The company’s global mission is to “unleash the potential of waste”. With an initial focus on food-waste, Phenix has set up a digital platform that works as an intermediary connecting waste “suppliers” (mainly retailers) and waste receivers (mostly charities). Through this service, Phenix prevents food close to expiration date from being wasted, and turns such waste into food donations. Today, Phenix offers a wide range of services in order to implement concrete actions for the repurposing of end of life products.
While the company’s strategic position appears quite robust, a few points of attention need to be considered: the business model remains dependent on favorable regulations, it remains labor intensive and new market acquisitions require large investments.
As a multisided platform, Phenix has developed a distinct pricing scheme to address each side of the platform. Phenix’s revenue model is based on monetizing the supply-side of the platform, through a fixed commission on the waste-management gains achieved by distributors using the platform. On the other side of the platform (demand side), Phenix organizes free access to food for social charities, thus achieving a social benefit and facilitating the growth of the platform.
The French legal framework offered a favorable context for the development of a profitable business model for Phenix. As part of this regulatory framework, an existing tax incentive introduced in 1981 under the “Coluche law” providing for a 60% tax deduction for food retailers and producers who donate foodstuffs instead of generating waste. Through its secured supply chain, Phenix organizes traceability, secures savings for retailers and can charge a commission on the total savings on waste management, making the business model viable.
Managerial enablers: the case highlights the need for specific innovation skills and dynamic capabilities. As regards internal capabilities, the company combines excellent execution skills (operational excellence, fundraising capabilities) with high innovation capabilities, appearing as an ambidextrous organization.
Beyond internal capabilities, the company deploys important external capabilities, acting as a “platform leader”, as an actor able to reshape and orchestrate relations (for example between supermarkets and charities) within its business ecosystem
“We must position ourselves as an assembler, a dealer, a pioneer and a federator actor. It is our mission to support the other players and make them want to change their model…”
Circular Economy Business Models
Phenix achieves ‘triple bottom line’ value creation, by helping retailers to reduce the cost of food waste (economic benefit), enabling charities to get free access to food donations (social benefit), and helping society to reduce the overall amount of food waste produced in our economic system (environmental & circular economy benefit). It is, therefore, an example of a “mission-driven platform”, built on a hybrid model that combines business, social and environmental value creation.
Presently, Phenix works with more than a thousand supermarket clients, has 100 full-time employees and helps to distribute over 40,000 meals per day.