In spite of the death of Webvan in 2001, the world of online grocery delivery has been slowly creaking back to life. The explosion of CSAs in the late 00’s brought fresh produce to the doorsteps of thousands of Bay Area residents. Now, dozens of companies are popping up to combine the CSA model of weekly box delivery with a grocery store-like shopping experience and flexibility. We’re heading towards (or returning to) a world where Bay Area residents (and beyond) could realistically substitute grocery shopping with online delivery. The outstanding questions: Which startups will win share in this burgeoning market? Who is positioned to offer the complete solution?
My favorite contender is LolaBee’s Harvest. Founder Lauren Bass completed her MBA at Kellogg in 2010, but entered business school knowing she wanted to start a food business. She came up with the idea for LolaBee’s at Kellogg and wrote the business plan during the two year program. After graduating, she moved to San Francisco to build her business.
“I grew up on a horse farm and have always loved animals. My concern for animal welfare drove me to research and educate myself about the food system. I read Omnivore’s Dilemma and realized I wanted to be part of the movement to improve the food system. I saw the growth and potential in the CSA model but I also saw the challenges that consumers were facing in fitting CSAs into their regular lifestyles. I knew that most farmers didn’t have the resources to customize their CSA programs to fit more naturally into people’s lives. Our goal here at LolaBee’s is to bring the CSA model to a larger audience and make it fit seamlessly into customers’ daily food rituals.”
LolaBee’s Harvest is an online farmers market and food delivery service. It sources local organic produce, local organic dairy, pastured meats, poultry and eggs, sustainable seafood, and cheeses, snacks, baby food, and prepared foods from Bay Area artisans. Customers create a free account and place customized orders weekly for home delivery on Thursdays in an insulated, reusable tote which keeps food fresh for over 15 hours. If a customer doesn’t have time to put in their order, they receive the LolaBee’s Harvest Box, a best-of-season collection of half fruits and half veggies.
What makes LolaBee’s stand out is Lauren and her team’s dedication to exceptional customer service, backed by the Happy Customer Promise. LolaBee’s does not have just customers, it has diehard brand advocates. Peruse the yelp page and you see “I can’t stop telling anyone who will listen how amazing Lolabee’s is,” and “I can go on and on about how wonderful this company is, but it’s best if you check it out for yourselves.” Literally, read out the reviews. The scope and depth of the praise is seriously impressive. Lauren is running an high-functioning business.
And she’s doing it with a small team. She officially launched the business alone in November 2011, and quickly enlisted her mom to help her. Entrepreneurship runs in
Lauren explains her reasoning behind involving her mom, “having worked for my mom’s business growing up and for 6 years after college, we learned to work together really well. There’s no one I would trust more than my mom to help me make LolaBee’s a success. I’m so fortunate to have the support of my parents and their decades of experience and priceless advice to guide me through the tough journey of starting a business from scratch and growing it one farmer, one apple and one delivery at a time.”
In addition to Lauren and her mom, Operations Manager Kelvin Chao joined the team in August of 2012 and plays a crucial role in managing supplier relationships, customer communications, fulfillment, and warehouse operations. Says Kelvin on his role, “with every delivery, we set the highest bar for flavor and freshness and help small farmers reach more people. By taking the customer service and fulfillment off the farmers’ hands, we enable them to focus on the work they love: growing the food.”
What also becomes clear from the yelp reviews is that customers are 1) needing to go to the grocery store less often and 2) saving money. As a picky eater myself who frequents Whole Foods at least 3-4 times a week, I wouldn’t be disappointed to reduce my number of WF visits, and I wouldn’t be surprised if there were a more cost effective way for me to purchase food of the same quality or better: farmers market quality. One customer notes her family of three is saving ~$200 a month on groceries by using LolaBee’s and another has eliminated 1-2 weekly trips to Whole Foods. For a service like this to fully replace Whole Foods in my weekly routine, it would need to offer a selection of prepared foods. The LolaBee’s online store currently offers fresh pasta from Santa Cruz Pasta Factory, tamales and enchiladas from Mi Fiesta Catering, and couscous and hummus from Hummus Heaven. Lauren is eagerly looking for other local artisans to add to her offering.
Lauren is not alone in this market. Luke’s Local is a direct competitor, offering the mealbox: “a mix between a CSA, personal catering, and an artisan food shop,” along with the Cuesa Chef market box sourced from the Ferry Plaza Farmers Market, and the office box with snacks, coffee, and produce. Their boxes are customizable and delivered to customers’ doorsteps.
Lauren’s other main competitors did not start as direct competitors. Both Farmigo and Good Eggs entered the local food delivery market as technology platforms and have since expanded to include online customized shopping and delivery.
Farmigo began as a company selling software systems to farms offering CSA programs. Their CSA management system tracks sign-ups, automates payments, manages logistics, manages customer communications, enables a web store for excess inventory, and provides a mobile platform. Lauren currently uses Farmigo’s platform for the online LolaBee’s store. Recently Farmigo introduced “Farmigo Communities:” community-specific online farmers markets with customized online ordering and workplace delivery.
Good Eggs also was founded as a technology company providing the online platform and delivery management tools for local food producers and artisans to serve customers directly. Good Eggs did not initially share plans to touch the products directly, just to enable small local companies to better serve and reach their customers. However Good Eggs announced a relaunch this Thursday now providing the entire Bay Area with online grocery shopping and home delivery.
Given the distribution costs in this space, it makes sense that these two players have moved from pure technologists to aggregators and distributors. Merely providing a platform for a local baker to deliver bread directly does not solve the problem facing local food systems. It’s costly for every local artisan to run its own delivery service. And a customer does not want to worry about numerous home deliveries throughout the week. The cost savings and customer value proposition lie in consolidating products and delivery.
What this means is that competition is heating up in Bay Area grocery delivery, and I’m excited to see how it will develop. If you’re interested in trying LolaBee’s, use the code EdibleStartups for $20 off. Currently LolaBee’s delivers in San Francisco and will expand to the East Bay in early April.