Purple Carrot CEO on the Amazon/Whole Foods effect: ‘Brands are seeking out their dance partner before the music stops…’

By Elaine Watson

- Last updated on GMT

Purple Carrot CEO talks meal kits, Amazon, plated & Albertsons

Related tags Food

Albertsons’ deal to acquire meal kit company plated was a smart move for both parties, and will likely be the first of many strategic partnerships in the food ecommerce space as “brands are seeking out their dance partner before the music stops" in the wake of the Amazon/Whole Foods deal, says the CEO of meal kit brand Purple Carrot.

Speaking to FoodNavigator-USA after the plated deal was announced​,​ Andy Levitt said: “The Amazon Whole Foods deal created a real sense of urgency among strategics, it’s as if the consolidation everyone was saying was inevitable was suddenly upon us and brands are seeking out their dance partner before the music stops.

“So in that respect, the plated acquisition is a really smart move. Albertsons is looking to add more to its data and tech side and add some added sizzle to rumored plans to go public, while for plated it’s a great opportunity to reach a broader audience and leverage Albertsons buying power.

There are a lot of conversations happening right now and we’re fielding calls from several parties that see that our differentiated offering is resonating as consumer interest in plant-based continues to grow.”  

But who is the logical dance partner for a meal kit firm?

“Retailers are smart partners, but also CPG companies, as it is a great branding opportunity and chance to integrate their products into recipes,” ​said Levitt, who launched Purple Carrot – the only 100% plant-based meal kit player in the segment - in October 2014, and says he is confident it will be profitable in early 2018.

We’ve had exceptionally strong growth this year and I feel like we’re just scratching the surface of what is possible. From what I’ve been told by folks in the know, our customer lifetime value (LTV) to customer acquisition cost (CAC) ratio and path to profitability are as good as you will see in this industry; we feel very good about being profitable in early 2018.”

Purple carrot dish

launched on October 1, 2014 as a pay-as-you-go business, serving a limited part of the Northeast, Purple Carrot has since evolved to a subscription model with nationwide shipping, and claims to be the only 100% plant-based meal kit company in the market.

We’re making vegan food for non-vegans

Based in Needham, Massachusetts, Purple Carrot now has 34 full-time employees. Orders are fulfilled from distribution centers in New York, Ohio and Los Angeles, with the heaviest users being Millennials and young families with higher than average household incomes. 82% of subscribers to the vegan meals are meat-eaters, revealed Levitt.

“We always said we were making vegan food for non-vegans and reaching a segment of the population that is looking to us to help them eat plant-based some of the time.

“So far we’ve raised about $6m in equity and $5m in debt, and we’ve been extremely capital efficient compared to many of the other players out there, who are largely backed by substantial amounts of venture capital.

“They spent extensive amounts even with large losses to acquire customers in order to continue to grow with a very undifferentiated set of offerings that has led to a relatively promiscuous user base with no switching costs to move between these brands.”

Purple Carrot piloted meal kits at selected Whole Foods stores in the Northeast last year, but chose to put the program on hold and focus energy and resources on the launch of the TB12 performance meals​ with Tom Brady, says founder and CEO Andy Levitt.

“We gained a whole host of learnings from that experience and would be poised to introduce or reintroduce our meals at the retail level when the right partnership presents itself.”

Getting out of the cooking rut

Unlike some other meal kit delivery services, Purple Carrot does not, right now, offer choice. If you sign up, you get three meals per week under the 1-2 person plan, or two meals per week under the 3-4 person plan. It has also launched the TB12​ high-protein plant-based meal kit range with New England Patriots quarterback Tom Brady.

purple-carrot- TomBrady

However, the menu changes every week, so if you don’t like what’s on offer, next week will be different, says Levitt.

But what if you love what’s on this week’s menu, and want to cook it again next week, or at least next month? And don’t most people actually like having a limited repertoire of dishes they know how to make, so they are not learning something completely new every time they cook with Purple Carrot?

You’d be surprised, says Levitt. “We are considering offering more choices – things like fan favorites, as there is probably a cohort of customers that would like to cook the same things again and again when they find something they really like - but the fact it’s always new is one of the things people love about Purple Carrot.

“People really enjoy cooking dishes they have never cooked before. It gets them out of the cooking rut and generates real excitement.”

What's for dinner tonight?

Interested in navigating the direct to consumer meal kit/delivery space? And what about healthy vending?

Checkout our awesome line up of speakers at FOOD VISION USA 2017​ ​, featuring execs from Chef'd, Terra's Kitchen, Sun Basket, PeaPod and Farmer's Fridge.

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