La Ruche
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.
Comments (Archived):
This is really wonderful! I’d long wondered your thoughts on this foodie niche. I had never heard of PlateJoy, but I’m a long time user (but only once a month) of Blue Apron. I really adore their service but mostly as a tool that has taught me to cook and introduce me to new ingredients. Now that I’m getting the hang of cooking, these new models make definitive business sense in comparison.
Felicitations. Curious how do these suppliers overlap with the ones that offer their goods to fine restaurants who often have direct relationships with farmers?
They are really just streamlining the greenmarket world
So, theoretically, they would “compete” with the local farmers markets, right?Instead of the farmer setting-up a table and not knowing what the day looks like, they can sell their produce directly via La Ruche to consumers, and just worry about delivery. Is that correct?
They help the farmers run better operations.A local person, could be you, goes on the LaRuche website. You put in that you want to create a greenmarket inn your neighborhood. You get approved. You then reach out to the local farmers who you want to be carrying products at your greenmarket. You get your community to go online and see what your greenmarket is carrying. 48 hours in advance they place the order with the farmers for your particular greenmarket. Then the community shows up with the farmers that same day and time. The goods are already packaged individually for each order. The community gets the ability to interact and talk to the farmer, and the farmer gets to know the community. They community walks away with their local goods for the week. The farmer leaves with an empty truck knowing before he/she got there exactly what to bring and how much they would make.This makes for a much more efficient market on all sides.
Love it. It makes a lot of sense. It reminds me of the VarageSale model of expanding via local micro-markets. I can see this working gradually into North America. It needs to start at the grass root levels as you aptly described.
I can too. If anything it can be of help for the already established Greenmarkets to become more efficient.
Love this honestly. I think this is the future of the perishable supply chain in many ways.Now that I have one foot in the food business, I understand that the biggest change, the largest brand building opportunity, is built around disruption in distribution.Perishable supply and perishable distribution has kept artisanal food in the dark ages.No more.
No more is right
Great post. This sort of thing is actually happening regularly at the local level in mid-major cities, and has huge potential. A lot of CSA hybrids in the states that are run by the under 40 set follow this model, and for the reasons you outlined it makes a lot of sense for them. My experience is that they are mostly using informal networks to do so currently. At the end of the day people who love their craft don’t want to be marketers, they want to connect to people around that craft…and on the consumer side there is real demand for it…have seen it firsthand in Colorado, Arizona, and New Mexico.
the demand is absolutely there. grows daily
This idea is really growing on me.
Is the goal to disrupt or aggregate the active CSA market?
Aggregate.
I have seen a few of these startups. It’s an incredibly hard logistical problem. One thing that I think La Ruche could do is enable more farmers, and increase the supply. Then it works. It’s a pretty cool concept. As you know, my wife and I are pretty into farming!
There are a lot of companies in the US and the UK that utilise this methodology- mainly people purchase boxes of fruit or vegetables or both of whatever is in season and pay for it weekly or biweekly. Farmbox direct mainly works with farmers on the east coast. https://www.farmboxdirect.com/. There are many others in Texas, California, Washington State. People like buying from their local farmers as Whole Foods and other Markets have been discovering. Entrepreneur Kristina Carrillo-Bucaram was one of the first to start an organic produce co-operative in Texas. https://www.rawfullyorganic…I think this is all inevitably moving towards the end of the hypermarket.
I’ve yet to see a business model that I really think scales permanently. That’s what I love about LaRuche. It has proven that the model works
Ah I see. This company does fairly well I think http://www.riverford.co.uk/…They deliver 47K boxes/week around the UK utilising a franchise model. I think what works for people in the US and UK is that boxes are delivered to your door. I can see that in France people like to spend time more time with their local grocer and prefer to pick up their package.
What an incredibly deft breakdown of this hot (maybe too hot?) sector.It makes me think how companies doing something truly unique need partners and investors who intimately get what they’re doing. And how rare that is. And how depressing that rarity is. And how even more depressing it is that, because actually knowing what you’re doing is rare, fluff is what fills the pages of TC, and sets the bad example for the next crop of entrepreneurs. Sigh.Either way, La Ruche sounds incredibly cool and I’m happy to see your part in making their vision happen!
I am in for the ride. It is a USV investment. 🙂
The funds may have come from USV, but this has your name written all over it. I think we all know who played consigliere on this one. 🙂
lol
I love that shoppers get to meet the farmers. Is that one of the key things that makes this different from Farmigo in the US?
only products from the farm.