Founded in 2009 by licensed acupuncturist Neka Pasquale, Urban Remedy ships freshly prepared cold pressed juices, salads, meals and snacks directly to customers nationally from its HQ in Point Richmond, CA, and operates 13 retail locations and 30 Whole Foods kiosks across California.
The fastest-growing operation is the kiosks, Urban Remedy CEO Paul Coletta told FoodNavigator-USA.
“The direct to consumer online part is the smallest part of our business today, while the fresh food kiosks – which we call non-traditional wholesale - continue to be largest and fastest-growing part of our business. They grew at 350% last year while our overall business grew over 100%.
"So today, by far my most important partner is Whole Foods. We opened our first fresh food kiosk with them only a little over a year ago and today we have 30... they have been a phenomenal partner.”
The omni-channel strategy…
However, the omni-channel strategy is really working for the business, said Coletta, who said the brand planned to open another five to six company-owned retail stores this year and move into a second market outside the Bay area.
“All of our channels – the company-owned retail locations, the fresh food kiosks in Whole Foods and other locations, and the direct to consumer business - work together to be greater than the sum of their parts.”
Aside from the fact that consumers may discover the brand in one channel (eg. a Whole Foods store) and then buy the products online if they don’t live in northern California, having an omni-channel operation has also helped Urban Remedy succeed whether others have failed in managing waste, claimed Coletta, who joined the business in 2014.
“First, having three channels has just helped us scale more quickly. When you are trying to scale a fresh food business, food waste in your #1 enemy and an omni-channel model goes a long way to mitigate that challenge.
“For example, if you have your own retail stores, you can develop new products from concept to launch in six to eight weeks and test them out before you bet on them bigger by putting them into wholesale or online. In our retail stores, we measure repeat rates via credit card data, and for the past 12 months, roughly 70% of retailer customers that come into an Urban Remedy store once, repeat, which is an extraordinarily high rate, so that indicates to me that if you try it, you love it and you come back.
“We’re also leveraging people and labor across our channels, so store managers in our 13 stores are also the people managing the Whole Foods Market kiosks, which is some cases are only blocks away in the same communities.”
No immediate plans to sell items to retailers individually
So where does the Urban Remedy brand go from here? And is Coletta entertaining requests to supply Urban Remedy branded products individually to retailers on a wholesale basis, rather than via ‘store within a store’ concepts?
“We’ve had tremendous in-bound interest from various natural grocers and other food channels asking us to distribute our individual items for sale in individual categories [eg. cold pressed juices, snacks etc], but we have resisted that because we are taking more of a lifestyle approach to our merchandising," he said.
“We are trying to tell a story which is all about clean and fresh food and that is a lot easier to do when you are trying to pull together a comprehensive offering rather than having a diffused offering throughout the store. And to be honest, growth has not been our challenge; we want to grow in a way that will set us up for success in the long term.”
You need more than capital in this industry to be successful
So what does General Mills 301 INC - which has invested in a flurry of brands from Beyond Meat and Kite Hill to D's Naturals in recent years - bring to the mix apart from a large check?
“Scaling a fresh food business with products that have a little more than three days of shelf life is incredibly challenging, so having a partner like 301 INC at our side and helping us make the right decisions is hugely… let’s call it an unfair competitive advantage," said Coletta.
“That’s what you need in this industry to be successful, you need more than capital – although we obviously need this to bring on more people, build new capacity and introduce more automation… but you need smart people that are aligned with your values and your vision.”
More specifically, he said, the 301 INC team could help his team with production capacity planning and access to new points of distribution.
“John Foraker [former CEO of Annie's and current co-CEO at babyfood brand Once Upon a Farm, who has just joined Urban Remedy’s board] is a friend and someone that I hugely admire; if I could have picked anybody to join my board he was always at the top of that list.
"He’s been a passionate advocate for the organic food movement and has unparalleled experience in running an organic food company, so I think I am personally going to hugely benefit from his counsel.”
Paul Coletta, CEO, Urban Remedy (pictured)
We make our own food
While many early stage companies work with co-packers, Urban Remedy’s business model – which revolves around “ultra-fresh” foods, has necessitated in-house production, and this won’t change as the company expands, said Coletta.
“We have and always will – with very exceptions – manufacture our own food to maintain the high food quality and safety standards that our customers have come to appreciate. Our top priority as we grow is to grow with a high quality ultra-fresh products, so as we move to other markets, we'll have to build more fresh food hubs.
"We're talking about unprocessed nutrient dense foods with only three days' shelf life [the cold pressed juices in PET bottles are treated with HPP - high pressure processed].
"Over the past four years, we have really resisted the temptation of going outside the Bay area because we've watched a lot of other food companies go too far too fast and we haven't made that mistake. So when we go into our second market, we will go into that with a satellite food production facility."