The Idea Behind Munchery
Tri Tran, Van Tran, and Conrad Chu founded Munchery back in 2010. The co-founders of Munchery came up with a brilliant idea and started the company. The idea was to hire a team of excellent gourmet chefs that would cook a different variety of dishes while continually changing their menus. Munchery also allowed its users to order various foods from their menu and have it delivered straight at their doorstep. It further allowed its customers to rate the dish and the chef as per their satisfactory level.
Munchery – A Brief
The idea of Munchery of having on-demand gourmet meals permitted the company to raise over 125.4 million USD in its total eight funding round. The valuation of Munchery at its peak was almost over 300 million dollars. The company had over 20 investors that had invested in Munchery. Munchery had a total of three co-founders, namely Conrad Chu, Tri Tran, Van Tran.
Before its failure, Munchery had between 100 to 250 employees. This American based startup started its journey in 2011, but by 2019 it was declared bankrupt due to multiple failure causes. To know more about the reason behind the failure of the food and beverage startup, Munchery, continue reading below.
The Growth Story of Munchery
Munchery observed a compelling growth at its beginning. The San Francisco-based up startup did quite well in initial years as on-demand microwavable gourmet meals. Since the company was getting success since its early days, Munchery decided to outdo its rival Blue Apron in the year 2015. They branched out to offer ingredients so customers could prepare their food along with appropriate recipes to assist them with meal preparation. Munchery got lots of media buzz while soon expanding to Seattle, Los Angeles, and New York.
The company outperformed Blue Apron along with every other on-demand food delivery company. It attributed to their convenient microwavable food along with the quality control food they offered. Since other on-demand food delivery startups depended on different restaurants, Munchery took pride in its QC because other competitors couldn’t provide the same. Another pride of Munchery was its 100% natural ingredients and efficiency in working with their schedule-ahead model. Munchery consistently worked on optimizing their couriers.
What went wrong?
Munchery’s business was going seamlessly well. Continue reading the below passage to understand what went wrong with the company after its initial success.
A celebrity chef, Pascal Rigo, served at Munchery as Chief Customer Experience Officer at one point during its peak but left the company in 2015, just after five months of joining. In an interview with San Francisco Chronicles, Pascal said that he has seen startups doing well in either food business or delivery. He further said that he has seen no one achieving success by doing both.
Later, Munchery started getting many struggles, since juggling both tasks simultaneously. Munchery soon realized that their original idea of serving heat-and-serve meals had various constraints geographically. To ensure quality, they had to deliver the food from their kitchens in a short drive. To overcome this, Munchery started working on further expansion, setting up expensive kitchens in various locations of Seattle, New York, and Los Angeles. However, these measures were too expensive for the company both logistically and financially. As a result, most of their costly and new kitchens got shut down by May 2018. Moreover, Munchery got new competitors in the market; Uber Eats and Door Dash. Munchery could not match the variety they offered since they could source multiple restaurants.
Failed Attempts to Acquire More Customers
Apart from the reasons mentioned above, another cause behind Munchery’s downfall was that it failed to attract new customers. Munchery tried to gain more customers via aggressive discounts and various other offers like 20 USD off for the first two orders, free 1-month free subscription plans for first-time users, and more. Despite the efforts, these offers could not gain or retain more customers, making no significant impact on the company in this sector.
With the disappointing events, Tri Tran stepped down from the CEO position to be replaced by James Beriker. He took various measures and employed other layoffs to improve the situation. James also attempts to increase the prices, but that only led to further pitfall for the company. Increasing the amount didn’t work for the company because of the extended competition in the market.
Even though Munchery had an ambitious mission, the startup could not deliver what it initially promised. Munchery declared bankruptcy in the year 2019 and closed its doors to its users.