Thrive Market Gets Into Perishables And Wants To Improve The Way Farmers And Fisherman Do Business

A new frozen meat and seafood offering sourced from small and mid-size farmers and fisherman across the globe who echo Thrive's commitment to the environment, sustainable farming practices, regenerative farming that restores healthy soil and ocean waters and animal welfare.

April 3, 2018

Originally published on Forbes.com.

Meat is big business. According to the Food Marketing Institute, a Washington DC based trade association of food retailers and wholesalers, the meat/fish/poultry department of a supermarket is the number two in sales after dry grocery foods, representing 13.77 percent of the total sales of the store. Which is why it seems logical that Thrive Market, one of the fastest growing food e-commerce platforms, announced as of today, they will start selling meat, poultry and fish; with a twist – lower prices, more money for the farmers and fisherman and will support more sustainable agriculture practices.

Thrive Market launched its online grocery store in November 2014 and ships throughout the US. Now a darling of food based start ups, Thrive was initially rejected by the top Venture Capital firms and relied on raising its initial round of capital from bloggers and influencers including Tony Robbins, Deepak Chopra and Jillian Michaels. As the business proved itself, investors including Gary Hirshberg, founder of Stonyfield Farm yogurt and Seth Goldman the founder of Honest Tea joined with the likes of Will Smith, John Legend, Justin Timberlake and Sofia Vergara to help fund the start up. Thrive Market is built on a membership platform ($60 per year) and has positioned itself as making natural, organic and non-GMO products “affordable” for all, and currently has over 400,000 customers across the US. They promote that their prices are 25 to 50% off retail and there is no charge for delivery on orders over $49; which is not a barrier as most of their orders from members average about $75 according to the company.

Until today, Thrive Market’s offerings included over 6,500 non-perishable products: snacks, sauces, nuts, supplements, baby and beauty products, pet foods including their own Thrive brand on 200+ food products, as well others offerings across categories, which now represent 18% of their sales. Just about everything you would want from the center-store grocery aisles in a traditional supermarket.

While the trend seems to be that many consumers are trying to reduce their intake of red meat, Thrive Market’s founders observed through their orders and customer requests, that Thrive’s customers are heavily Paleo and Keto diet oriented; they were missing a huge opportunity to supply products that would fit their customers’ lifestyles. But getting into frozen meat and seafood is an expensive proposition that required them to build three distribution centers across the US, and unlike most of their products that have a long shelf life, this new line although frozen, does create new supply chain challenges.

To start, Thrive Market is offering eleven bundles that may be a challenge for the average consumer to embrace that is used to buying their meat and seafood individual. Each bundle is sold in a variety pack ranging from $89.99 to $119.99 including The Wild and Sustainable Seafood Box, which contains over 6 pounds of seafood, enough for 17 servings and includes shrimp, sea scallops, barramundi, cod and sockeye salmon. Which would over double the value of the average order. Others bundles mix seafood and meat, like the over 8 pound Ultimate Sampler: Pork, Beef, Chicken & Seafood Box which contains chicken breasts, ground beef, steaks, sockeye salmon and pork chops. There are also bundles of just seafood, beef, pork or chicken for the less adventurous palate. Each bundle comes in eco-friendly and minimalist packaging. I tasted sea scallops, chicken breast and two different cuts of beef and found them all well above the quality that I would find in the traditional supermarket meat case.

 

I spoke with Gunnar Lovelace, founder and chief strategy officer at Thrive Market and Mike Hacaga (formerly with Whole Foods) who is heading up their meat & seafood program. Thrive’s approach is to partner with small and mid-size farmers and fisherman across the globe who echo their commitment to the environment, sustainable farming practices, regenerative farming that restores healthy soil and ocean waters and animal welfare.

Hacaga told me that they look for three things in a farming partner. The first is someone that can scale with them. Second, someone that’s aligned with their mission statement and values (to make high-quality, healthy foods affordable and accessible to every family in America) and last, someone who’s putting the farm and animals in front of profits. He tells me that Thrive has reached a tipping point where producers are starting to come to them and want to be part of the Thrive experience. He no longer has to “ knock on old doors, and they are able to work with people that believe in what Thrive is doing and have boots on the ground”.

Lovelace said that by design they have aligned with very few partners. They have been trying to build the program with single source to the best of our abilities by partnering with small co-ops and family farmers that feed into the program. Thrive’s free-range organic chicken is pasture raised and is from a co-op of 40 family farms within 50 miles of the processing plant. Beef source is coming out of Patagonia Chile, with a small group of multi-generation family ranchers.

He told me that in addition to saving consumers money and offering higher quality sustainable products, he want to be sure that they are returning more money to the farmers. One example they shared is their partnership with White Oaks. White Oaks produces all of the pork for them on a Level 5 gap program that Whole Foods walked away from. Due to the high level of animal welfare, Thrive was able to partner and can offer a higher premium product and higher quality product. White Oaks is getting a 15-20% premium over what they would get from another retailer. Thrive, he said, is able to finance that because of the efficiency of their supply chain selling direct to the consumer.

In addition to paying the farmers and fisherman more money for their foods, another part of the initiative is to bring an investment capital to the farmers to help support scaling. Because of the success of Thrive, Lovelace says, they have been able to attract investments to these farmers and co-ops. “We’ve helped identify and organize interest from over $300M in investment capital from investors interested in supporting regenerative and grass-fed meat. Thrive helps de-risk investment as well and can help drive predictable demand”.

Lovelace desire to get into the meat business has been long coming. He shared with me that he has fond memories of sharing a meal of burgers, when he grew up with his mom, in Ojai, California and after soccer practice, and in his words "it was a special moment between them". To this day what bugs him was that those burgers that he ate in his teen years were clearly made from factory-farmed meats, and now he is in the position to change that experience for other moms and their sons.

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