Thrive Market experiencing ‘dramatically’ higher demand: ‘This is part of a massive shift toward online…'
CEO and co-founder Nick Green told FoodNavigator-USA: “We’re seeing more of our members shift more of their shopping to Thrive Market compared to other grocery stores they might have shopped at before.
“So, a member who used to order every three weeks and did about a third of their grocery shopping on Thrive Market, now might shop every week and be doing 80 to 100% of their shopping with us.:
He added: "This is part of a massive shift toward online: higher frequency, bigger baskets, greater share of wallet.”
‘We’ve seen huge growth in our Thrive Market brand’
Asked about shopping behavior on the site, he said: “Members are focused on the essentials: healthy food and snacks vs. categories like beauty or home goods.
“Members are even more focused on quality and safety than ever before; we’ve seen huge growth in our Thrive Market brand [which now accounts for 25% of sales], which people know and trust to provide high quality, ethically sourced products. We're proud to be keeping our members safe, limiting their time in crowded grocery store environments by delivering organic, non-GMO grocery and household items to their door.”
150 new hires in fulfillment centers
Jeremiah McElwee, SVP merchandising and product development, added: “Scaling operations to keep up with heightened demand has been our greatest challenge. Fortunately, our brand partners have been incredibly supportive and responsive, helping us get back in stock on popular items quickly.
“The items we’ve had the most challenges with have been ones where demand spiked 30-50x, like hand sanitizer and toilet paper, or Thrive Market Brand items where we have longer lead times, but even there, our direct relationships have enabled us to move quickly to get back in stock and build up supply so that we stay there.
“On the fulfillment side, we’ve made over 150 hires to make sure we can keep up with the order volume. We’re proud to be one of the few companies hiring out there right now.”
Los Angeles-based Thrive Market - which was launched in 2014 and now has more than 700,000 members (who pay an annual fee of $59.95) - originally focused on a delivering a curated selection of top-selling shelf-stable natural and organic brands at 25-50% below traditional retail prices.
However, the platform – originally billed as ‘Whole Foods meets Costco online’ - has been steadily building its own brand over the past several years, offering everything from coffee to frozen meat and poultry, collagen peptides, ghee, olive oil and almond butter, with private label now accounting for "25% of sales and growing."
It now offers more than 400 private label food items, plus a wide range of personal care and beauty products, vitamins and dietary supplements.
'There's no good solution when you have five times the amount of demand than you can actually process'
In an Instagram Live Q&A with members on April 14, Green said the company – which has more than 700,000 members and processes orders via fulfillment centers in Indiana and Nevada - has been limiting store hours to cope with an explosion in demand, but reckons it should be able to get back to regular hours by the week of April 27.
“The reality is there’s no good solution when you have five times the amount of demand than you can actually process…
“Right now, transit times are about the same, but the time that it takes for us to process orders has gone up dramatically and the reason is because we’re getting dramatically more volume, and dramatically more demand.”
‘We’ve made a ton of progress on the average processing time over the last two weeks’
He added: “The good news right now is that we’ve made a ton of progress on the average processing time over the last two weeks so that backlog has come down on the west coast states where we’re shipping in under five days and on the eastern part of the country we’re shipping in under eight days and that is continuing to come down.
“My promise to you is that we will get through it and we will get through it relatively quickly … the expectation is that in about two weeks from now we’ll be back to the 12-24 hour SLA [service level agreement] for processing time.”
[April 14] ‘We’re now at about 85% in stock rate on our third-party brand partners’
As for purchasing behavior, he said: “Like a lot of retailers, we’ve been completely wiped out on those products [hand sanitizer, toilet paper, and canned beans] that are at 30x the demand level we’d normally see.
“We’ve placed the biggest POs [purchase orders] in our company’s history across hundreds of our vendors… and we’re now at about 85% in stock rate on our third-party brand partners.
“The one place we’re having more of a challenge is on our own brand Thrive Market goods and the reason for that is because in many cases we’re working directly with producers of the raw commodities… and it takes more time for them to ramp up production.”
‘We want to run the safest fulfillment centers in the country and I really believe we’ve achieved that’
Asked about how the firm was protecting employees in fulfillment centers, he said: “We’re going beyond what the CDC requires to ensure our facilities are safe, clean, and healthy – we want to run the safest fulfillment centers in the country and I really believe we’ve achieved that.”
Safety measures include mandatory temperature checks for everyone entering the buildings, gloves for all employees touching products or packing boxes, masks for every employee, full station wipe-downs throughout the shift, full facility cleaning at the end of every shift, and enforced social distancing.
Staff are also being offered hazard pay and double-pay for working overtime, he said. “We’re also providing automatically approved leave for any members that have to stay at home due to a family member, because of their own health condition, or for any reason they feel unsafe coming into the building… and we're saying your job will be waiting for you when you get back.”
