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In the brave new economy workplace, entrepreneurs sprint through a 12-hour workday, grabbing global sources of information, transmitting orders at warp speed, making inventory and sourcing decisions that promote peak efficiencies. Then, exhausted and faced with an empty home refrigerator, they hit the drive-thru for a cold, congealing fast food dinner.
What’s wrong with this picture?
Filling online orders and delivering fresh, healthy groceries and cooked meals straight to the office, a new generation of foodie entrepreneurs is starting a new kind of feeding frenzy, getting inspiration from Michael Pollan
rather than Peter Drucker. Pollan’s gospel of eating healthy foods from local sources is getting another push from corporate managers, who want to promote wellness among time-pressed staffers. If workers can order at their convenience, pay online, and pick up a week’s worth of food on their way out of the office, smart food choices get easier, overworked employees have a solution for dinner, and their employers offer a mens-sana-in-corpore-sano perk that doesn’t cost a dime.
“The food industry has been behind the times when it comes to successful online retail,” says Chris Thompson, who’s launching Panache Foods
in suburban Philadelphia this month.
John McClelland agrees. The 35-year-old Pittsburgher founded Good Apples
, an online grocery delivery business, as a segue from his first start-up in technology consulting. “We were marketing data management to web-enable inventories,” he explains, “so we understood data flow.”
Pittsburgh client Consumers Produce
, a grocery wholesaler, introduced McClelland to the grocery business in 2003. “There were lots of old guys who’d been running around here”--Good Apples’ neighborhood in the century-old Strip District, the heart of the local food scene--”since they were little kids. You could talk to someone who knew everything there was to know about strawberries.”
The efficiencies of applying e-commerce to groceries were obvious to McClelland: let the customer orders dictate products, maximize volume by delivering to a central location, and eliminate losses from food spoilage. "We flip the supply chain backward," he says happily.
The firm’s first efforts used the successful Market Day model: offering a share of the proceeds to the sponsors, the programs invite families and teachers to place orders that are aggregated and delivered to schools for customer pick-up on a regular basis. When McClelland analyzed his online orders, the results surprised him: 80 percent of orders came from teachers, rather than families. Why not extend the offer to other types of businesses?
An early adapter of the corporate program, in early 2006, was Duquesne Light. The electric utility has 300 employees each in its downtown and suburban Pittsburgh locations, and health and welfare consultant Mark Dever was intrigued by McClelland’s offering.
"We found out they were right in the Strip District and we liked the local connection. We thought, why hasn’t anyone thought of this?" Dever recalls. Now he estimates that ten percent of employees use the service weekly.
"It’s one of those programs that’s easy to put out there, with instantaneous benefits. They handle all the communications. The prices are comparable to grocery stores, but my wife says the items we purchase last longer. It’s fresher. And the weekly specials are very competitive."
When Chris Thompson experimented with his soft launch of Panache this spring about 20 percent of his pilot audience--mostly family and friends near his base in Berwyn--ordered weekly. But he’s scaling back his expectations as he signs deals with larger companies. Beginning today he’ll begin deliveries to Auxilium Pharmacueticals
, which employs 250 workers in offices in Horsham and Malvern. There, he hopes for a 10 to 12 percent response, but expects individual order volumes to grow.
With a background in the Chicago restaurant business and the CSA (community-supported agriculture) movement, Thompson limits his offerings to chef-prepared meals: "Freshly prepared dinners than you can take home, Monday through Thursday. Dinners are good niche for us. There’s very little competition out there." Thompson subcontracts with a half-dozen local chefs with specialties from Asian fusion to 100 percent organic to desserts. They buy local ingredients and prepare meals in their own health-department- approved kitchens; Panache coordinates orders and deliveries.
Adrian Fang of Carlisle has taken the online concept in a different direction with Cruzstar
, his Carlisle-based start-up. With a business model that includes three product lines, Cruzstar has created three products: Cruzcatering, an online catering service; Cruzcourt, a virtual cafeteria for businesses; and MyMenuOrder, a Web site for local restaurants--such as Cuppy’s Coffee and Al’s Pizza and Subs--to market their menus and allow customers to place orders.
CruzStar is now based at the Murata Business Center
, the Carlisle start-up incubator .
Fang says cost cutbacks have led many mid-state employers to drop cafeteria service, and he’s rushing to fill the void. Cruzcourt allows employees at firms of 100 or more to order their lunch deliveries online. It will launch this spring at D&H Distributing in Harrisburg, and will add a 500-person electronics firm in the area in April. He firm is hiring staffers to support the expansion. "The goal is to move toward the King of Prussia area," says the 28-year-old CEO. "In any larger metro area, the Cruzcourt concept will work."
Over the past four years, McClelland’s Good Apples grocery delivery has captured major clients from Pittsburgh (including UPMC) to Camp Hill (where Highmark is a customer). And as he looked at ways to grow the business, he asked a consultant to recommend Good Apples’ next move.
The recommendation to merge with a traditional grocer made sense to McClelland. But he recognized that the Good Apples brand, already 80 percent organic, needed a partner that shared its commitment to healthy foods.
"The people who are into clean food are passionate. It’s a political statement," says McClelland. The right partner was only a few blocks away. Right by Nature
, a locally-owned grocery with a locavore focus, "gave us the full grocery infrastructure." Sharing inventory means that online customers get the same prices as those pushing carts down the market aisles; "pickers” fill online orders right off the shelves. In some cases, online customers get even better prices. "If we realize that we’ve over-ordered on blood oranges," he says, fingering a fresh 99-cent specimen, "we can drop the price online to reduce our stock."
Right by Nature’s future plans include providing other services to the corporate clientele--hot lunches, corporate catering, even floral orders. "We’re (delivering) every day anyhow," says McClelland, who is business development officer of the merged company. And he’s pushing social media as a marketing tool. "We can put you in touch with other local folks who’ve bought blueberries this week and invite you all to share recipes," he says. It’s a cyber-twist on the old tradition of borrowing a cup of sugar over the backyard fence, and it’s coming to a cubicle near you.
Christine H. O'Toole is Keystone Edge's
Innovation and Job News Editor for Western Pennsylvania. Send
John McClelland of Good Apples
Good Apples packaging
Good Apples truck
Right by Nature, locally grown grocery
All Photographs by Heather Mull