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Dadar, a busy neighbourhood with narrow lanes in central Mumbai, is home to many decades-old restaurants serving a wide range of foods–from dosa to pav bhaji to gobi manchurian–all heavily infused with spices.    

Inside these restaurants, there’s a table with plastic containers stacked on either side. Orders coming through food-delivery apps such as Zomato and Swiggy are fulfilled here. These containers—from 50-millilitre ones meant for sauces and chutneys to 1-litre ones meant for rice dishes, curries, and dosas—are made of polypropylene, a complex but food-safe plastic, and branded with the restaurant’s name and logo.

“I operate on paper-thin margins. If I introduce any fancy packaging, I won’t be able to run my business,” says the second-generation owner of one of these restaurants. The 55-year-old owner requested anonymity as their delivery orders—over 30% of the restaurant’s revenue—come via Zomato and Swiggy.

The “fancy” packaging means paper and bagasse containers that decompose easily and make for a sustainable alternative to plastic. However, their adoption remains low due to the high cost—at least double that of plastic containers—making food delivery and plastic inseparable across the country.

This puts the onus on foodtech platforms to make deliveries sustainable. In April, Zomato introduced “100% plastic-neutral deliveries plastic-neutral deliveries Zomato Blog Introducing 100% plastic neutral deliveries Read more , which means it would “voluntarily” recycle more than 100% of all plastic utilised in food-delivery packaging.

The move is part of Zomato’s environmental, social, and governance (ESG) narrative. The exercise is crucial for securing investors’ confidence as its shares continue to trade below the issue price over concerns about the fundamentals of its food-delivery and grocery businesses.

Jumping ship

After the one-year lock-in period ended on 23 July, institutional investors such as Tiger Global, Sequoia Capital, and Moore Strategic Ventures sold their shares in the open market. Uber, too, sold its entire 7.8% stake in August as Zomato’s stock price crashed.

Despite its valuation being more attractive than in the months after its listing in July 2021, none of India’s nine ESG mutual funds is currently an investor in Zomato, according to data provider Morningstar. 

The food aggregator has calculated that it needs to recycle nearly 20,000 metric tonnes of plastic waste annually to achieve plastic neutrality. Though, how it arrived at the number is a convenient, if not crafty, exercise, possibly with an eye on sustainable funds. Zomato executed 535 million orders in the year ended March 2022. 

AUTHOR

Shashwat Mohanty

Shashwat covers cleantech and internet. An alum of St. Xavier's College (Bombay), SCMC, and ACJ, Shashwat has previously worked at The Economic Times and Meesho. When he isn't missing deadlines, Shashwat likes attending live music gigs, discussing baseball, and watching Parks and Rec with his partner 🏳️‍🌈

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