Two things struck Sebastian Stricker back when he used to work for the UN World Food Program: how little it cost— just 40 euro cents—to feed a child in a developing country for a day, and that there are still hundreds of millions of kids suffering from severe hunger.
“At the same time, there were two billion people who had smartphones and we're able to pay a couple of hundred dollars to have a smartphone phone, but we're still unable to feed those children,” Stricker told Yahoo Finance UK.
That’s when he had the idea for Share The Meal, an app launched over three years ago that lets people donate €0.40 simply by pressing a button to donate a meal to someone in an emergency situation or facing hunger.
“There are about 40,000 meals donated per day,” Stricker said. The app has grown to include new functions, like a type of credit card, that can be loaded up and allows people to go to food distribution points and decide for themselves what food they need, informing the donor when their contribution has been redeemed.
In early 2018, Stricker set up the social business Share, based on a different model but the same goal.
The 40-strong team in Berlin launched three products — a water, an organic nut bar and a soap — in partnership with German supermarket chain Rewe and pharmacy chain DM. They’re now selling 10 products through these stores.
“Imagine if you’ve just landed in a refugee camp...it’s important that you have access to clean drinking water and hygiene,” Stricker said. “For every bar you buy, we distribute a food package, for every soap, we distribute one soap, with the water it’s a little different, we don’t distribute water bottles, we build wells.”
Share has sold over 8 million products, and German shoppers so far funded more than 50 wells and donated over 2.5 million meals.
Trackability and transparency is at the core of Share, which is essential in the age of social media and accountability, and especially so since trust in big charities has been damaged by a number of scandals.
Share is a benefit corporation, and as such needed to get certification that its business model was focused on creating social impact, rather than just making a profit. Stricker says they have received several million euros in three investment rounds so far, and he is expecting to make profit “soonish”.
“Amazingly we were cashflow-even in the first six months of this year, which surprised us,” he said, adding that at some point they do want to be profitable, and that will be a matter of scaling the number of Share products and growing sales. “We hope that the social intervention in itself is marketing and convinces people to buy the products.”
Germany catching up
German consumers overall are embracing sustainable, eco-friendly, or socially sound products. Fairtrade International’s 2017-2018 report said retail sales of fairtrade products in Germany amounted to €1.3 billion in 2017. A 2018 report from the German national statistics office predicts that certified sustainable products will account for over 30% of market share by 2030.
“There are a lot of investors that are interested in the social perspective of businesses,” said Stricker. He feels there is a growing awareness that socially responsible startups could actually be more competitive, since having a social mission gives them a USP, differentiates them in the marketplace, and creates above-average consumer loyalty.
However, according to Markus Sauerhammer at the Social Enterprise Netzwerk Deutschland (SEND), Germany has a long way to go before it catches up with its EU neighbours to become an attractive country to set up a social enterprise.
Sauerhammer points to France, which has committed to a billion-euro fund for the social business sector over the next five years, and the UK, where independent social investment institution Big Society Capital has pumped over $1 billion into social-enterprise investment.
In SEND’s latest startup-monitor report, over 60% of respondents in Germany said initial and follow-up funding was a major hurdle for them.
“While [economy minister] Peter Altmaier promised a renaissance of the social market economy at the beginning of his term of office, in practice the innovation and funding policy is more likely to result in a renaissance of Manchester capitalism,” Sauerhammer said.