When Thrive Market launched its online marketplace in 2014 selling non-GMO and organic certified products (and products with other trendy claims including Paleo, grain-free, and 'Big 8 allergen free'), the expectation was that its first wave of members would be Whole Foods shoppers looking to save money on health and natural household essentials. Instead, what the online retailer witnessed was a much broader reception of its business model.
"What actually happened was almost instantly, we were spread out across the lower 48 states almost equally and the socioeconomic range was all over the map," Jeremiah McElwee, senior vice president of merchandising and product development at Thrive Market, told FoodNavigator-USA at the Natural Products Expo West show earlier this month.
"We literally started fulfilling our mission right from the get-go and we have continued to see that trend play out."
As a socially-driven company, Thrive Market's mission is to democratize access to better-for-you grocery items to all Americans regardless of geography or income level. For every member who pays $60/year to shop on Thrive Market, one membership is donated to a lower income family, teacher, veteran, or first responder, McElwee explained.
"We have over half a million paid members that shop the site, we have tens of thousands donated memberships."
Thrive Market has completed large membership drives with organizations such as the Pine Ridge Native American Reservation (the second largest Native American reservation) and disaster relief initiatives all over the country, according to McElwee.
"We're a market that just does good."
Who is shopping on Thrive Market?
Thrive Market differentiates itself from other online retailers with its "hyper-curated" approach to products and detailed filtering options where users can filter by their specific dietary needs or environmental/social causes.
"On our site you can sort by 70 values, and they range by specialty diets (Paleo, keto, vegan etc) all the way down to wind-powered to solar-powered to women owned companies," McElwee said.
Thrive Market sees a "disproportionate amount" of specialty diet shoppers including food allergy sufferers.
"We get a lot of positive feedback from our audience because it makes it such a convenient shop."
Thrive Market brands vs private label
Thrive Market was built on its partnerships with brands that are "pushing the envelope," according to McElwee.
"We love our brands and frankly we feel like the innovation and pioneering comes from brands and entrepreneurs who are trying to solve problems. We love being first to market, we love launching new brands, we love partner brands that are doing innovative things," he said.
To be one of the brands to make the make the cut on Thrive Market, being USDA certified organic and non-GMO are the baseline criteria. Beyond that, there are a few other elements that tend to pique the interest of Thrive Market's merchandise team, according to McElwee.
"We love regenerative, we love certified biodynamic products, we love products that are pushing the envelope in terms of their supply chain credentials. Beyond that, the next hurdle to jump is additive free. We look for preservative-free, we look for no hydrogenated oils, no artificial colors... the cleanest of the clean in terms of products," he added.
While brands receive a spotlight on Thrive Market's site, the company's private label line of just over 500 products has become a core pillar of its business. Private label products now account for nearly 25% of sales, according to the company.
"I always like to say that the minute a category becomes commoditized and all you’re doing is competing on price, that’s when it’s the perfect candidate for private label," McElwee said. Expanding its private label set is a very traditional retail playbook activity, acknowledged McElwee, but for Thrive Market it serves an added purpose.
"In our model it becomes absolutely essential as we serve less fortunate, underserved communities that can’t afford to buy organic beans or organic tomatoes," he said.
According to McElwee, Thrive Market has seen a number of trends take off among members on the ingredients side including a growing interest in collagen (starting with beauty and supplement products) and ingredient of the moment CBD (cannabidiol).
McElwee shared that Thrive Market currently sells CBD supplements but will wait for the regulations "to shake out" before adding CBD food products to its site.
Two trends you can expect for Thrive Market to strongly pursue are expanding its frozen food business across categories (both with new brands and private label) and regenerative agriculture.
Thrive Market launched with frozen meat and seafood products last year.
"We’re dramatically expanding into frozen; it’s done incredibly well for us," noted McElwee.
"The other and more subtle thing that I’m really excited about is regenerative agriculture and the impact that we’re able to have within the supply community," he added.
"You’ll start seeing more communication for us and actual products you can purchase with the regenerative label on them soon."