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SF-Startup Munchery Uses Sharing Economy To Make Fresh, Home-Delivered Meals Affordable

SF-Startup Munchery Uses Sharing Economy To Make Fresh, Home-Delivered Meals Affordable
July 17
02:07 2014

SF-Startup Munchery Uses Sharing

Economy To Make Fresh, Home-Delivered

Meals Affordable

Julie Pham (Forbes- ASIA)

Imagine having a grilled pork chop over white truffle mashed potatoes, and roasted mushrooms with red onions, garlic, and herbs delivered to your door for under $12. All you have to do is warm it up. The San Francisco-based startup, Munchery, has made that and many other delicious options possible by applying the sharing economy concept to home-delivered, fresh meals.

“The demand for good food is everywhere,” said Munchery co-founder Tri Tran. “We are serving busy folks who can use a convenient, tasty, healthy, and affordable solution to dinner.”
But the Munchery’s affordable prices does not leave its cooks starving
“Munchery is highly disruptive to the cook talent pool who are pigeonholed into cooking at highly-stressful-yet-low-pay restaurants,” said Tran.  “The life of line cooks is very hard. If they work really hard, they make $13-14/hr, usually without medical benefits. On a typical day, they get $100. Cooks never get to see the customers. The line cooks who work at Munchery are amazingly talented and they can make 3-4x that amount.”
Happy cooks make happy customers
The sharing economy goes by different names like “collaborative consumption” and “peer-to-peer marketplaces.” Rather than owning, people share, swap, barter, trade or rent access in peer-to-peer marketplaces that leverage technology to efficiently manage these relationships and transactions. Well-known examples include AirbnbLyftTaskRabbit, and Uber.
Raymond Reyes Munchery

Munchery Resident Chef Raymond Reyes plating freshly cooked meals for delivery. He said that leaving his restaurant chef role for Munchery has changed his life.
At Munchery, talented line cooks prepare meals during the day when they are not needed at their regular restaurant jobs. They design the menu, cook, pack and leave. Otherwise unused commercial kitchens get rented. Customers who cannot afford private chefs still benefit from a freshly cooked meal. They order online or with their iPhone app and the food gets delivered to their homes with warming instructions. Customers post reviews to ensure quality control.
Many of Munchery’s cooks choose to source from local food suppliers. The menus change every day. Customers benefit from seasonal menus that constantly change. Munchery develops and maintains the technology and coordinates all chefs, cooks, customers, and drivers on its platform. For this, Munchery pockets 25-30 percent.
Tran takes pride in improving the lives of the people behind the food. Munchery Resident Chef Raymond Reyes spent 16 years in 10 different restaurants, including the famed Michael MinaGather,  and Yoshi’s, working 15 hour days and usually on weekends. He loved the industry, but he didn’t get much time off and he never traveled far because of his limited income.
Reyes joined Munchery as an independent chef in April 2012, preparing food once a week and then twice a week. This past July, he was asked to join the Residents Chef program. Munchery chefs earn on average 30 percent more than their counterparts in restaurants.
“Munchery has flipped my life around,” said Reyes. “I work a regular 9am-5pm job. I get to enjoy my weekends. I get to travel. I’ve been to Russia, to Hawaii, to Paris, to Mexico. I get health benefits.”
I interviewed Reyes over the phone on a Saturday evening. Reyes said excitedly, “It’s Saturday and I’m taking a walk and talking to you instead of being at the restaurant!”
The work-life balance at competitive pay is even attracting star chefs like Bridget Batson to Munchery.
Munchery’s online platform enables the chefs to have more interaction with their customers. Even though the customers are experiencing these meals at home, they may know even more about the chefs than they ever did when dining in a restaurant. Munchery posts photos and bios of all chefs and customers post feedback.
“When you’re a sous chef at a restaurant, you never get any of the credit—the executive chef gets all the credit,” said Reyes.  “Now, I interact and get feedback on the food my team and I prepare and create.”

The customers benefit too from this sharing economy model. As Munchery wins more customers, they are able to lower the prices. When they launched in 2011, a meal cost $25. Then it went down to $19, then $16, then $14, then $12 and now many meals go for as low as $9.  Tran said, “The only thing that is cheaper is McDonalds.”

 

They now have 18,000 customers, 40 percent of whom have ordered at least three times. They still rely on word-of-mouth advertising and a customer referral program. Tran said they get another 300 customers each week.
Even the 60 some contract delivery drivers make around $27-28/hr after tips for the three to four hours a night they work.
Munchery CEO and co-founder Tri Tran with his two sons.

Munchery CEO and co-founder Tri Tran said he wanted to find a way to feed his family.
Co-founders Tri Tran and Conrad Chu met “in the trenches” at GetActive in 2003 before moving on to other companies. Tran was on his third start-up when he decided to it was time to start his own company.
The two are also 30-something-year-old fathers of young children. The idea for Munchery emerged to solve their everyday dilemma of feeding their family.
Tran handles operations and Chu oversees technology. They hired Michael Schaecher from sharing economy pioneer Airbnb to head marketing.
Munchery CTO and co-founder Conrad Chu with his family.

Munchery CTO and co-founder Conrad Chu with his family.
Munching in San Francisco
Outside San Francisco itself, the Munchery currently serves clients as far north as San Raphael, as far east as Albany, and as far south as Cupertino.
Munchery already has a high-profile fan following who put their money where their mouth is (literally). Instead of restaurant reviewers, their endorsement list reads like a Who’s Who of the Silicon Valley tech eliteMatt MullenwegEric RiesRandi Zuckerberg, and Brendan Mulligan.
For a startup to get early-stage, unsolicited funding is like a department store model getting discovered by Calvin Klein. Munchery is based in what may be the world’s most privately capitalized area for startups.
Funding came unexpectedly from a customer. Thomas Gieselmann atE.Ventures ordered meals from Munchery. “He found us and approached us and said, ‘I’m interested in funding you,’” said Tran.
E.Ventures invested $3 million. Other investors include Sherpa Venture, Anthos Capital, and Menlo Ventures. To date, Munchery has raised $4.2 million in outside funding.
With this funding, Munchery has started  the process to expand into other cities much earlier than originally planned. The next Muncheries will be in Los Angeles, New York and Seattle, which I’m particularly excited about because I will be able to order my own Munchery meals. Tran said they chose cities that care about good food and are tech savvy.

Successful tech startup ideas often attract copycats. Tran isn’t worried about that because of the network of well-known, loyal chefs the Munchery has built.

 

First five employees at the Munchery  in Dec 2012.

First five employees at the Munchery in Dec 2012.
What’s in the pantry for the Munchery?
Last November, Munchery had six chefs, cooking a total of 1000 items each week for about 80 customers each night with a team of five drivers. One year later, they have grown 10x in every area and sell 3000 items daily.
As the company grows 18% to 25% month over month, Tran worries about food safety and keeping the company culture intact.
“As we grow, I don’t want to lose this group. We have photos of when we, the first five people, started in a freezing cold, unheated 10 x 11 room,” said Tran. “We don’t take things for granted.  We’re here for a calling. We have chefs who say ‘Munchery is going to be my final chapter’. This is the best place the culinary world has gotten to. We’re challenging the old path to success for a chef and giving them an alternative.”
“When I first started, I thought I was going to ride this wave. Now I realize I’m riding a rocket,” said Reyes. “I’m very proud to part of the company, to be one of the original chefs, to own shares in it, to be part of shaping its future.”
“Selling the business-I don’t think about that. That’s stupid,” said Tran. “It’s more about how to get Munchery to serve more people. If you’re an entrepreneur in your 20s, you may think that. I’m 37 years old. I’m beyond thinking of doing this to flip. I want to make an impact. Let’s say we sold. And then what? No, not working is weird.”
“I want Munchery to be as well-known as McDonalds. I will go to the end of the world to do that,” Tran said./.
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