May 15, 2018

The Food Industry Is Still A Tough Gig

News came last week that meal delivery company Munchery was scaling back significantly – closing their offices in LA, New York, and Seattle to focus exclusively on their home market of San Francisco. A move that shows that even with $120M in disclosed funding, there are no guarantees in the food industry.

Started in 2010 in San Francisco by an engineer, the company aimed to provide private-chef created dinners delivered to your door (as opposed to restaurant deliveries). In 2016 the company expanded to much of the West Coast metro areas with an eye, based on news reports from 2017, of expanding nationally ‘soon.’

But yet, even with the money and the strategic vision they’re now cutting back instead. Did they expand too quickly and burn through too much cash trying to recruit new customers? Did they find other markets differ too greatly from what they knew of their San Francisco clientele? Are consumers, as a whole, not interested in chef-prepared meals versus eating out/taking out/getting delivery? Were the profit margins in line to help the company grow as it wanted to?

Without any real insight into what caused this backtracking there’s no way to say for sure – and chances are it may be this and/or a combination of a million other factors we don’t know about. But even with a ton of money behind the company, it does prove that the food industry can be a very big bear to wrestle with.

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