With a new chief executive officer and $4 million in fresh funding from investors including the Los Angeles-based investment firm, Upfront Ventures, Territory Foods is poised for growth.
The company recently hired powerhouse executive Abby Coleman, the former vice president of marketing and strategy at Quidsi and head of e-commerce at Diapers.com as its new chief executive and is now looking to expand its footprint and unique approach to meal delivery beyond its current geographies.
The company uses a proprietary food recommendation engine to determine its subscribers’ personal preferences to deliver them meals that are more tailored to their individual tastes.
Territory also employs a unique business model, leveraging local chefs to prepare meals according to menus designed by the company.
The distributed workforce of gig chefs allows the company greater flexibility in planning, preparing, and distributing its meals, according to Coleman.
A lifelong vegetarian and mother of two vegetarian daughters, the 39-year-old Coleman actually began her business in the food services industry as a caterer before moving on to leadership positions at Kraft Foods and Mondelez International before taking on the vice presidential role at Quidsi.
“My coming on board was really a response to a decision that the board and Patrick [Smith] made that it was time to scale the business,” says Coleman.
With the new cash the company intends to expand its footprint in locations beyond its hubs in major cities on the East and West coasts (and Texas), including: Baltimore, Dallas/Ft. Worth, Los Angeles, San Francisco, and the Washington metropolitan area.
There’s plenty of opportunity for growth considering that the market for healthy eating and personalized food is roughly $702 billion, according to the company. In 2018, one out of every three Americans reported to following some kind of healthy eating protocol with the percentage highest among 18-34 year olds, according to information provided by Territory.
“It’s rare to see businesses like Territory that hit major trends at the right time with the right product,” said Kara Nortman, Partner at Upfront Ventures. “Territory has been able to consistently punch above its weight with a very smart economic model and a product that consumers love, and we couldn’t be more excited to lean into this business with Abby and her team. Abby’s passionate knowledge of food and superb ecommerce skills combine to make her the perfect leader for Territory’s next phase of growth.”
Indeed, the company’s methodical approach to growth has been a strength that has led it to profitability in core markets like Los Angeles and Washington, Coleman says.
Territory wrings efficiency out of its network of chefs, which has a high retention rate and allows the company to act in an asset light way. Chefs are paid to prepare the meals, but provide the ingredients themselves and work as contractors rather than employees. They pocket the difference between the cost of the ingredients they use and the price they’re paid by Territory to prepare the meals.
Coleman says the business model leverages the excess capacity caterers have while offering them the opportunity to tailor their meals to suit local market tastes.
And just because the chefs are given a bit of free rein doesn’t mean that there’s any lack of quality control, Coleman says. “The emphasis is on the quality control that a product is up to our standards,” according to Coleman.
Meals are $10.95 and are designed around the needs of customers — ranging from paleo, whole 30, keto, and vegetarian options. Now, Coleman is looking to aggressively expand the flexibility and menu options available to customers.
“It’s more like a restaurant and we’re going to have an entirely new menu next week,” Coleman says. “We create over 400 new dishes a year.”
Despite the woeful performance of public companies like Blue Apron, prepared food companies are still attracting investor attention and interest — especially if they’re married with a pitch to health-conscious consumers targeting a specific diet.
Territory Foods has raised $20 million to date, including the new cash from Upfront Ventures and Lewis & Clark, while Trifecta, another purveyor of prepared foods has raised $2.6 million. And the giants are still around as well, the companies like Plated, HelloFresh, Home Chef (owned by Kroger Foods), and Sun Basket, which have raised over $500 million combined.
Source: Tech Crunch
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