Agung Saputra: Indonesia Pollution Crisis, 48 Million Tons of Food Waste (170kg Per Capita) & Surplus Marketplace App - E432

Agung Saputra, CEO & Founder of Surplus Indonesia, and Jeremy Au talked about three main themes:

1. Indonesia Pollution Crisis: Agung flagged that Indonesia is one the top 3 polluters in the world: #2 plastic polluter, #2 food wastage and #1 most air polluted city (Jakarta). He highlighted the lack of regulations and public awareness as major barriers to effective waste management for the country's severe environmental challenges. Indonesia's reliance on “ticking time bomb” landfills (rather than incineration or recycling) poses significant safety hazards, e.g. a landfill explosion in Bandung led to fatalities. Deforestation for urban development has led to significant biodiversity loss, e.g. the new capital city of Nusantara in Borneo. He underscored the need for comprehensive governmental action and community involvement to improve environmental practices​​.

2. 48 Million Tons of Food Waste: Agung addressed the rapidly-rising problem of food waste, driven by its large population, increasing affluence and cultural attitudes (e.g. viewing an empty plate at the end of the meal as impolite). Harvard research shows that 20M people (8%) in Indonesia are unable to meet their nutritional needs every year, and stunting affects one-third of children under five years old. However, 48 million tons of food worth $39B USD (~5% of Indonesia's GDP) is lost annually, which is equivalent to 170kg of food waste per person. Not only would redirecting edible food to food banks support people experiencing hunger and chronic malnutrition, but it would also help reduce greenhouse gas emissions produced from food ending up in the landfill. He warns that food waste will continue to increase as Indonesia gets larger and richer unless effective interventions are implemented.

3. Surplus Marketplace App: Agung described how Surplus Indonesia operates as a marketplace for surplus food, connecting consumers with discounted food items that would otherwise go to waste. The platform works similarly to Foodpanda, allowing users to find and purchase surplus food from local businesses via an app. Surplus Indonesia has grown significantly, reporting a threefold increase in revenue in 2023, which indicates a rising demand for sustainable practices. He also discussed the company's approach to ensuring food safety and quality, including a two-strikes policy for vendors who fail to meet standards. He highlighted that the primary customers are younger Indonesians, who are more environmentally conscious and willing to support sustainable businesses​​. He explained that the demographic shift is reflected in the increasing number of sustainability startups in the country, from just a few in 2019 to nearly a hundred by 2024.

Jeremy and Agung also talked about managing different types of waste and recycling streams, growth in sustainability-driven sectors, and the increasing involvement of young Indonesians in environmental issues.

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(01:59) Jeremy Au:

Hey, Agung, really excited to have you on the show. You're here to talk about sustainability, but more importantly, within the context of Indonesia. So could you share a little bit about yourself?

(02:09) Agung Saputra:

Hey Jeremy. Thanks for having me. So I'm Agung Saputra, the CEO and founder of Surplus Indonesia. I come from an environmental background. I was raised in a remote area in Papua, so I experienced a huge education gap and food scarcity at the time. So when I moved to the capital city of Indonesia, Jakarta, and then I saw a lot of surplus food that are still good, still edible and untouched, has been thrown away in the bin. So I'm eager to learn the environmental stuff in my college and my master's. So that's why, after I passed my master's, I created Surplus Indonesia in order to prevent the surplus food not to be thrown away or end up in landfills, but it can be consumed in a half price by the customers.

(02:55) Jeremy Au:

So why did you decide to work on sustainability? Is it a big problem in Indonesia?

(02:59) Agung Saputra:

Yeah, after I pursued my master's at Imperial College London, the UK, I had dilemma about whether I had to stay to work as an environmental consultant in the UK, or I can go back to Indonesia and then start Surplus Indonesia, but the main driver for me to build Surplus Indonesia is because Indonesia is defaulted as the second largest food waste team in the world. And it kept being mentioned when I did my master's. So it kept annoying me because Indonesia has the second-largest food waste team in the world. I was asked by the teacher how Indonesia can become a champion in every way.

So that's why it drove me to want to contribute to Indonesia. So I just went back in 2019 and trying to gather the community youths that, has the same vision to fight food waste in Indonesia and then, created Surplus Indonesia during the pandemic.

(03:45) Jeremy Au:

Could you share more about what are the problems that Indonesia faces in sustainability?

(03:50) Agung Saputra:

Yeah, there's a lot. So every waste, you can name it. We became at least the top three in the world as the top polluter, ocean polluter, food waste and food loss or the top electronic waste as well in the world. Why? Because, first of all, we have no specific regulation to manage the waste or prevent waste as well. And second of all, the awareness to fight waste in a circular economy is not so mature compared to other countries. So that's why we have homework to do.

(04:16) Jeremy Au:

Yeah. So, why does Indonesia have such a food waste problem? I mean, it's not the number two largest economy, right? Why is there so much food waste?

(04:23) Agung Saputra:

Because Indonesia is one of the most populous countries in Asia. And we have a stigma in here that if we finish food in our plate, it's seen as rude. It's a misunderstanding of the culture. So that's why, people in Indonesia, if they go to the department store or go to the restaurant, they have to not finish their meals. So it becomes polite, for others to regard them that they are not very hungry. So that's why, surplus comes, in order to educate the market that, if you order something, you have to finish it because that's the way to appreciate your meals and in order to appreciate the farmers and it can prevent to contribute to degrade the Indonesia food waste contributor for the ranking.

(05:02) Jeremy Au:

And then what are the other problems that Indonesia faces in terms of sustainability?

(05:06) Agung Saputra:

One of the major, problems is biodiversity degradation, because as you know, we have so many tropical rainforests, but we're creating a new city, a new capital in Borneo. I think you have might heard of it. And so that's why our tropical rainforest is declining in terms of the size of it and it creates biodiversity degradation and it has a domino effect to other challenges for the circular economy industry in Indonesia.

(05:32) Jeremy Au:

I think there's also a lot of other challenges as well, right? There's water and air pollution as well. That's what a lot of my friends say in Asia. Could you share more about them as well?

(05:40) Agung Saputra:

Yeah, the air pollution rose. It's like a couple of months ago. We were aware, but it was too late for us when there was a huge smoke and then we could not breathe and it created a disease for everyone. And then the government panicked at the time. So they created a minor regulation for people in capital of Jakarta to use public transport, but it's too late because it didn't cure the problem. So the problem is still there until now. We got the bad air pollution due to the mining activities as well that surround our own Java Island. So that's why it needs more comprehensive action from the government to remove or move the mining activities to not close to the Java Island.

(06:20) Jeremy Au:

So I think there are a lot of different challenges that Indonesia faces in sustainability. Why are founders interested in building sustainability for Indonesia? Because I mean, there are other businesses to build, right? Like education or tech or manufacturing. I know that you hang out with a lot of other folks who are in the sustainability space. So what's your motivation for doing that?

(06:37) Agung Saputra:

Yeah. From my perspective, before I started Surplus, there were only three or four climate tech startups. So it's very niche. No one wants to build a startup because there are no regulation and the market size is not so big as the e-commerce and other marketplaces but as awareness for civil economy that is growing, for example. And now at the moment, there are so many businesses like, they created like vegan, restaurants or they created healthy lifestyles because, after the pandemic, people consider that the health and the climate crisis is very concerning. So, some of the entrepreneurs, they were thinking like, that circular economy is a blue ocean for them because it has less competitors compared to the red ocean, e-commerce, finance, and fintech. And second of all, they have passion because they experienced or have undergone the problem like maybe they were sick of air pollution. So that's why they started air pollution prevention for their startup.

(07:32) Jeremy Au:

Tell me more about Surplus, the company that you built to tackle food waste.

(07:35) Agung Saputra:

So, I mentioned earlier that Indonesian food waste is really, really bad. From my background as a scientist. So I tried to create a business model to prevent the overstock and imperfect produce by connecting the local food businesses, like hotels, restaurants, or coffee shops to sell their overstock and imperfect produce at the window time to the customer at a low price. It's like a flash sale for every nearly expired product for businesses. And it can create a win-win solution for F&B business owners and the customer to gain recovery and they can at least increase their awareness to combat food waste.

(08:09) Jeremy Au:

What has been your revenue or traction since then? How much have you processed?

(08:14) Agung Saputra:

Yeah. To be honest, we are not so like a fast growing as the other startups because there's so many complicated, challenges in Indonesia. We're still waiting for the momentum, but, I can say that in the next five years, the market is still growing because in the past four years, Surplus Indonesia experienced three to five times growth for the revenue side, for example in 2023 last year, we experienced three times growth for the revenue. So it shows that the market is increasing and the awareness is increasing as well.

(08:45) Jeremy Au:

How does Surplus work? How does it work for a customer to move the extra food from one place to another place?

(08:51) Agung Saputra:

Basically Surplus is, for example, Foodpanda for overstock or like a great food for overstock. So the customer will just download the app and then they will get notified about the surplus food nearby. They will open the app and they can choose their favorite surplus food. They can see a lot of information like how many items are left, the discounted prices, and the pickup time as well. After that, they can choose for the pickup method, whether they can pick it up by themselves at the store or using delivery services because we've been integrated with GoSend and GrabExpress as well, or they can just dine in at the hotel at a specific time. It's less than one minute and it's convenient. So people can get the item for 50% off and they can indirectly contribute to prevent food loss and food waste.

(09:34) Jeremy Au:

What were the challenges in setting it up? Is it like food quality or food hygiene going to be a big problem?

(09:40) Agung Saputra:

Yeah. That's one question to surface when we run the operation. So as the marketplace, we didn't take the responsibility for the hygiene or the food safety, because uh, the one that takes the responsibility is from the merchant side, but we have the do's and don'ts or the regulation. If the merchants want to join us, they will sign an agreement first the one that they upload is still edible and untouched. If they receive a complaint, we will freeze their account first and then we will re-educate them. But if they keep doing mistake and they receive two complaints, we will ban their account forever. So that's how we manage the quality of our services. In the past four years, we didn't get any complaints about the quality or food safety or something like that.

(10:25) Jeremy Au:

Do you think food waste is going to get better or worse in Indonesia? If Indonesia is growing 5% year on year, the amount of food consumed probably goes up more than 5%, right? I mean, it goes up by 6 or 7 or 8%. So do you think food waste is going to get worse or do you think it's going to get better?

(10:39) Agung Saputra:

I want to remind you, the rate of our, population is growing at the moment. The food waste will become higher or bigger as well. If we cannot stop to generate food waste, so it can create food scarcity and food scarcity will create hunger, and then hunger will create poverty and poverty will create criminality. We will undergo, maybe someday, food scarcity or food insecurity.

​(11:05) Jeremy Au:

Do you think young Indonesians are more into sustainability now or are they more into making money for their families, and so forth? Because recently we did a report. One of their findings was that Westerners are much more into sustainability, whereas, Southeast Asians, people are more into taking care and providing for the family. What do you think?

(11:24) Agung Saputra:

Yeah, I would say I don't fully agree because after running Surplus in the past four years, it's, so much easier to acquire the customer from the youth or Gen Z. Why? Their awareness is better compared to the millennials or maybe the previous generation because they have been exposed from maybe YouTube or social media, in the early beginning. So they know about the urge to prevent the climate crisis and something like that. If you have heard about Greta Thunberg, she's a youth that has the biggest awareness to fight climate crisis compared to our parents or compared to our friends and something like that.

That's why one of the biggest markets, is our biggest buyer. Persona in surplus is the youth or Gen Z because the way they want to purchase something or the way they want to choose services, they will consider whether that brand has contributed to the social and environmental impact or not. If not, they will not choose it. They prefer to choose the one that maybe it's quite pricey, but at least, they can contribute indirectly to that brand.

(12:26) Jeremy Au:

Could you share a little bit more about what your future expansion or product plans are?

(12:32) Agung Saputra:

Yeah we have been known as the online marketplace for overstock and imperfect produce. This year we just launched our new product. It's an offline store. It's a mini offline store in one of the dense areas in South Jakarta, in Senopati, Jakarta. We have two products for the Surplus Supermarket. The Surplus Supermarket is a white label for the supermarket's product from the FMCG that they cannot upload to our app, but they just send it to us and then we open the booth like a pop-up store to sell it to the end customers.

And the second product is Juicible by Surplus Indonesia. Juicible is a smoothie and juice bar that, it's come from imperfect fruits. So imperfect fruits that we collect from the supermarket and the suppliers that are rejected we recycle them into smoothies and then we sell them to end customers as well. So yeah, that's our product at the moment. We just run one more and turns out the track is really good and people like the smoothies from the imperfect food. So they like the story they like the impact as well.

(13:32) Jeremy Au:

And it's very cool. And I think k what was interesting is that there's a lot of waste everywhere, right? So that's food waste, obviously. There's also a lot of trash, and recycling as well. How do you feel about all of that as well?

(13:42) Agung Saputra:

I learned waste management back in my master's. In Indonesia, they're more focused on waste management, not focused on the prevention because in circular economy best practices. Just imagine a pyramid, but it's in the other way around this one. So the one that we should focus on is prevention.

(13:58) Agung Saputra:

For example, if you have leftover or maybe surplus food, before you throw it away, you need to at least, finish what you order. And if you can finish it and then, move to the second step. So you can donate to people whose food is still edible and untouched, but if you cannot donate to the people, you can bring your food to your pet or animal so they can finish it. But if you cannot do step three you can do the composting. If you cannot compost the food waste and then you can just throw it away in the landfill. That's the correct way for the waste management. But in Indonesia, they focus more on, if they have food that's still edible and untouched. They just, throw it to the landfill, so they skip so many steps for waste management. Maybe the not enough education for society to grasp or understand the steps for waste management in a circular economy.

(14:46) Jeremy Au:

So how bad is the waste management system now in Indonesia? How does it work?

(14:51) Agung Saputra:

Yeah, as far as I know, the incinerator is not the primary way to convert waste to energy in Indonesia due to the regulations, and second of all, the tax and something like that. So the best practice is the conventional landfill. It's not the modern one, but it's conventional. They just throw them away in the landfill and then it creates a massive, landfill. It's a time bomb ticking because one day the landfill cannot receive any rubbish and then it can become a disaster for everyone that lives nearby because we experienced, that landfill in one of the areas in Bandung that, created more than 12 people or 15 people died at the time due to the full of rubbish from the landfill because the landfill is kind of like, explosive from the methane gas that accumulated in the landfill as well.

(15:37) Jeremy Au:

Wow, that sounds terrible to hear. My condolences. But as in, so you're saying that these landfill are like time bombs because there is a giant pile. right? I also understand there are a lot of people. So there's a releasing methane gas, but it's also a lot of people who are recycling and they're scavenging or recycling themselves, right? Are they taking recyclable parts out of landfills?

(15:55) Agung Saputra:

Yeah, but it's not enough because even if you live in Indonesia and then you're trying to separate your waste, the plastic waste and stuff like that but after you give them your waste, they will mix it again. So that's why.

(16:09) Jeremy Au:

They'll mix it up together again? What was the point of separating it in the first place?

(16:13) Agung Saputra:

Exactly. So it's kind of make me confused as well, but for the startup that's doing the waste management, like plastic recycling, they educate their customers to just sorting away their waste. And then they will pick it up by themselves. I mean for the plastic recycling startup. And then, they will sort out which one has the highest economic value. and something like that. So they won't give it to the scavenger. That's as far as I know.

(16:38) Jeremy Au:

Yeah. It reminds me of companies like Rico System, which is also doing waste management.

(16:43) Jeremy Au:

A lot of other folks there, also a lot of waste management startups, when you look forward in the future, what are your hopes for the Indonesia sustainability scene?

(16:51) Agung Saputra:

Yeah. It's still growing. I mean four years ago, the one that did this circular economy startup was only Surplus, Ricosystem, Waste4Change something like that. So it's only four or five startups. And now it's almost a hundred, but they are still not commercial yet. They are doing this because first of all, the market is growing, even though the regulations is not ready yet. And second of all, most of them are youth or Gen Z that, experience, the climate crisis in the location or, in their life. So they started to create the movement, even though they created maybe a small community and something like that. So from a point of view, our sustainability startup or climate startup in Indonesia will be much more, and from the funding, it has been increased as well since 2020. Investors from overseas will look for a startup that not only gains profitability but generates an impact on the society and environment as well.

(17:42) Jeremy Au:

Great. Could you share about a time that you personally have been brave?

(17:46) Agung Saputra:

The time when I became brave was when I decided to run out of my comfort zone. I think in the early podcast, I told you that I was raised in a remote area and then, I moved to the capital city, so I experienced a huge gap in education. So I had two choices at the time, whether I’d drop out and then go back to the remote area, or encourage myself to catch up on my achievements so I could pass my grad and then I can pursue my bachelor's degree in one of the top universities or pursue my master in London. So I decided to learn a lot from my life in a remote area. And second of all, the time when I was brave was when I had to decide whether I’d stay in London to become an environmental consultant and gain a big salary. Or I can go back to Indonesia and then starting uncertainties like Surplus because no one has done it before. I decided to go back to Indonesia and create Surplus. That was the moment when I chose to face so many risks by myself, but I knew the consequences then I knew the impact on myself and the people surrounding me who are using Surplus as well.

(18:53) Jeremy Au:

On that note, thank you so much for sharing. I'd to summarize the three big takeaways I got from the conversation. First of all, thank you for sharing about Indonesia's, waste of time bombs, in terms of pollution. We talk about different types of pollution. We talk about the air pollution that the indigenous government had to work to kind of try to solve. But unfortunately, some deeper-rooted issues to it. We talked about the biodiversity challenge as well, but more importantly, we talked about the general waste problems, where we had landfills, really bad for local areas in terms of pollution, also quite safety hazards as well.

Secondly, thanks so much for sharing about food waste. I think it was very interesting to hear about how you think about food waste in general it's because Indonesia is a large country in terms of population because it's also getting richer and it also has some cultural attitudes towards food as well. And so I think it was interesting to hear that you believe that in many ways the food waste will get worse in the coming years because of a larger population that's getting richer as well.

And lastly, thank you so much for sharing about Surplus. I really enjoyed hearing about how your product works in terms of the marketplace. And I think it was interesting because you had to talk about who you think your customers are in terms of the younger folks are a little bit more amenable to it, versus how to work with bad faith actors in terms of food quality and safety, so you're willing to ban people with a two strikes process. And also interesting here, is your product roadmap, where you are now recycling ugly fruits and vegetables into smoothies as

(20:09) Agung Saputra:

Yeah. Thank you. Thank you so much for having me as well, Jeremy. And yeah, let me know if you are in Jakarta.

(20:14) Jeremy Au:

Yeah, definitely check out Agung's smoothies shops.