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Eat Purely: Food Delivery Startups | TD Ameritrade Network: Morning Trade Live

[upbeat music] – Joining me today in studio is
Jeremiah Green. He’s a CEO and cofounder
at Eat Purely, a Chicago-based company here
that we’re gonna talk about because it fits into this
overall industry that is growing very quickly,
Jeremiah, which is food delivery and it seems like everything
food. Where does all that energy and
growth in the sector come from? What spurred it all? – Well, I think it’s–you know,
the Food Network over the last ten years have
helped quite a bit, of course. – Yeah.
– And everybody’s becoming more aware of food. Everybody’s becoming more aware
of what they’re putting in their bodies. And of course there’s a big
backlash against things–all things artificial, especially in the group of
millenials that are out there
now. And folks who are getting
older, who have children. So for us, you know, we kind
of–what we do is, we make chef-made, healthy,
organic meals delivered in 20 minutes or less
from our mobile app. – So tell us about Eat Purely.
Tell us about that specific business that you guys
have. Where does it sort of fit into
the overall landscape? And what specifically–you
mentioned chef-curated food delivered quick–
20 minutes–how do you do that? That’s pretty fast.
– Yeah. It’s a secret. If I tell you,
I have to kill you. But–no, I’m just kidding. But, um, we are very different
than a meal kit. We’re very different than a
restaurant. We are a commissary-based
business that makes food in volume and
at high quality. And we are–we take the
guesswork out of cooking completely. So when you order through us, we make it super convenient,
super easy to eat well. All of our meals are chef-made. They’re healthy. We are not a diet business, so it doesn’t conform to any of
these other things. We do have things on the menu
that are–conform to a few other types of diets, like
low-carb or some of the other ones that
are out there. But in general, we’re–
– You’re not constrained by some sort of diet
specification. – Not at all. Actually, we carry a lot of
different types of meals that sort of meet lots of
different specifications, because we want to fit into
your life. We don’t want your life to fit
into us. And that way, we can make the
food taste really good. We can keep it healthy. We use all-natural ingredients. Quite often, we use a lot of
organic ingredients as well. And, um, you know, when you
order through us, it’s super convenient. So we enable folks to order
on-demand or order ahead. Everything’s fully prepared,
fully cooked. We deliver everything chilled. And that was a key
differentiator in what we do. And that’s because we’re able
to keep a sort of level of consistency with the food so when a chef cooks it and we
chill it down really quickly, when you go to reheat
it–simple reheat instructions, you know, it’s three minutes a
meal right in the microwave. It’s as good as if the chef’s
making it for you in front of you. – So then how do you–because
all that sounds great. How do you keep it viable for
you and the business on the margin end? Because it sounds like you got
high quality; you’ve got chefs here, and that
seems like a big selling point, too, which is quality chefs; and it gets to you pretty
quickly. – Yeah.
– All that–those two things seem pretty costly to me. – Yeah, they are. And we’re really proud of the
fact that we are one of the few companies in the
on-demand space making the unit economics of
this business work. – Yeah.
– We’re very proud of that. Absolutely. We have the lowest
cost delivery on a unit basis of any delivery
business in America right now. – Yeah. – Eight times lower than
Postmates. And that’s because we’re able
to deliver six to ten meals– sorry–six to ten deliveries
per hour. So instead of making one
delivery per hour like, let’s say Postmates or Grubhub
or these point-to-point delivery systems, our system was originally
designed to have a high
velocity of deliveries, and so most times, the tip
that’s granted to our drivers overcomes the cost associated
with that. And that chews up a ton of
margin in these businesses. – You know, one thing–we just
had this table up, looking at some of the
competition within this space, right? And it spans a ton of different
places, whether it’s Grubhub or the
Seamlesses of the world, whether it’s Blue Apron,
which is now publically traded stock; the Caviars, the kind of
meal kit deliveries, Uber Eats, even Facebook is getting closer as they do
food reviews. I wonder what you can tell us
about, you know, either lessons learned from
peers– or, like, a company like Blue
Apron that I think everybody was very
excited about because they were one of the
first in the space. They went public, and now it’s
been a very different story. – Yeah.
– Just judging by the stock
price, people have a lot of concerns. How do you make sure that
you’re distinguished enough? That you have your own sort of
value proposition that keeps you separate from
everyone else? – Sure. I think the first thing
is, number one, number two, number
three, and number four: this is an execution-based
business, so you need to execute well
every time. Number one–number two, three,
four, five is that this is a high
retention business. So if you don’t have high
retention in the business, it’s not worth doing.
– Yeah. – It’s just not. Our retention is kind of off
the charts after the second or third
delivery. Basically we have a customer
for life. – Okay.
– And so those– I think those–and the
convenience of it’s really important, so solve a
real problem; Blue Apron tends to solve, like, “Let’s get together for
dinner.” We actually solve, we’re
cooking it for you. We’re making it so easy to eat
well that it’s hard to get off it. – When you talked about that
delivery, the number that you can do
in a set period of time, those meals–is that based on a
sort of distribution network that you’ve built up? I know you guys started here in
Chicago. – Mm-hmm. – Sort of describe how
important that regional aspect and kind of building out has
been. Is it gonna be–Are you gonna
be able to scale that, basically, is what I’m asking. – Absolutely, so technology
enabling a bad business process is a bad thing.
– Yeah. – We believe we have the best
business process in the world, and that’s how we’re able to
get the velocity of deliveries that we do have, and so we
have–we have started this year, especially, to
systematize the entire business through technology, so by next year, we’ll be able
to lift our model up and place it in another city without any retraining of
chefs, without having to recruit
drivers, with–we have basically a
business in a box ready to go in another city
by next year. – All right, there we go.
Great Stuff, Jeremiah Green. [upbeat music]

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