Everyone loves a delicious home-cooked meal, but very few people have the time, ability or interest to cook for themselves on a daily basis.  This problem is particularly true for working professionals and busy families, more and more of which are duel income households.

Meal Kit companies such as Blue Apron and HelloFresh have eased some of the burden by providing consumers with pre-portioned ingredients and recipes, but these meals still require 60+ minutes of prep.  Delivery services like Grubhub and Uber Eats offer convenient take-out options on-demand but lack the quality, comfort and health benefits of a home-cooked meal.

Consumers these days want quick and easy combined with healthy and fresh, and there are very few solutions out there that solve for all of these needs.

Feast & Fettle is attempting to solve this dilemma by offering a subscription-based premium meal delivery service.  So how does it work? The company prepares home-cooked meals out of a central commissary kitchen in Rhode Island and delivers them to customers’ doorstep every week.  The meals are served family-style and are catered to the customers’ specific dietary preferences.

Each week the company releases a new menu where customers can choose from a variety of entrees and sides including items such as Simply Grilled Salmon, Asian Chicken Salad, Honey Buttermilk Cornbread and Fried Sweet Plantains.  Feast & Fettles “flex-scription” model gives customers the flexibility to choose various combinations and portions, and allows them to pause or change their plan any given week. Once the meals arrive they are stored in the fridge until dinnertime when customers simply heat up them up and enjoy – no cooking necessary.

Any way you slice it, the food market is massive.  The grocery market in the US is a $641B market and online grocery sales are predicted to reach $100B by 2025.  Ready-Made meals are a $66B market in North America, growing at 4% per year.

Feast & Fettle is capitalizing on a number of macro industry tailwinds including (1) a desire for convenience, (2) a preference for fresh and healthy foods, (3) broader acceptance of food e-commerce and (4) a decline in eating out.  The young but rapidly growing Meal Kit segment was valued at $4.65B in 2017, and is projected to be an $11B market by 2022.  Meal-kit companies such as Blue Apron and HelloFresh have demonstrated a willingness by consumers to order fresh food online in a weekly subscription fashion.  Feast & Fettle takes the meal kit model one step further by preparing the meals in advance so that consumers can save time and hassle.

A number of companies are fighting for “share of stomach” in the online meal delivery space.  The most direct competition comes from other companies delivering fresh prepared meals, including Freshly, Munchery, Prepped, The Foodery and Fresh N Lean.

Feast & Fettle differentiates from the other fresh prepared meal delivery players by offering family style portions with flexible subscription plans, rather than individual pre-portioned meals with non-customizable plans.

The company also faces competition from the Meal Kit players such as HelloFresh, Blue Apron, Plated, Green Chef, Purple Carrot and others, who have grown rapidly over the past few years.  Feast & Fettle stands apart from this crowd by delivering fully prepared meals, but there is nothing stopping these players from entering the prepared meal realm at some point in the future.  Lastly, the company faces some competition from online meal delivery apps such as Grubhub, Uber Eats, Postmates, Doordash and Caviar.

Feast & Fettle’s business model is fairly straight forward.  The company offers subscription plans for singles, couples and families.  Plans range from $59/week to $299/week, depending on the number of meals and number of servings.

Costs of goods sold include food, labor, packaging and delivery.  The company claims a blended operating margin per order of $17 and hopes to increase this to $30 per order in the future.  Over the past 12-months, the company has seen an $83 CAC and a $424 LTV. On average customers are ordering 3.0x per month and the company is seeing 40% customer retention rate after the first year, which is substantially higher than some other industry players that struggle to maintain 20% long-term retention rates.  That bodes well for signals of real stickiness amongst consumers most likely driven by the convenience of prepped food and the value of having healthy in-home meals.

Revenue is growing rapidly at Feast & Fettle.  In the first six months of 2018 the company generated $194k in revenue.  In 2017 the company generated $231k, up 143% over 2016 revenue of $95k. The company has managed to keep losses to fairly modest levels of $36k in the first half of 2018, $12k in 2017 and $23k in 2016.  All in all, the company has been very efficient with its capital to-date and has demonstrated consistent and steady month-over-month growth.

The company has achieved some meaningful milestones in the first two years of operation:

• 92 active customers (as of June 2018)
• Adding 17 new customers per month (January-June 2018)
• 40% long term retention rate
• 2018 Editor’s Pick for Home-Delivered Meals in Best of Rhode Island magazine

If the company executes well and is able to gain meaningful scale (eg. $10-100M in revenue), there could be a number of potential exit scenarios and/or large fundraising events in the company’s future.  Strategic acquirers would be interested in the infrastructure, brand and customer base that the company builds, particularly if retention rates remain high.

Financial sponsors will be attracted if the company can prove out strong unit economics and show early signs of profitability.  Some examples of potential liquidity events could include:

• Food Service / Grocer (Amazon/Whole Foods, Safeway, Aramark, Sodexo, Kroger, Compass, Nestle, Unilever, Walmart)
• Food Tech (Hello Fresh, Blue Apron, Freshly, Instacart, GrubHub)
• Private Equity / Venture Capital
• IPO

The core team at Feast & Fettle appears well-equipped to build a company of consequence in this space.  Carlos Ventura, CEO, has experience in investment banking and consumer start-ups, including in strategy and corporate development at Deliveroo, a Unicorn food delivery business valued at over $2B.   Maggie Mulvena, Founder and Executive Chef, has years of experience as a private chef and a Bachelor of Science in Culinary Nutrition.  The General Manager, Nicole Oliveira has been with the company since inception and comes from a background in Hospitality and Food & Beverage.