The food packaging revolution is under way: why we invested in Pyxo

By Ivan Farneti and Louis Magaldi-Charles

1. Packaging is dead, long live packaging!

By the end of 2022, France will be the first European country to implement the anti-waste Law, which will prohibit single-use packaging in fast-food restaurant chains. According to the Ellen MacArthur Foundation, 80% of ocean pollution comes from plastic packaging and 10 million tons of waste are thrown away in the oceans every year. As a pioneer in the European food packaging revolution, Pyxo is committed to make reusable packaging the new standard in the Quick Service Restaurant (QSR) industry.

Packaging is a gigantic market. More specifically, food packaging represents a €50Bn industry in Europe alone. If you combine US and Europe, Pyxo targets a TAM of up to €270bn. Beyond the significant size of this market, consumer awareness is a powerful driver of growth. In France, over 80% of consumers state being very concerned about the impact packaging has on water pollution, marine litter, natural resource depletion and air pollution (see McKinsey Packaging survey below). A consensus also seems to emerge across Europe regarding the environmental impact of packaging as the vast majority of European consumers point out marine litter as a direct consequence of excessive product packaging.

Source: McKinsey Packaging survey 2020

Although consumer awareness is a necessary condition to transform this industry, it might not be sufficient as single-use packaging is currently a cheaper option. This is due to the fact that its cost does not price-in the value of the negative externalities in terms of environmental deterioration and pollution. The new European legislation, expected to extend from France to the rest of Europe, and from the on-site consumption to the food take away sector, is therefore the compliance hammer needed to make this change happen.

2. The right player at the right time

So, within a few years, all players in the QSR industry in Europe would need to transition towards reusable packaging solutions because of regulation and consumer demand. However, managing reusable packaging for millions of meals a day is an impossible switchover without the support of technology due to:

• Packaging management: tracking reusable containers on-site and pairing/unpairing the containers with customers IDs (credit cards, loyalty cards, etc.) require a bespoke technology stack combining hardware and software solutions never tested at this scale and cost level
• Logistics: coordinating the different parts of the value chain (shipping, washing, inventory) requires a data platform where the information can be processed and flow easily in real time, as on-premise storage of containers is costly and errors can affect revenues and reputation
• Payment: making sure that containers will not be stolen or lost requires an automated deposit scheme, while some customers may want to “keep” branded containers and should be allowed to “pay for it” at the right price. This will become even more critical once the legislation extends to the food delivery market
• Customer experience: managing millions of interactions with customers per day when containers are paired or unpaired requires a seamless B2C interface that can push notifications to customers at every touchpoint and be integrated with both in-store kiosks and POS infrastructure.

Pyxo is developing a unique tech platform tailored to the needs of large restaurant chains whose large volumes of containers require a fully integrated solution to manage all the different parts of the value chain mentioned above.

3. A skilled, visionary and impactful team

When we first met Benjamin & François, we left the room feeling as though we had just met with the future! We were clearly impressed by their powerful vision and their ability to convince the ExCom of several large food corporates in a short period of time with limited resources. They started Pyxo in 2018 before any sort of regulation was in place with the ambition of transforming a large industry that was not sustainable. Some might call it luck, but this demonstrates some clear-sightedness about the inevitable direction of the market.

The team is highly complementary and brings together diverse skills: Benjamin is a tech founder who founded Moore, the first USB drive with unlimited storage — sold to Huawei; whilst François has extensive experience in working with C-levels as a former McKinsey consultant. Romaric is an experienced CTO who was previously CTO of Atipik for 5 years, a collaborative software company for incident ticketing in industrial production environments.

The founders are committed entrepreneurs with the long-term vision that technology can help reduce water pollution and marine litter caused by food packaging. We are starting a journey with them with the ambition of reducing 100,000 tons of plastic by the end of 2023. As we write, Pyxo’s solution already allows to save up to 580g of CO2 emissions per cycle compared with disposable plastic. And it’s only the beginning!