digital

BY SARAH HENRY// ILLUSTRATIONS BY JACK PERTSCHUK

In the dark on digital dining options? Don’t know the difference between AmazonFresh and Zesty? Curious about how to source local seasonal foods online? Welcome to the newly disrupted food chain, where groceries, meal kits, and takeout, from fast food to fine dining, are available with just the click of a mouse or swipe of a smartphone.

These online platforms are popping up across the country with the promise of farm fresh food or fully cooked meals and the convenience of home delivery. And they’re gaining traction, in large part, due to the proliferation of mobile devices and tech innovations that have hacked a food system sorely in need of a makeover.

The East Bay serves as an incubator for several web-based edible experiments. Most are rooted in appealing to Americans’ fondness for convenience. Some have socially conscious goals: They want to support local producers, communities, economies, and ecologies. These edible entrepreneurs also want to offer a healthy alternative to America’s broken food system, with its emphasis on industrialized agriculture and processed foods. Some seek to get people cooking. Others just look to feed a ravenous public quickly and affordably.

Clearly, technology is on the menu. Sixty-three percent of adults use restaurant-related online options, according to a 2013 survey by the National Restaurant Association. More than half of adults in the 18–34 age range use the Internet for takeout food delivery or restaurant reservations, according to the same study. Some 29{94d79dd6af1e87a94e700e4c297236468333f22e27ed5757b44711974a9a4b91} of shoppers aged 45 to 49 buy food and beverage products online, according to a 2012 report by The Checkout, an ongoing survey of shopper behavior. From tabletop tablets for ordering at restaurants and Square’s digital tipping platform, to online Yelp reviews and groceries delivered via personal shoppers, the Internet is dramatically changing Americans’ eating experiences.

Naturally, venture capital funding is pouring in. Where there’s a market, there is money to be made. In 2013 more than $1.6 billion was invested in U.S. food-related tech companies, up 33{94d79dd6af1e87a94e700e4c297236468333f22e27ed5757b44711974a9a4b91} from 2012, according to the consulting firm Rosenheim Advisors. Expectations for food start-up funding are even bigger for 2014, with $1.2 billion in private equity raised in the first six months alone.

Here we highlight local web-based players hard at work wooing the public with the bait of tasty vittles ordered online.

Kits Designed to Lure People Into the Kitchen

Stacey Waldspurger’s Tomato Sherpa meal kits allow people to skip the grocery shopping and still get a home-cooked meal on the table.

Stacey Waldspurger’s Tomato Sherpa meal kits allow people to skip the grocery shopping and still get a home-cooked meal on the table.

The meal kit market is getting crowded. These programs court customers who seek to channel their inner Julia Child but want to outsource the legwork of grocery shopping and the brainwork of menu planning to someone else. Blue Apron, Platejoy, and Plated are national platforms already out in front in this arena and available locally. (See: On Line Ordering A to Z.)

Berkeley is home base for one such meal kit maker. Tomato Sherpa launched in August 2013 from a 4,000-square-foot facility. As their name implies, they do the schlepping: The business delivers recipes and ingredients in kits that come conveniently sorted and pre-portioned, so that anyone can whip up a meal within 30 minutes. Each kit offers recipes tested by an experienced home cook, illustrated with step-by-step images and instructions. Founder and CEO Stacey Waldspurger says the recipes are simple enough that even a total amateur behind the stove can get a meal on the table. Her program caters to the health conscious (75{94d79dd6af1e87a94e700e4c297236468333f22e27ed5757b44711974a9a4b91} of ingredients are organic and meals are portioned at between 500 and 700 calories) and the sustainability minded (reusable packaging).

Tomato Sherpa is attempting to stand out from the pack by cultivating accounts with local employers as part of their workplace wellness programs. To that end, the enterprise has targeted businesses that embrace both corporate responsibility and employee health. Ninety percent of their orders come in through such employer programs. With around 20 companies currently in the fold, they make approximately 800 meals a week for about 250 subscribers. Tomato Sherpa delivers kits to workers at offices such as Pandora in Oakland, Workday in Pleasanton, and CSAA in Walnut Creek. A just-announced partnership with San Francisco–based corporate consulting firm Mercer may see growth rise exponentially. Waldspurger projects the collaboration could boost her customer base to around 2,000 by June 2015. Since Tomato Sherpa HQ could generate as many as 20,000 meal kits per month, Waldspurger has ramping up in mind and is actively seeking angel investors.

Customers can choose from an online menu that features meat-free, dairy-free, gluten-free, and soy-free options, along with meals that appeal to carnivores. Recent offerings include Citrus Cilantro Chicken with Roasted Sweet Potato and Mustard Greens; Pork Chops with Oven-Fried Okra; and Gemelli with Mushroom and Walnut Pangritata. The company partners with sustainability minded Bay Area food producers such as Marin Sun Farms, 4505 Meats, Siren Fish Co., Monterey Fish Market, and Veritable Vegetable.

When my family gave Tomato Sherpa a try on two busy weekday evenings, the kits earned a thumbs up for flavor, portion size, and ingredients that keep things interesting in the kitchen. The Buttermilk Soccas, for instance, are made with chickpea flour dotted with black sesame seeds. Sumac lent a bright addition to the salad. Ordinarily, the teen would have skipped a pasta dish studded with mushrooms, but in the name of research he wolfed down a bowl and dubbed it delicious.

The activity involved just enough technique to make this modest cook feel like she was preparing a meal. The most labor-intensive tasks were de-stemming fresh herbs and chopping vegetables. Everything felt fresh and … well … home-cooked. The only quibble was a craving for some Parmigiano-Reggiano to dust over the gemelli dish. Happily, that was already in the fridge.

Regular customers share similar stories. “Meal planning stresses me out—I know that sounds dramatic but it does,” admits Noelle Birky, 37, who has ordered three meals a week through Tomato Sherpa for the past year. “Now that we order Tomato Sherpa we rarely go to the store or eat out at restaurants, and I’m cooking things like raviolis made from wonton wrappers, samosas, and curries that I would never have done on my own.” Birky has also discovered produce such as kohlrabi, fava, and chayote, thanks to the meal kits.

Birky, who lives with her boyfriend in Albany, came to Tomato Sherpa after trying other meal kits including Blue Apron and Plated. “We’ve stuck with Tomato Sherpa because it’s everything those kits are not: They’re not local and they come in the mail in tons of packaging, which is pretty horrifying. The quality of the ingredients is better with Tomato Sherpa, too.”

Birky’s experience echoes what Waldspurger hears in her travels. Most customers come first for the convenience, says the CEO, and they stay for the fringe benefits. Tomato Sherpa boasts an impressive 65{94d79dd6af1e87a94e700e4c297236468333f22e27ed5757b44711974a9a4b91} retention rate. Waldspurger points out that meal kits encourage people who might ordinarily order fast food or takeout to cook at home, exposing them to fresh ingredients, new foods, and different cooking techniques. “Customers tell us they enjoy learning new skills, mastering a recipe, and understanding whole ingredients,” she says, “but as important is the fun factor of cooking with a partner, kids, or the whole family. It’s this community-minded aspect of making a meal together that draws people back.” It’s not just time-strapped families with small children who seek out the service: Experienced home cooks wanting to get out of a rut, and young professionals, many of whom never learned to cook at home, also subscribe.

That matters to Waldspurger. “It’s crucial to preserve the cultural experience of cooking,” she says, “something that seems to be slipping away with each generation.”
Prices range from $9 to $10.80 per person, with a 10{94d79dd6af1e87a94e700e4c297236468333f22e27ed5757b44711974a9a4b91} discount for workplace customers. Orders go out every Tuesday; the minimum order is $18; the average customer spends $36 a week, typically two meals though some choose to buy four at once.

Waldspurger came to the concept, ah, organically. A mother and MBA student at Presidio Graduate School in San Francisco, she was so busy she found it hard to find time to cook for her growing family. “I’m not a very good cook, so when 4pm rolled around and my husband would call and ask what was for dinner my gut would sink,” she says. Figuring she wasn’t alone, she banded together with fellow business students on a food platform project that proved a model for her new business.

Tomato Sherpa began with $100K from friends and family. Their investment in the company has grown to $500,000, says Waldspurger, who wants to expand the model beyond the Bay Area next year once outside funding is secured.

These kits aren’t without critics. Some consider such services elitist—a convenience for the pampered class when many in the United States struggle with hunger, obesity, and lack of access to healthy food.

“We’d like to offer meals for all different economic levels and even subsidize people of lower income levels, once we’ve scaled up and become profitable,” says the Mill Valley–based 41-year-old, a marathon runner who says she’s in this business for the long haul. “We’ve proved the model by trying to fix a problem at the center with people who are less price sensitive,” adds Waldspurger. “We hope down the road to be a part of disrupting the food supply chain for all.”

SpoonRocket Lifts Off With Fast Food Delivery

Hungry teens meet a SpoonRocket driver at the curb. (Photo by Jack Pertschuk)

Hungry teens meet a SpoonRocket driver at the curb. (Photo by Jack Pertschuk)

Two UC Berkeley grads want to hack the fast food delivery system. Their plan: making meals for just 8 bucks and dropping them at diners’ doors. (When they first launched, meals cost $6.) That’s the premise behind the budding business called SpoonRocket, launched in June 2013 by Anson Tsui and Steven Hsiao. CEO Hsiao calls it “Fast Food 2.0.” His competitors, he says, aren’t really similar new online offerings like Sprig and Munchery, but fast food behemoths like McDonald’s, Taco Bell, and KFC. “SpoonRocket is a new model for fast food,” says Hsiao, who graduated from Cal in 2009. “We offer affordable, accessible food made with better quality ingredients than traditional fast-food services provide.”

It all started at school. The frat house brothers created a series of late-night food delivery services, which eventually went under the apt umbrella title Late Night Option. Their first effort: Pho Me Now; Hsiao made the noodle soups and Tsui, now SpoonRocket’s CTO, handled delivery. Not all their offerings were wholesome comfort dishes: after all, they were feeding students craving carbs and sugar while finishing a paper or studying for an exam until 4am. In its heyday, one of their services, Munchy Munchy Hippos, dished up Philly nacho cheese steak fries and deep-fried Oreo cookies.

But the boys grew up, or at least left the college scene. They decided it was time to get serious about serving a gap in the meal delivery market for busy young professionals like themselves. In July 2013, after four years of serving students, they shut down their late-night services to focus on developing SpoonRocket. The company started with service in the East Bay, adding San Francisco in February this year.

Like a lot of food options in the tech world, they’ve done well on the funding front. They pitched their plan to Y Combinator, a Silicon Valley incubator program for budding entrepreneurs and raised $2.5 million in seed funding. And then they attracted investors like Foundation Capital and General Catalyst, which combined have ponied up $10 million for the startup.

The East Bay service delivers lunch and dinner in Albany, Berkeley, Emeryville, and Oakland. SpoonRocket now moves thousands of meals a day, according to Hsiao, 29, who taught himself to cook at home. His family, first generation Taiwanese immigrants, ran an Asian bakery in Southern California. With a fulltime staff of around 45, SpoonRocket contracts with close to 100 drivers; the fleet is outfitted with heating units that can hold up to 60 entrée servings.

SpoonRocket’s menu changes daily and features options for vegetarians and meat eaters. Delivery can take as little as 10 minutes, though this writer’s delivery took 50 minutes after being quoted a 20-minute window. To be fair, the company kept in touch about the delay. Customers can order via the web or smartphone app and drivers accept tips. Customers get a two-minute heads up before the car arrives so they can meet the driver at the curb to collect their order.

We took SpoonRocket for a test ride with an order for four items: Butternut Squash Ravioli, Vegetarian Cobb Salad, Baked Lemon Wild Caught Alaskan Cod, and a Blueberry Acai Smoothie. The heated items resembled airline food in taste, smell, and texture, the teen announced; my sentiments exactly. The fish was dry and flavorless, the ravioli rendered mush, and the broccoli sadly overcooked. After a couple of bites, both ended up in the compost. The salad was unremarkable, though fresh, and we washed it all down with the smoothie, which was inoffensive but relatively tasteless. I ended up cooking pasta for the adolescent. We’d likely not try it again.

Beginner’s bad luck? SpoonRocket has its devotees, some who order twice a day. Take Berkeley realtor Herman Chan, 36, who orders the service three or four times a week. He gives it points for speed, calorie count, and cost. “The food can be hit or miss, but what do you expect for eight bucks?” says Herman, who appreciates the convenience of ordering on the fly. He’s a fan of that cod dish but agrees the vegetables—especially the broccoli—need some work.

Sure, there’s always room for improvement, says new top chef Barney Brown, who joined SpoonRocket about six months ago after a long culinary career in independent dining, most recently at Neiman Marcus’s Rotunda in San Francisco. He’s tasked with creating menus for the service and oversees meal production in several commercial kitchens by contracted caterers that the SpoonRocket team declined to name. Given the outsourcing of the cooking, Brown isn’t able to point to local food vendors that the caterers contract with, though he says they seek out wild-caught, sustainable fish and the best available produce at a competitive price. “Our customers want simple, accessible, affordable comfort food that they’re familiar with,” says Brown. “Over time we may come up with a tiered menu with a price point to match so we can offer more upscale, sophisticated dishes.”

Fine Dining Folk Can Get It Delivered, Too

UC Berkeley seems to be churning out food tech entrepreneurs in the time it takes to boil water. Up next: Four Cal alumni who founded Caviar, a digital delivery service hustling independent restaurant-quality fare to diners who are too tired to leave the house or don’t want to deal with the hassle of traffic, parking, or long waits for tables at popular restaurants.

Caviar rolled out in San Francisco two years ago and launched its East Bay service last spring. Most of Caviar’s restaurant partners haven’t typically offered delivery in the past and the partnership with Caviar is an exclusive arrangement. Caviar’s local lineup includes favorite spots in Oakland such as A16, Bowl’d BBQ, Hawker Fare, Homeroom (see story on page 16) Hopscotch, Ike’s, Nido, Phat Matt’s BBQ, and Plum Bar. Berkeley boasts Comal, Gregoire, Phil’s Sliders, and Sliver in their fold.

“Caviar has opened the figurative door to more business and expanded our nest to more people,” says Nido co-owner Cory McCollow. “Their customer support is excellent, as good as any tech company that is involved with the restaurant biz. We are okay with the fee that Caviar charges because we don’t see it as a loss as much as we see it as gaining business that would otherwise go elsewhere. Customers now have an alternative to ordering from large chain–like restaurants and can support small, local businesses making quality fresh food.”

For their part, restaurants hand pick which menu items they’ll offer on Caviar, since chefs want only dishes that travel well to go out the door. The arrangement is a plus for busy restaurant businesses that don’t have the bandwidth or financial resources to run their own delivery service.

Caviar works via a simple premise: Customers place orders at their restaurant of choice for delivery within the hour or scheduled up to a week in advance. Once the order is received, a smartphone app notifies the restaurant and a Caviar driver. There’s even GPS tracking so diners know the exact location of their dinner, which arrives in a heated thermal bag.

The cost for this convenience? Customers pay a $9.99 flat delivery fee for orders and an additional automatic 18{94d79dd6af1e87a94e700e4c297236468333f22e27ed5757b44711974a9a4b91} gratuity; both of these fees go directly to the courier. Some grumbling about that gratuity has shown up in this writer’s Facebook feed, but CEO Jason Wang justifies it as a typical across-the-board tip and says that in beta testing, customers didn’t like having to figure out the tip themselves. How does Caviar make money? It takes a 20–30{94d79dd6af1e87a94e700e4c297236468333f22e27ed5757b44711974a9a4b91} cut of sales.

Caviar’s website sports professional photos of dishes available to customers in the Oakland/Berkeley/Emeryville delivery area. Wang says that more than half their business comes from companies catering for their employees. In the East Bay, most Berkeley orders come from the student set, while Oakland customers tend to be a workplace crowd. Emeryville is typically home delivery. “Our office loves the range of vendors; it spices things up in the eating rotation,” says Christine Byon, executive assistant at Location Labs in Emeryville. “Caviar is flexible and super hands-on, so it really makes my job easier to get a tasty lunch here on time. Their service is hard to beat.”

This writer has heard mixed things about Caviar wait times, so she decided to put the service to a test, ordering a Sliver pizza on a Friday night at prime dinner time—during the World Series no less. We were quoted a wait time of 40–60 minutes: The Caviar courier arrived in 44 minutes. For the convenience we paid a gratuity, though not the $9.99 flat fee, which is waived for first-time users. The extra 10 bucks would have made ordering that pie prohibitively expensive on our end. Plus, given where we live, we could have walked to the pizzeria and back in the time it took for the order to get here.

Some point out that this is simply another service for the privileged. But Wang notes that Caviar isn’t just delivering food from expensive, white-tablecloth restaurants. “Our criteria is simple,” he says. “We partner with popular places that people want to eat at where the quality of food is good, regardless of price.” Case in point: They deliver from Shan Dong, an Oakland Chinatown favorite, where dishes cost less than $10 each. Similarly Ike’s sandwiches are in the $9–12 range. Given the fees, though, this premium service may not be a go-to source for pizza or sandwich delivery for the masses—or those dining solo. As its name implies, the service is something of a luxury.

Caviar raised about $15 million in initial investment funding, including $13 million last April from VC types such as Tiger Global, Paul Buchheit, Andreessen Horowitz, and Mixt Greens, a restaurant partner. In August, online payment company Square bought the company for reportedly $90 million in stock. Wang declines to discuss the deal. But clearly, business is good. Caviar has expanded beyond the Bay into new markets, including Los Angeles, Seattle, Chicago, Philadelphia, Washington, D.C., Boston, and New York City.

As with the SpoonRocket founders, Caviar co-founders Richard Din, Shawn Tsao, and Andy Zhang bonded in the same Cal frat house over food. Wang, who grew up in El Cerrito, said he was raised on a diet of lackluster Chinese home cooking. Once he started exploring restaurants in the Bay Area, he became hooked on the search for the next great taste. His hobby, he says, has become his profession.

“Most good restaurants don’t deliver,” says Wang, who lives in Oakland. “This is such a compelling area to have our service. It’s a great community with an amazing abundance of wonderful restaurants. And it’s an area that’s open to tech innovation in the food sector. It’s the perfect home base for a business like Caviar.”

 

Every Wednesday at Malcolm X Elementary in Berkeley, parent Rebecca Matthews helps distribute produce, meat, and dairy items purchased through Farmigo.com.

Every Wednesday at Malcolm X Elementary in Berkeley, parent Rebecca Matthews helps distribute produce, meat, and dairy items purchased through Farmigo.com.

Farmigo Customers Pick Up Fresh Food When They Collect Kids

Every Wednesday right at 1:30 dismissal, Rebecca Matthews stands ready with grocery bags piled with leafy greens and crunchy apples at her child’s school, Malcolm X Elementary in Berkeley. As a host for the online food service Farmigo, Matthews, a PTA volunteer, camps out at picnic tables greeting passing parents with produce-laden bags and meat and dairy items from a cooler, all purchased through Farmigo.

It’s probably not surprising that a digital food startup with roots in the community-supported-agriculture world would create a delivery service that features a community pickup location.

“We’re going after the people who aspire to go to the farmers’ market every week but just can’t make it. It’s a virtualized cooperative,” says Farmigo CEO and founder, Brooklyn-based Benzi Ronen, on a recent visit to the Bay Area. Matthews confirms Ronen’s comments: Her own Farmigo order has replaced her increasingly infrequent visits to Berkeley’s Tuesday farmers’ market.

Farmigo allows online shoppers to order organic produce and locally made food products from multiple sources that are then packed up and delivered. The model is like a local buyers club: It takes at least 10 participants who commit to a central pickup location. Each host gets a 10{94d79dd6af1e87a94e700e4c297236468333f22e27ed5757b44711974a9a4b91} rebate on orders; it’s proven a popular school fundraiser. Matthews, who also earns a 30{94d79dd6af1e87a94e700e4c297236468333f22e27ed5757b44711974a9a4b91} discount for her hosting efforts, earned $2,700 last year that she turned over to the school’s PTA. She’s on track to pass on significantly more this year, she says. Farmigo pays 65{94d79dd6af1e87a94e700e4c297236468333f22e27ed5757b44711974a9a4b91} of sales to the farmer and 25{94d79dd6af1e87a94e700e4c297236468333f22e27ed5757b44711974a9a4b91} goes to the company.

About 75 families at the school have signed up for the service. Around 25 or so use it on a regular basis; orders range from $20 to $70. Matthews is a fan in particular of the meat that she can purchase through Farmigo and the flexibility the service allows.

Ronen says the program, currently running in the Bay Area and New York City, appeals to families outside of densely populated areas, so it does better in Brooklyn and Berkeley than in Manhattan or San Francisco. There are more than a dozen pick-up locations in the East Bay including at businesses, private residences, and schools.

Ronen calls what he’s doing economies of communities. “I love the fact that the Internet collapses chains so that you can connect the consumer with the source, in this case the farmer,” he says. “And I love that the Internet can create communities in ways that we’ve forgotten how. When we shop in supermarkets, we go on our own and have a very alienated experience.”

Farmigo is a kind of hybrid in the digital grocery-shopping arena: It’s cutting costs by eliminating door-to-door delivery. Instead, it asks consumers to buy in and pick up some of the delivery and distribution costs by convening at a central location.

Ronen is one digital food entrepreneur who predicts a vastly different shopping landscape—and soon. “Our food system is changing, there’s no denying that,” he says. “I think that within a decade we won’t have supermarkets as we see them today. Our nonperishables will come via online through the likes of Amazon and our fresh food will come through web services like Farmigo.”

farmigo.com