Eat Delish - Blog Post 2

Here is what we believed at the beginning of the week…

Eat Delish has roughly 100 early adopters who are currently using our weekday dinner subscription service at least 2 times every week. New customer acquisition has been particularly challenging given the limited resources for marketing or to run a formal campaign. Based on our discussion with Jeff Goodman during past class weekend, there are two ways of going about this problem.

Option-1 - Create more value for early adopters (A2->M1): Early adopters of Eat Delish especially working families with kids have been asking us to provide kids lunch boxes in their Eat Delish dinner bags as they don’t have a good consistent solution for lunches at school. Anecdotally mornings are even busier than the evenings. Parents need to get their kids ready, make breakfast and then also prepare their kid’s lunch boxes. If we can provide a solution to this problem apart from taking care of the dinners on weekdays, we can establish better stickiness with these customers. Eat Delish can be the complete week-day meal solution for these families. The value created by Eat Delish will be higher which will encourage an incremental number of early adopters to refer us among their social circles which will help us unlock the customer acquisition challenge.

Option-2 - Expand same service to new markets (A1->M2): Apart from schools and corporate offices there are new markets, for example, Caltrain stations and large apartment complexes that we could also consider serving. This option is not feasible and doesn’t fit well in our hub delivery model.There are a number of large apartment complexes in the bay area where families live with their kids. These are dual working high income families that have similar challenges when it comes to weekday dinners. We are not sure if delivering food at apartment’s leasing office will work or not. If the demand is high we can consider having a dedicated delivery van for that complex. This will require a dedicated delivery person at a given complex or caltrain station which has currently been cost prohibitive for us. This option can surely be considered in the future.

Here is what we did…

We ran an online survey for our early adopters whose kids go to schools that do not provide lunches. The goal of this survey was to to understand how strong the need was for us to serve kids lunch kits along with the Eat Delish dinner bags. We wanted to understand 4 things as part of this survey.

1. Is there a real need for kid’s lunch kits among our existing customers?
2. If we provide a service that met their needs, will they be willing to use it as an add-on to their current subscription
3. Will the parents help us design these lunch kits?
4. How much will they be willing to pay for such a kit?

We did a follow-up in-person discussions with a selected set of parents to understand and learn more about the specifics and feasibility of these lunch kits.

Here is what we learned...

This survey struck a chord with our existing customers. Although the survey is still active, in one week we received 30 responses. Roughly 70% of these respondents acknowledged that they need help for planning and preparing their kid’s lunch boxes. 60% of these parents said that they would definitely buy this add-on and 30% said they might subscribe to it in the future.

We received personal emails from the parents on how much will they need something like this. Most schools do not provide lunch and the ones that do, have tie-ups with some 3rd parties like Choice Lunch that are not organic and appealing to kids and the parents. Parents still want to pack the lunch box in the morning but do not have time to prepare a healthy lunch consistently. Based on the survey responses and the personal meet-ups, here are some suggestions on what these lunch kits could contain.

• Cauliflower Mac & Cheese, Grilled Chicken / Tofu & Snap Peas
• Chicken Salad / Cucumber Salad Sandwich, Veggie Sticks & Carrots
• Chicken/Veg Noodle Soup, Garlic Cheese Bread & Steamed Veggies
• Brown Rice with Veggies & Egg, Yogurt dip, Fruit
• Chicken Shawarma/Paneer, Hummus with Quinoa Chips, Carrots & Peppers

As a result, this is what we are doing...

After speaking to class mentors and speaking to our customers we think that increasing our current customer value is the right next step. Here are the key reasons why we made this decision,

• Creates more value for the existing customers and further differentiates Eat Delish from some of the existing competing businesses  like Munchery, Sprig etc.
• Increases revenue - get more from each customer (increase our top line)
• Improves margins - use existing kitchen & staff more efficiently (helps with unit economics)
• Increases retention and stickiness (make early adopters our champions and advocates)

Here are the next steps...

• Design recipes for 4 lunch box kits
• Perform a trial run with the existing customers, ideally before the next school year starts
• Plan a referral campaign around lunch-kits

We learned 3 key lessons this week based on our in-person customer interviews & survey results. 

Here is what we believed at the beginning of the week...

1) At the beginning of the week we believe that most of our potential customers spent 30 minutes or less per weekday on dinner preparation. We also believed that most of our potential customers would prefer a ready-to-eat family style dinner vs. a meal preparation kit.

2) Secondly, we also believed that busy working class families with kids who want to eat healthy dinners on a consistent basis will subscribe for an organic, freshly prepared, ready-to-eat meal at least two times a week if it was offered at a right price point.

3) Lastly, we believed that the customer’s buying decision doesn't change much if they pick up dinner from the school office or from the office reception on their way back home vs. getting it delivered at their home.

Here is what we did...

We believed that feedback about what a potential customer would want best would be most accurately captured if we spoke with them (customers that fit the target customer profile) directly. So we went down to Happy Days Pre-school in Cupertino and spoke with a 10 mothers on their current weekday dinner habits and what their preferences might be for a weekday dinner service.

In addition we sent out a survey via email to a select group of mothers and other family members to better understand current patterns as well as expectations for a weekday dinner service.

Here is what we learned.

When we reviewed both our survey results reflecting on what the mothers we had met at Happy Days had told us, those findings were in alignment for the most part, the core consistency in the message was a key part of why we felt this exercise was particularly useful in developing our idea even further. More specifically, we learnt the following:

1) From our survey results, 21% of the dual earning families with annual incomes of >200k don't even cook during weekdays. Of the families that do cook, roughly 25% spend less than 30 minutes per day cooking, with 57% cooking their dinner within 30-60 minutes in total.

From our interviews:

Parents want to give fresh food, and they often do some basic preparation over the weekend for the weekday dinners. Priya (mother of 2 two and five year olds) for example, mentioned that even though she prefers to cook on weekdays sometimes she has to rely on take outs or the meal she had prepared over the weekend. She voiced a concern around the freshness of the food, but hadn't really spent much time thinking about what potential alternatives could help with her weekday meal preparation. 

2) Again from our survey results we clearly identify that 45% of them shop at organic stores vs. regular grocery stores and they visit the organic store around 3 times per month. In addition they 35% spend more than $100 per week and 15% spend more than $150 for their weekly organic shopping. Lastly, we also noted, that nearly 20% of respondents spent more than $100 on take-outs for the week, however, we were not able to identify which of those who spent on take outs did not visit grocery stores at all (meaning they ate out most of the time).

Speaking with Shilpa (mother of 2 kids, aged 5 and 6), she mentioned that when groceries are done, sometimes they are already past their best or spoilt before she has the chance to cook them for the week. Additionally, sometimes she lacked of some ingriedients to cook a complete mean or a healthy recipe to put the meal together and had to pass on cooking a meal. The reality of waste seemed to be very relevant amongst almost all the mothers that wanted to provide consistently healthy meals for their family and the cycle of guilt in eating out was another major theme that was repeated multiple times from various different sources.

3) When it came to quantifying the option of food being delivered to schools vs. delivery to the home what most of the mothers we spoke to said was that they didn't consider picking their meal up from school to be a significant deterrant to the service. The reasons they cited were that they had to come to school regardless to pick their children. In some cases they preferred picking the meal up at school because, they found it to be a safer option. Existing services did offer specific delivery times to the home but they were often inconsistent.

As a result, this is what we are doing.

1) The learning validates our hypotheses that there is a need for a service like the one we propose, and the learning were consistent in both the survey data as well as the in-person discussions. Our key assumption was validated that dual income families do not even have 30 minutes to spend on dinner during weekdays on a consistent basis.

2) A relatively high percentage (45%) of Bay Area families shop at organic grocery stores, validate demand for organic food but cite concerns related to wastage through expiry. Those that do spend on organic food, spend about $150 dollars per week and gives some insight into what our aggregate pricing for the meal should be in order to convert organic grocery shoppers to happy Eat Delish subscribers.

3) Given our target customer base are families that tend to live in suburban areas, we see the opportunity to realize better unit economics through a hub delivery model where a minimum customer threshold is maintained, like schools and corporate locations.

List of mothers interviewed at Happy Days Pre-school

Amy Orilall - 32
Priya Vartak - 35
Shilpa Bhave - 26
Susan Sabharwal - 30
Medha Bhutani - 36
Rashmi Nair - 30
Payal Singh - 33
Anureita Rao - 37
Heather Scouffas - 38
Andrea Duvall - 34

Key Survey Data Set