We’ve all heard the stories of Blue Apron and the rise of services like Hello Fresh. Although those are great services and have become businesses with hundreds of millions in revenue, there is still a major shortcoming of these services.
Most of these businesses still require meal prep aka time, which lets face it in the modern American family is something that is scarce and highly valued. Feast & Fettle wants to bring quality family dinners back into the equation but without all the time and prep associated with it.
That is why they are designing an at-home meal delivery service that provides fully prepped meals that are ready for consumption and enjoyment with family. With the meal kit and at-home delivery service market still on an upward trajectory, we think the level of service that Feast & Fettle brings could make for a uniquely differentiated and highly valuable brand in the space.
For these reasons, we dug in deeper and sat down with CEO, Carlos Ventura to deep dive into the business. We think you will like what he has to say.
Carlos, you are not the founder of Feast & Fettle, but what is the origin story of the company and how did you get involved as CEO?
Feast & Fettle was founded back in 2016 by our Executive Chef, Maggie Mulvena. Before the business officially launched, Maggie was a nanny for a family in Providence, Rhode Island. Word quickly spread about her delicious meals and unique cooking style that catered specifically to families. Maggie decided to take “the leap” and started a meal delivery service – the rest is history.
On a personal note, I’ve known Maggie for several years. It wasn’t until I moved back to the U.S. after spending time at a food delivery business, where we felt it was the perfect time to partner. Her strengths are my weaknesses and vice versa – which creates a great dynamic. Maggie oversees our product and I’m responsible for running the business.
We’ve been able to grow substantially this year as we can now utilize our resources and strengths in a way that is healthy for the business going forward.
How does Feast & Fettle differentiate from say Blue Apron or any other delivery meal-kit service?
First and foremost, we are solving a completely different problem than the standard meal kit players out there. Our members don’t have the time and / or desire to cook each evening. Our meals arrive prepped, ready to reheat and serve – the epitome of true convenience.
Second, our quality standards are that of a high-end restaurant. Our members desire delicious, wholesome meals on the dinner table every night and don’t mind paying a premium for that service.
Finally, Feast & Fettle is designed around the busy household. Our meals are packaged and delivered ‘family-style’, such that entrees and sides can be mixed-and-matched based on the individual preferences of anyone in a household. It is our intent for our members to spend time at the dinner table as a family and this all stems back to Maggie’s experience as a nanny.
Who is the target consumer of your product?
We target working families and professionals that do not have the time to prepare a delicious dinner, but refuse to sacrifice quality.
What is the customer acquisition strategy and what are some early signs you have that give you confidence this can be a long term profitable business?
Surprisingly, before 2018 we invested nothing in marketing. The business was growing purely by word of mouth.
Since February, we’ve invested in various marketing channels but the most effective have been both extremely targeted and personal. We also don’t shy away from traditional channels such as print or radio if they’re effective – we know our target demographic and spending smartly versus just a blanket marketing strategy has worked very well for us.
Regarding profitability, the business has already had a positive EBITDA for several months in 2017. This is essentially unheard of in the meal delivery space! We’ve found a ‘niche’ in what is an enormous market and profitability will always be at the forefront of our minds. We are interested in servicing our members over the long run and creating value – growth at the expense of profitability isn’t something that will work any longer in the meal delivery space.
How does the cost of F&F compare to other indirect competing offerings?
Realistically, we’re competing with everything from grocery stores, restaurant takeout, meal kits and frozen dinners! As mentioned before, this market is enormous so there will be several winners.
Convenience is becoming more of a priority in the food delivery space as the market segment growth for meal delivery is outpacing traditional segments. We’ll continue to couple convenience with superb quality to remain differentiated as Feast & Fettle expands.
Being a fully prepped meal service, how does this impact your cost basis and what types of gross margins can you drive on your product?
Food cost is the major component of our gross margin, which currently sits in the high 60’s. Our gross margin does not include delivery drivers which are actually not a major cost for us in comparison to meal kit / food logistics businesses.
We’ve recently partnered up with a national food supplier that will allow us to keep our gross margins steady as the business grows.
As you think about markets to be in, what types of markets best suit the Feast & Fettle product offering?
Geographically, we’re looking at the suburbs and outskirts of major cities. Think of all of the working households that don’t have time to cook and are at the mercy of what is available for takeout at the restaurants in the immediate area. It gets old and (often) unhealthy pretty quick.
What is the distribution strategy for the team and how do you manage cost of delivery and logistics?
Our long-term distribution strategy revolves around a hub-and-spoke model where each one of our future kitchens will be the central point in a broader delivery network.
Currently, we use a logistics software that optimizes our driver routes for traffic, time of day, and driver efficiency among many other factors. We know how far we can travel from our hub while keeping the meals 100% fresh which is first priority.
Our drivers are hired as employees – they are the face of our company and part of our team. Until labor laws evolve to better suit ‘gig economy’ jobs, we intend to keep this strategy.
You will be moving into a new space with the capital raised. What type of capacity will this new facility have?
The new kitchen space will allow us to do at least 4x the volume we currently do. At minimum this is ~$2 million in sales per year.
How many facilities do you think you would need to support a market like Rhode Island, and what type of CAPEX spend is needed to get a kitchen up and running?
For now, we only need one facility to service all of Rhode Island and were expanding into Massachusetts later this year.
As we think about product expansion and we begin to saturate the market, we may consider a second kitchen in Rhode Island but the next realistic location will be a kitchen that can serve a wider market in Massachusetts.
The capex required to launch a kitchen is ~150-200k. Our first location is on the higher end as it’ll also serve as our HQ.
As we think about growth strategy, are you planning to raise additional capital and if so what markets will you move into?
Our first kitchen will be the basis for future replication, whether organically or through franchising. We will choose the optimal capital strategy once our kitchen is efficient, profitable and ready for additional rollouts.
Regarding geographic expansion, we’ll start in New England and expand nationally thereafter. Our vision for Feast & Fettle is BIG.
Do you see this being an acquisition play or are you in it for the long haul as a standalone food business?
It would be unwise to say we wouldn’t consider any acquisition, but we are doing what we love and it’s not something we think about at this stage.
We want to see this business succeed and there is enormous amount of opportunity whether its from a product or geographic expansion standpoint.
More importantly, we want to show that food delivery can be a successful, profitable endeavor over the long haul.
How has your experience been raising via Microventures, and what do you want investors to know who are maybe on the fence about investing?
Coming from someone with a more traditional fundraising background, it is important that business owners understand that crowdfunding is also a marketing effort. Trying to convey your product of venture via online is much different than in-person and the audience is much broader.
Get your supporters educated and onboard early in the campaign. Don’t forget that each day is a grind and it is definitely a marathon versus a sprint!
After spending time with Carlos, I am very bullish on the business and be on the lookout in the coming ways for a deeper analysis of the business because I really like it. It has the margins and structure to actually succeed as a business, where other meal delivery services have come up short.
We also think the acquisition market for this business with a strong founding team and exceptional product will be bountiful in the coming years. If you feel the same way as us at KingsCrowd, be sure to invest HERE.