I read the post which Shervin Pishevar of Sherpa Ventures published about their investment in on-demand meal company Munchery yesterday. I don’t know Munchery’s detailed metrics but if the company’s $125M in capital raised and PR buzz are a sign, it must be performing very well.
After reading the post, I thought about how our investment Meal Box, an on-demand meal company in Turkey, operates relative to Munchery. Specifically, I was looking to see if there are any learnings we can apply from Munchery to Meal Box.
The key differences I identified between Munchery and Meal Box, and the resulting opportunities, are below:
1. Cold vs ready-to-eat meals: Munchery delivers its meals cold to customers who then need to heat it in a microwave or oven. Meal Box delivers its meals warm and ready-to-eat to customers. We know from customer feedback that customers in Turkey don’t want cold meals. This sends a negative signal about the quality of the food. Microwaves are also less prevalent in Turkey than in the US and it takes a longer time to heat your meal in an oven. As a result, Meal Box’s approach is correct on this front.
2. Delivery trucks vs franchises: Munchery places its meals directly from its kitchen onto delivery trucks that get them to customers. In contrast, Meal Box delivers the meals to franchisee locations who then send them to the end customer. By avoiding physical real estate, Munchery is able to keep its costs low. However, it needs to plan very carefully for demand in order to avoid the waste that occurs if a meal is placed on a delivery truck but there isn’t enough demand, or more demand comes in than what a delivery truck serving a specific area has available. Meal Box considered Munchery’s approach when it was first launching. However, since real estate costs are much lower in Turkey than in the US markets where Munchery operates (especially for the off main street locations where Meal Box’s delivery only franchises are found), it’s more economical for Meal Box to operate through franchisee locations. There isn’t an opportunity for Meal Box here.
3. Pre-orders: Munchery allows its customers to place pre-orders. This helps them predict demand, manage supply accordingly, optimize delivery schedules, and reduce waste. Meal Box also offers this feature on its checkout page but doesn’t actively promote it to customers. There is an opportunity for Meal Box to do more here.
4. Centralized vs decentralized delivery personnel: Munchery performs its own deliveries. In contrast, each Meal Box franchisee is responsible for its own delivery personnel. There is an opportunity for Meal Box to centralize the hiring, training, and allocation of delivery personnel among its franchisees in the future.