Fred and I were introduced to the entrepreneur behind La Ruche by two VC’s we have known for quite a long time who are located in London. The concept is a bit like Good Egg when it comes to the farm to table concept but the best way to describe it is Etsy meets Meet-up and the content is around food. La Ruche means beehive.
I will be the first to admit I was skeptical. I know that Good Egg, Plated, Blue Apron and alike are supposedly doing quite well but I have yet to believe in their model. I like Good Egg the best because they are using food from the farmers. Plated and Blue Apron are sourcing food from generally the same places that grocery stores source and I am not a fan of that. They help the consumer make recipe choices for the week, provide them the ingredients already divided up into the perfect amount (1 tsp, 1/2 cup etc) to make cooking simple yet healthy. All I see if constant customer acquisition costs, spoilage, high labor and low margins. I invested in PlateJoy that is providing personalized menus for you each week and providing the food from local grocery stores. I like that because they are helping already built stores turn their inventories quicker and become better businesses in the 21st century. They are also tackling the weight watchers arena that is in need of a major redo.
I am all for helping the farmers become better business people and getting their food directly into the hands of the consumer. More consumers these days are focused on healthy eating. I was looking forward to checking out La Ruche and meeting the people behind it.
La Ruche provides an online platform for a local person to create a food market in their neighborhood. Instead of belonging to a CSA where you end up with the same food every single week this is an aggregation of a variety of farmers under one roof where you order 48 hours in advance what you want to get for the week (or at a few places over the course of the week). The local person who is managing that particular marketplace gets a % of the transactions, La Ruche gets a % of the transactions and the farmers get the most of the transaction.
Let’s say you live in a particular neighborhood. You get on line at La Ruche, you pick the neighborhood you are going to pick up your box in. You pick what you need, eggs, cheese, bread, perhaps local wine if they have it, fruit, etc. When you get to the market at the scheduled time the farmers are there. They have already wrapped up your pre-ordered package but you must go to each provider to pick it up. Essentially pushing you to meet and get to know the person providing your wares. The difference is that you have already ordered, the farmers know exactly what they need to bring that day (and they go home with nothing left at the end of the day making them better business people) and a community is born. Also the transactions happen on the web before you pick up the food so there is no exchange of cash at the community gathering.
I like this model. Meet-up has proven to be a success giving people the ability to create groups around like minded topics. There is a person who has started and manages the group. In essence, La Ruche is not changing behavior but learning from it by giving the person behind each food group the ability to make money and obviously they have to manage it. Like Etsy, each person is being entrepreneurial with their own shop. La Ruche is providing the platform and helping each community roll it out. They now know what it takes to be successful and how long it takes. They have essentially created a franchise model with the meet-up person running a better business for the farmers vs them just showing up at the local green market every week with the products they believe they need to bring. This way they know exactly what they need to bring and how much.
I also thought this model would only work in Europe because the consumer behavior here is very different when it comes to food shopping. People in Europe shop daily. Their refrigerators are not the size of the large American ones. But the desire in the states to support local and eat local is changing. After watching La Ruche in Paris, hearing the concept behind it and talking about it for a few days, I think this could be a win win in any country.
Lots of questions still but what the entrepreneurs have built in La Ruche is quite impressive. It has grown quickly and it is all about community and food. Some of my favorite topics.