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Another food-delivery startups joins the very, very crowded space
Parents: Do you find yourself rushing constantly, intending to prepare the best meals for your children, only to resort to PB&J again, or left-over pizza and gummy bears. It's a struggle many parents deal with on a daily basis, without a solid resource to aid in the process. Well, Wise Apple aims to change all of that.
Wise Apple is a meal-delivery service, with a unique twist. It specifically services parents, who deal with the daily struggle of preparing a healthy and tasty lunch for their kids, while juggling the rest of the elements of their busy lives. Due to the lack of time to properly prepare meals, the quality and variety of meals parents provide for their children tends to decrease, especially for single parents, multi-children households, and situations where both parents work.
Despite the current waning interest from VCs into this category, Wise Apple managed to raise $3.6 million in seed financing, for a total of $4.3 million. The new round was led by Pritzker Group Venture Capital and Levy Family Partners, with participation from Chicago Ventures, Greycroft, BoxGroup, and Irish Angels,
At the moment, Wise Apple serves the Midwest, but will use the funds to expand nationwide as consumers increasingly embrace healthy-eating and products or services that help them save time.
"Meal delivery services are a disruptive force to the food industry. Taking off in 2012, these services are now a multi-billion dollar market — and projected to grow tenfold within five years," said Rebecca Sholiton, CEO and cofounder, in an email to me. "The primary growth driver is increasing demand for convenience and on-the-go fresh foods. Due to hectic lifestyles, consumers prefer ready-to-eat meals because they reduce the preparation and cooking time."
Wise Apple started out as a solution to Sholiton's struggle – finding the time to prepare and serve a variety of balanced meals to her kids.
"We understand that each child is an individual and we want kids and families to discover and enjoy their individuality through food. By adapting recipes and exploring new menu options, we are providing families with ready-to-serve meals that are healthy, kid inspired and kid approved."
Cultural demand vs payoff
More recently, however, it seems there's been a lack of appetite to buy into this industry as market leaders lose their luster. Just look at Blue Apron, a meal-kit delivery company that went public in June at a $10 IPO price, closing at a market valuation of $1.9B. Today it stands at $5 a share, and a $1B valuation.
VCs have poured $9B into 125 food-delivery startups, causing many to believe there's just too much competition and only a handful will survive.
Wise Apple hopes it can differentiate itself from the pack by uniquely focusing on kids and having a better handle on logistics.
"There are a few key differences between our service and others," said Sholiton. "We are not on-demand. By planning ahead, we can have a more accurate prediction for volumes, decreasing food waste and increasing drop size."
She also added that she's learning from the industry. "We've had the good fortune of seeing the innovations from the companies before us like Blue Apron, and we can benchmark ourselves against them for areas like logistics, cold packaging and supply chain."
Challenges going after the consumer
One of the challenges selling directly to a consumer, one consumer at a time, is that it's tough to get volume. The question is: Should Wise Apple reach out to schools or local mom groups and organizations directly and have them buy in bulk?
"We feel passionate about maintaining the in-home customer relationship," said Sholiton. "Going directly to people's homes allows for conversations about food, healthy habits, suggestions, trends, likes and dislikes, and generally provides that direct customer feedback, which can help drive opportunities for future growth."
So what's the model?
Wise Apple offers their products through a per-week subscription basis, offering a five-meal, eight-meal, and 12-meal option.
The price per meal decreases a bit, as the number of meals per week increases, starting at $6.99/meal for the five-meal option, $6.75/meal for eight, and $6.50/meal for the 12.
To date, the company has delivered over 100,000 lunches.
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