Why doesn’t Whole Foods just take out Blue Apron, Plated et al?
The non-demand food companies-- BlueApron, PlateJoy, Plated, HelloFresh, Sunbasket, Gobble, and roughly one trillion others-- may try to solve broadly the same problem as the on demand food companies-- Doordash, Postmates, UberEats, GrubHub-- but they are fundamentally different businesses.
The non-demand company’s need to source fresh and organic ingredients on a mass scale is one way. Coming up with healthy, delicious recipes a wide swath of people will enjoy is another.
Reliably delivering said ingredients to make a foolproof and universally pleasing meal that can be cooked in under an hour for $60 a week is another.
But the biggest problem has to be churn. These services-- even if you love them-- burn you out. A small percentage of people have the time and desire to cook three nights a week over the course of a year. The recipes either don’t repeat favorites enough or offer too much duplication of sauteed chicken with slightly different ingredients placed around it. We spent months demoing them and boxes arriving soon started to elicit groans. It was a ticking time bomb crossed with the monotony of a to do list arriving on our doorstep. This, just months after it all seemed like a fun adventure.
Repeatedly, even those who adore these services have said they were good for a time. They learned how to cook, collected recipes and then moved on. You can tell how bad the churn is by how impossible each of these services are to cancel. That’s a whole different rant but anyone who has foolishly signed up for several of them and struggled to stop getting them knows what I mean.
And that’s a shame because it truly is novel and truly solves a problem of what the fuck to have for dinner after a long day. How often have you decried having to spend $5 on a full bottle of something when you only need a teaspoon? $60 a week is insanely affordable for three meals easily stretched to three people each time.
There’s something compelling here. But current offerings are too rigid. Munchery got slightly closer in offering the option of pre-made food or take out, and allowing you to buy it on demand by the meal. But their offerings are so limited, it always feels like the same handful of choices.
So reading a recent interview with Whole Foods co-CEO Walter Robb in the Journal it struck me: Why the hell doesn’t Whole Foods do this?
Whole Foods could do for this category what Safeway and other grocery stores did to the also great idea but failed implementation of WebVan and Home Grocer. And -- some would argue-- Instacart.
Everytime I’ve ordered from Instacart, I get a minimum of three phone calls asking me about my order. Yes, I can get it quicker than Safeway delivery. And yes, I can get stuff from Petco and Costco or anywhere I please as well. And there was one time Safeway’s servers just melted and I didn’t get an order. But overall, Safeway is more consistent. They are doing one thing: Delivering shit in their own stores. They know what’s in their stores. They know how to substitute stuff, or not substitute it. It just works.
In the interview Robb said:
"You’re going to see an explosion in food service and prepared foods and beverages, an explosion of choices for those who don’t want to cook. And they’ll be able to get it on-demand. Ultimately [customers] are looking to the food store not just for food that they can cook but for food they can eat right now."
YES! People don’t want to cook every night, they want solutions cheaply on demand brought to them, that solves the problem on the fly.
An amazing insight that billions of dollars have already funded. Memo to Robb: Said explosion happened. The problem is most of the companies founded just don’t have a shot of venture like growth or in some cases sustainability.
Not only that but Whole Foods is coming off a year that saw its stock fall 30% as mega chains like Kroger get more into organic food. It needs a next act.
But -- no shit element of his words aside-- think about the advantages Whole Foods would have: They have every ingredient and already private label pantry staples. They already make hot food, cold prepared food, pre-cooked marinated meats and stakes, and make, package, and sell things like artichoke dips and spreads using their own recipes. Whole Foods is Munchery right now. They just aren’t bringing it to you.
I get that we said the same thing about Blockbuster v. Netflix. And part of the reason Blockbuster didn’t compete was foolishness. But the DVD by mail business and the prepared food or pre-cooked food businesses are wildly different. The latter has shit margin and infinite spoilage, logistical, churn, and subjective taste issues.
Imagine Whole Foods tried. They set up a Web interface, like Safeway where you pick a location. They throw hot bar options they already make everyday on there. And do slightly more work to package and parcel ingredients into pre-cooked meals. And they’d also throw in beer, wine, dessert or other needs from Whole Foods in there. And it’s all on-demand with no rigid subscriptions.
They’d destroy the entire category.
Up until reading this interview I’d argue back, that’s not their business. Logistics are horrific. Why get into that business? Well, if they want to solve dinner, it’s the answer. People want a mix. They want a Munchery one night, a Postmates another night, a Blue Apron another night. And sometimes they just want a steak and a baked potato.
Set up a subsidiary to handle it or buy one of these existing players. They’ve already been investing in other prepared food companies. Whole Foods has all of the pieces-- I am not going to say ingredients in this kicker-- to do what none of these players can on its own to actually solve the dinner problem. And like it’s business overall, it can charge a premium for it.