Service for the delivery of proper nutrition, designed for people who exercise and maintain a healthy lifestyle. The idea Grow Food my partner and I invented in the summer of 2015, sitting at the bar over a beer. We are both athletes, love weight training and good food. But the cooking and grocery shopping is not exactly included in the list of favorite activities. So we came up with the idea to create a service that would have solved the problems of planning of a diet, counting PFC, grocery shopping and cooking.
Two weeks later, we produced the first box of food. The initial version of food Grow Food compared with that of our clients now, is heaven and earth. The first packaging was made of Styrofoam. We immediately gave test meals to friends, and the first thing I heard. “Change boxes”.
They are not placed in bags that were too big and dispersed. At first we thought that all elementary. Simply come up with a menu, and cook, in principle, anyone can. However, we quickly realized that it doesnt work. We do not want to service looked like some kind of craft production in the home.
We rented a kitchen and have hired the brand chef. He translated the entire menu in routing and in cooperation with competitors and consultants on nutrition, which we drew, developed the principles of formation of menu and food prep. Now our production is 2000 m2 in St. Petersburg and two in Moscow.
Employees are looking for different. HeadHunter, recommendations, social networks. We have selected a great, loaded team. The guys burn the idea and really want to work that we appreciate.
Now employs about 400 people, distributed in the following departments. It is the development, production, call center, logistics, marketing, Finance Department, HR Department. The main feature is that we are not building Corporation. We just heartily do what we like and move towards common goals. Incredibly cool when a team looks in the same direction with you.
The budget at the start was about 200 thousand rubles, so we used his friends and acquaintances. Once our friend the coach, who also helped in the development menu, go to bodybuilding competitions in Saint-Petersburg. There in the break, he pulled out a box Grow Food, and then everyone started asking what it is.
Among those interested was the champion of Russia, he asked me to sign it for delivery to the exchange for publication in Instagram. After the first record came to us ten new customers. We realized that this tool works, and found 20 more athletes to popular accounts, and thus created a network of ambassadors. Also in our case, good work by thematic exhibitions. The fact that the product will be in demand, became clear.
It was enough to get a box to Grow Food, as all around began to ask what it is and how to order. The number of customers actively growing, and the break-even point in the first investment round from Addventure we reached in January 2017. Now we have about 6 thousand regular customers and 1.5-2 thousand of those who use the service from time to time. There is a percentage of people who order delivery without interruptions. There are those who take Grow Food throughout the month, and then pauses for a period of one to two weeks.
Tariff line starts from 3300 (Daily, three meals a day for five days) and goes up to 5900 rubles (Power, seven-time meals for the week). The first investment we have attracted half a year after launch, we invested Alexander Borodich. The money really helped at the start. We rented a kitchen and started to connect the marketing. Then six months later, I met with Maxim Medvedev from Addventure.
He liked what were doing, he believed in us, and his Fund invested in the Grow Food 30 million rubles. In the summer of 2017, we raised another investment round from Addventure — this time $5 million. We are going to expand the set of lines, start to include not only sports. For example, among the customers are well “gone” ruler balanced daily nutrition Daily. In addition, we launched a new low-cost service Unifood.
There are also plans to launch Grow Food in Krasnodar, Kazan, Yekaterinburg and setup logistics in other cities through Moscow. FoodTech market in Russia is considered to be “hot”. On the one hand, food is basic and unchanging human need over the centuries, the format of the meet has changed much slower than in many other needs, such as socializing and communication. On the other, the appearance on a conservative market power of new technologies opens up many niches, and it attracts the market attention of venture investors.
But not so smooth. For services such as GrowFood, it is easy to predict a similar growth problems. First, it is a problem with scaling. The production is usually tied to your own kitchen or infrastructure partner, which is also limited (in addition, when working with partners can affect the quality of products).
And if the service decides to open in a new city, for example, in Yekaterinburg, he will have to look for a local partner with the right level of quality, or to open its own production. Perhaps the company is testing or considering a franchise model for geographical scaling. Secondly, such a service as you grow, you may experience difficulties with churn. Well, if the economy allows you to pay for a new customer already from the first weeks of use of the service. But often the company with the active scaling have to spend to attract the user substantial money who are repulsed only after a long amount of time.
And over time, the percentage of the audience that is ready to eat with Grow Food for a few months, most likely, will fall. Indeed, the company began to work not only with athletes, but with the mass market. Mass client nutrition plan will quickly get bored (and plenty of boxes around), or he will quickly achieve their short goals (eg to lose a few pounds off) — to unsubscribe from the service.
On the other hand, the founders and investors Grow Food may look not only to the growth of the market at the exit to the mass customer, but also to increase the purchase power of the company and other effects of scale, which should help a startup achieve better operational efficiency. In this equation it is important not to miss the unit-economy of the focus, otherwise scaling the business will quickly become scale of losses and high burn rate.And the third problem I see is a future sale of such a company, because not all investors, especially the venture focuses on dividend model. Today a clear strategist for FoodTech start-up of this kind on the Russian market is not easy to find.
Thus, the company is clearly going to be less interesting Mail.Ru Group (chief strategist in the food market today), as it is connected with the offline limitations in the production of. Retailers and product manufacturers, to my knowledge, while also not interested in such models, although they may help them to increase sales of its own products. The fact that in comparison with their current sales, this increase would be negligible. In any case, Ill be glad to hear about another major company in the food market. It is a good sign that develops the whole market.
Therefore, heartily wish the team good luck Grow Food. Want to tell the story of your startup. Welcome to rostrum.