give us bucket loads of money for free (unfortunately!), so that means we need to find investors and eventually, provide them with a return. This requires us to be a business. We believe that profit with purpose can be incredibly powerful, and would rather be a business connecting 1 billion people to live more sustainably, than a well-meaning charity or non-profit connecting a few thousand people at best.

OLIOer Daphne said it better than us in a post on the Forum...

"What is wrong with a company making a profit in the first place? For example, should a company that collects and recycles plastic not make a profit because they are a recycling company and that would be against their 'ethos'? Should an electricity company that sources renewable energy not make a profit because petrol companies make a profit too? We are used to linking profit with corruption and evil but we need to move on from that. We complain about the fact that there aren't enough 'good' companies out there but then also complain about good companies making money. I believe companies like Olio (so far) are the ones that should be making a profit and not the evil ones. There are more than enough evil rich companies - the world has had enough of that."

How much does it cost to run OLIO?

The costs to run OLIO are substantial, and growing. We have a team of people who design, build, test, monitor, measure and maintain the app; who promote OLIO and spread the word about food waste and sustainable living across multiple media channels; who sell our Food Waste Heroes Programme to businesses, manage the tens of thousands of volunteers that are required to deliver the service every day, and continue to develop the systems and processes that underpin this; and who solve our users’ problems and ensure that all OLIO systems & processes are compliant with our policies and the law.

In addition to our core team, we also pay for servers that host the app and hundreds of 3rd party software services that enable our app and teams to function effectively; we also have to pay for legal support, accountancy services, insurance, translation services and PR. And we invest in marketing to bring new users into our community so that we can grow, and have more impact. Although we’re incredibly resourceful in everything we do, we inevitably incur substantial costs, which increase as OLIO scales, that need to be covered.

How does OLIO make money?

OLIO started making money by charging larger businesses for the services we provide via our Food Waste Heroes Programme. Unfortunately the revenues generated via this programme are nowhere near enough to cover our cost base, and so we have developed an additional revenue stream which is providing extra features in the app for a small subscription fee. A fundamental principle is that the core OLIO app (neighbour-to-neighbour food sharing) will always remain free and available to all.

Is OLIO profitable?

No, OLIO is not profitable. Although we generate revenues via the Food Waste Heroes Programme, this only funds approximately 30% of the company's monthly expenses, leaving a significant shortfall. To date we’ve made up for this shortfall by raising multiple rounds of financing from private investors who support our mission and vision for the world. Without our investors OLIO would not exist, so we’re incredibly grateful for their support.

When will OLIO be profitable?

Given our goal of 1 billion OLIOers by 2030 so we can play our role in solving the climate crisis, all revenues generated for the foreseeable future will be invested straight back into growing OLIO and saving more food and other household items from waste.

Why don’t you make money with advertising?

The advertising model used by the digital giants is well documented as broken and deeply corrosive to individuals, society & democracy. This video provides a good overview. As a point of principle therefore, we prefer to avoid a monetisation model that requires us to turn our users into the product. Plus, on a more practical level, the monopoly the tech giants have established in digital advertising makes it very, very difficult to compete. However, once we’ve built more scale, and if we still cannot see a path to profitability from our current revenue streams, then we may well experiment with a different, more positive, advertising model based on local advertising and sustainability brands.

Why don’t you ask for donations?

Over the years we’ve researched the donations model extensively, and have experimented with it too. Unfortunately we have found that not enough people donate enough money to make this model viable.

Why don’t you sell merchandise?

We do have an OLIO shop, and whilst it could be improved significantly, the revenue potential isn’t nearly enough to cover our costs.

Why don’t you apply for grants?

We have applied for, and received a number of grants. However these have been small scale and on-off and so do not represent a sustainable revenue stream.

What about people who are struggling financially?

A fundamental principle we have is that the core OLIO app (neighbour-to-neighbour food sharing) will always remain free to all. The features that are included in the Supporter bundle have been deliberately selected to ensure that no-one is prevented from using the free version of OLIO, which continues to give away millions of pounds of free food every month.