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THE GROCERY CLUB Economics and Design | Barnes Godrej Massing Rice Smith | Spring 2012
THE GROCERY CLUB Economics and Design | Barnes Godrej Massing Rice Smith | Spring 2012

THE GROCERY CLUB

Economics and Design |

Barnes Godrej Massing Rice Smith | Spring 2012

Shifts in Consumer Preferences

Shifts in Consumer Preferences From Fast Food to Good Food We can start to see a

From Fast Food to Good Food

We can start to see a shift in consumer preference from fast and cheap food to wholesome, quality whole foods. Customers are looking for more ways to incorporate healthy living, including cooking and preparing meals at home.

The Problem

The Problem Cooking and Preparing Meals at Home is Difficult Takes time Requires Requires Involves planning

Cooking and Preparing Meals at Home is Difficult

The Problem Cooking and Preparing Meals at Home is Difficult Takes time Requires Requires Involves planning
The Problem Cooking and Preparing Meals at Home is Difficult Takes time Requires Requires Involves planning
The Problem Cooking and Preparing Meals at Home is Difficult Takes time Requires Requires Involves planning
The Problem Cooking and Preparing Meals at Home is Difficult Takes time Requires Requires Involves planning

Takes time

Requires

Requires

Involves

planning

knowledge and skill

multiple steps, including clean up

Value Proposition

Value Proposition For grocery customers who are dissatisfied with the inconvenience of shopping, scheduling, and preparing

For grocery customers who are dissatisfied with the inconvenience of shopping, scheduling, and preparing of meals

our

solution is a weekly subscription based online

meal planning service that delivers pre-measured, ready-to-cook meal ingredients right to their door.

Unlike current grocery order services, our service lets customers focus on cooking and feasting, not on the planning and ingredient preparation.

The Offering

The Offering Main Components Subscription based pricing of groceries Online meal planning Delivery of raw ingredients

Main Components

Subscription based pricing of groceries

Online meal planning

Delivery of raw ingredients

Post shopping support

How it Works

How it Works 1.) Establish your subscription service Number of people in household Number of meals

1.) Establish your subscription service

Number of people in household

your subscription service Number of people in household Number of meals desired per week 12 Preferences

Number of meals desired per week

12

Preferences

Preferred meals Dietary Restrictions Dietary Goals Likes/Dislikes Delivery Date

How it Works

How it Works 1.) Establish your subscription service 12 $ meals per week 1 2 3

1.) Establish your subscription service

12 $ meals per week
12
$
meals per week
1 2 3 4+ 78 156 234 312
1
2
3
4+
78
156
234
312

How it Works

How it Works 2.) Plan your meals for the week Grocery Club sends you an email

2.) Plan your meals for the week

How it Works 2.) Plan your meals for the week Grocery Club sends you an email

Grocery Club sends you an email 3 days prior to your delivery

Club sends you an email 3 days prior to your delivery Suggested Meals and Meal Plan

Suggested Meals and Meal Plan for Week

Make edits to meals, ingredients, prep choices

Add additional groceries and dry goods outside of subscription

How it Works

How it Works 3.) Review, check out, and print Print Meal Plan for the Week Order

3.) Review, check out, and print

How it Works 3.) Review, check out, and print Print Meal Plan for the Week Order

Print Meal Plan for the Week

Review, check out, and print Print Meal Plan for the Week Order locked in at noon

Order locked in at noon day prior

How it Works

How it Works 4.) Groceries are hand-selected & picked first 10 | The Grocery Club |

4.) Groceries are hand-selected & picked first

How it Works

How it Works 5.) Groceries are delivered to TGC Member 11 | The Grocery Club |

5.) Groceries are delivered to TGC Member

How it Works

How it Works 6.) TGC Member is ready to prepare a meal Ingredients prepped, sorted, and

6.) TGC Member is ready to prepare a meal

How it Works 6.) TGC Member is ready to prepare a meal Ingredients prepped, sorted, and

Ingredients prepped, sorted, and labeled by meal and day

Ingredients prepped, sorted, and labeled by meal and day Grocery Club Chef Apprentice App with cooking

Grocery Club Chef Apprentice App with cooking demos and tutorials

How it Works

How it Works 7.) Clean up is a breeze Recyclable containers Less prep equals less clean-up

7.) Clean up is a breeze

How it Works 7.) Clean up is a breeze Recyclable containers Less prep equals less clean-up

Recyclable containers

How it Works 7.) Clean up is a breeze Recyclable containers Less prep equals less clean-up

Less prep equals less clean-up

How it Works

How it Works 8.) Premium services create additional value Monthly visit from personal chef or nutritionist

8.) Premium services create additional value

How it Works 8.) Premium services create additional value Monthly visit from personal chef or nutritionist

Monthly visit from personal chef or nutritionist

value Monthly visit from personal chef or nutritionist Additional revenue from add on-services and groceries 14

Additional revenue from add on-services and groceries

Business Model Canvas

Business Model Canvas The Grocery Club PARTNERS Food Wholesalers and Distributors Other cooking related partners

The Grocery Club

PARTNERS Food Wholesalers and Distributors

Other cooking related partners (chefs, cookbook publishers, etc)

Content creation vendors for web platform (cloud- based)

Content provider for a Recipe Catalog

KEY RESOURCES Delivery & Logistics Ingredient Preparation

Grocery Services

Scheduling and Planning Web-based Software

KEY ACTIVITES Delivery & Logistics

Delivery Drivers

Food Preparation

Web-based application related activities

COSTS Labor for food preparation and delivery

Rent for Preparation space

Fleet Leasing for Delivery

Media Content development costs

Software development and IT support

VALUE PROPOSITION

Grocery delivery service

Automatic weekly replenishment of groceries based on subscription service

Portion control, dietary restrictions and food substitutions for more healthful meals

Weekly meal scheduling

Track family preferences for meals over time

Hand-selected produce for Grocery Club Members and produce satisfaction guarantee

CUSTOMER

RELATIONSHIPS

Self-service via online portal

Personal service via home delivery and fresh check guarantee

CHANNELS

Online portal

Third party partner site referrals

Delivery/distribution

system

CUSTOMER SEGMENTS

Grocery shopping

customers who

care about eating healthy

want to minimize the amount of time spent preparing a meal

often eat out

don’t have the skills and knowledge required to prepare healthy meals at home

REVENUE STREAMS

Subscription Fees

Additional Grocery Sales

Advertising

Delivery Fees

Partner revenue for associated services

Relationships between Variables

Relationships between Variables The online portal supports GC customer experience PARTNERS Food Wholesalers and KEY

The online portal supports GC customer experience

PARTNERS Food Wholesalers and KEY RESOURCES Delivery & Logistics Provides content for Distributors Ingredient
PARTNERS
Food Wholesalers and
KEY RESOURCES
Delivery & Logistics
Provides content for
Distributors
Ingredient Preparation
Other cooking related
partners (chefs, cookbook
publishers, etc)
Grocery Services
Content creation
vendors for web
platform (cloud-
based)
Scheduling and
Planning Web-
based Software
KEY ACTIVITES
Delivery & Logistics
Content provider
for a Recipe
Catalog
Delivery Drivers
Food Preparation
Web-based application
related activities

COSTS Labor for food preparation and delivery

Rent for Preparation space

Fleet Leasing for Delivery

Media Content development costs

Software development and IT support

VALUE PROPOSITION

Grocery delivery service

Automatic weekly replenishment of groceries based on subscription service

Portion control, dietary restrictions and food substitutions for more healthful meals

Weekly meal scheduling

Track family preferences for meals over time

Hand-selected produce for Grocery Club Members and produce satisfaction guarantee

CUSTOMER

RELATIONSHIPS

Self-service via online portal

Personal service via home delivery and fresh check guarantee

CHANNELS

Online portal

Third party partner site referrals

Delivery/distribution

system

CUSTOMER SEGMENTS

Grocery shopping

customers who

care about eating healthy

want to minimize the amount of time spent preparing a meal

often eat out

don’t have the skills and knowledge required to prepare healthy meals at home

REVENUE STREAMS

Subscription Fees

Additional Grocery Sales

Advertising

Delivery Fees

Partner revenue for associated services

Relationships between Variables

Relationships between Variables The online portal supports GC customer experience PARTNERS Food Wholesalers and

The online portal supports GC customer experience

PARTNERS Food Wholesalers and Distributors

Other cooking related partners (chefs, cookbook publishers, etc)

Content creation vendors for web platform (cloud- based)

Content provider for a Recipe Catalog

KEY RESOURCES VALUE PROPOSITION Delivery & Logistics Which supports Grocery delivery service Ingredient
KEY RESOURCES
VALUE PROPOSITION
Delivery & Logistics
Which supports
Grocery delivery service
Ingredient Preparation
Grocery Services
Scheduling and
Planning Web-
based Software
Automatic weekly
replenishment of
groceries based on
subscription service
Portion control, dietary
restrictions and food
substitutions for more
healthful meals
KEY ACTIVITES
Delivery & Logistics
Weekly meal
scheduling
Delivery Drivers
Food Preparation
Web-based application
related activities
Track family
preferences for
meals over time
Hand-selected produce
for Grocery Club
Members and produce
satisfaction guarantee

COSTS Labor for food preparation and delivery

Rent for Preparation space

Fleet Leasing for Delivery

Media Content development costs

Software development and IT support

CUSTOMER

RELATIONSHIPS

Self-service via online portal

Personal service via home delivery and fresh check guarantee

CHANNELS

Online portal

Third party partner site referrals

Delivery/distribution

system

CUSTOMER SEGMENTS

Grocery shopping

customers who

care about eating healthy

want to minimize the amount of time spent preparing a meal

often eat out

don’t have the skills and knowledge required to prepare healthy meals at home

REVENUE STREAMS

Subscription Fees

Additional Grocery Sales

Advertising

Delivery Fees

Partner revenue for associated services

Relationships between Variables

Relationships between Variables The online portal supports GC customer experience PARTNERS Food Wholesalers and

The online portal supports GC customer experience

PARTNERS Food Wholesalers and Distributors

Other cooking related partners (chefs, cookbook publishers, etc)

Content creation vendors for web platform (cloud- based)

Content provider for a Recipe Catalog

KEY RESOURCES Delivery & Logistics Ingredient Preparation

Grocery Services

Scheduling and Planning Web-based Software

KEY ACTIVITES Delivery & Logistics

Delivery Drivers

Food Preparation

Web-based application related activities

COSTS Labor for food preparation and delivery

Rent for Preparation space

Fleet Leasing for Delivery

Media Content development costs

Software development and IT support

VALUE PROPOSITION CUSTOMER RELATIONSHIPS Grocery delivery service Automatic weekly replenishment of groceries based
VALUE PROPOSITION
CUSTOMER
RELATIONSHIPS
Grocery delivery service
Automatic weekly
replenishment of
groceries based on
subscription service
Self-service via online
portal
Personal service via
home delivery and fresh
check guarantee
Portion control, dietary
which customers interact through
restrictions and food
substitutions for more
healthful meals
CHANNELS
Weekly meal
scheduling
Online portal
Track family
preferences for
meals over time
Third party partner site
referrals
Delivery/distribution
system
Hand-selected produce
for Grocery Club
Members and produce
satisfaction guarantee
REVENUE STREAMS
Subscription Fees
Additional Grocery Sales
Advertising
Delivery Fees

CUSTOMER SEGMENTS

Grocery shopping

customers who

care about eating healthy

want to minimize the amount of time spent preparing a meal

often eat out

don’t have the skills and knowledge required to prepare healthy meals at home

Partner revenue for associated services

Relationships between Variables

Relationships between Variables The online portal supports GC customer experience PARTNERS Food Wholesalers and

The online portal supports GC customer experience

PARTNERS Food Wholesalers and Distributors

Other cooking related partners (chefs, cookbook publishers, etc)

Content creation vendors for web platform (cloud- based)

Content provider for a Recipe Catalog

KEY RESOURCES Delivery & Logistics Ingredient Preparation

Grocery Services

Scheduling and Planning Web-based Software

KEY ACTIVITES Delivery & Logistics

Delivery Drivers

Food Preparation

Web-based application related activities

COSTS Labor for food preparation and delivery

Rent for Preparation space

Fleet Leasing for Delivery

Media Content development costs

Software development and IT support

VALUE PROPOSITION

Grocery delivery service

Automatic weekly replenishment of groceries based on subscription service

Portion control, dietary restrictions and food substitutions for more healthful meals

Weekly meal scheduling

Track family preferences for meals over time

Hand-selected produce for Grocery Club Members and produce satisfaction guarantee

CUSTOMER CUSTOMER SEGMENTS RELATIONSHIPS Grocery shopping Self-service via online portal customers who Personal
CUSTOMER
CUSTOMER SEGMENTS
RELATIONSHIPS
Grocery shopping
Self-service via online
portal
customers who
Personal service via
home delivery and fresh
check guarantee
care about eating
healthy
want to minimize the
amount of time spent
preparing a meal
which is supported through
often eat out
CHANNELS
Online portal
don’t have the skills and
knowledge required to
prepare healthy meals at
home
Third party partner site
referrals
Delivery/distribution
system
REVENUE STREAMS
Subscription Fees
Additional Grocery Sales
Advertising
Delivery Fees

Relationships between Variables

Relationships between Variables The online portal supports GC customer experience PARTNERS Food Wholesalers and

The online portal supports GC customer experience

PARTNERS Food Wholesalers and Distributors

Other cooking related partners (chefs, cookbook publishers, etc)

Content creation vendors for web platform (cloud- based)

Content provider for a Recipe Catalog

KEY RESOURCES Delivery & Logistics Ingredient Preparation

Grocery Services

Scheduling and Planning Web-based Software

KEY ACTIVITES Delivery & Logistics

Delivery Drivers

Food Preparation

Web-based application related activities

VALUE PROPOSITION

Grocery delivery service

Automatic weekly replenishment of groceries based on subscription service

Portion control, dietary restrictions and food substitutions for more healthful meals

Weekly meal scheduling

Track family preferences for meals over time

Hand-selected produce for Grocery Club Members and produce satisfaction guarantee

pays for

CUSTOMER

RELATIONSHIPS

Self-service via online portal

Personal service via home delivery and fresh check guarantee

CHANNELS

Online portal

Third party partner site referrals

Delivery/distribution

system

CUSTOMER SEGMENTS

Grocery shopping

customers who

care about eating healthy

want to minimize the amount of time spent preparing a meal

often eat out

don’t have the skills and knowledge required to prepare healthy meals at home

COSTS Labor for food preparation and delivery Rent for Preparation space Fleet Leasing for Delivery

Media Content development costs Software development and IT support

REVENUE STREAMS

Subscription Fees

Additional Grocery Sales

Advertising

Delivery Fees

Subscription Fees Additional Grocery Sales Advertising Delivery Fees 20 | The Grocery Club | May 3

Relationships between Variables

Relationships between Variables The online portal supports GC customer experience PARTNERS Food Wholesalers and

The online portal supports GC customer experience

PARTNERS Food Wholesalers and Distributors

Other cooking related partners (chefs, cookbook publishers, etc)

Content creation vendors for web platform (cloud- based)

Content provider for a Recipe Catalog

KEY RESOURCES Delivery & Logistics Ingredient Preparation

Grocery Services

Scheduling and Planning Web-based Software

KEY ACTIVITES Delivery & Logistics

Delivery Drivers

Food Preparation

Web-based application related activities

COSTS Labor for food preparation and delivery Rent for Preparation space Fleet Leasing for Delivery Media Content development costs Software development and IT support

VALUE PROPOSITION

Grocery delivery service

Automatic weekly replenishment of groceries based on subscription service

Portion control, dietary restrictions and food substitutions for more healthful meals

Weekly meal scheduling

Track family preferences for meals over time

Hand-selected produce for Grocery Club Members and produce satisfaction guarantee

CUSTOMER

RELATIONSHIPS

Self-service via online portal

Personal service via home delivery drives and check guarantee

fresh

CUSTOMER SEGMENTS

Grocery shopping

customers who

care about eating healthy

want to minimize the amount of time spent preparing a meal

often eat out

don’t have the skills and knowledge required to prepare healthy meals at home

and knowledge required to prepare healthy meals at home CHANNELS Online portal Third party partner site

CHANNELS

Online portal

Third party partner site referrals

Delivery/distribution

system

REVENUE STREAMS

Subscription Fees Additional Grocery Sales Advertising Delivery Fees Partner revenue for associated services

Relationships between Variables

Relationships between Variables The online portal supports GC customer experience & PARTNERS KEY RESOURCES Food

The online portal supports GC customer experience

& PARTNERS KEY RESOURCES Food Wholesalers and Distributors Delivery & Logistics Other cooking related
&
PARTNERS
KEY RESOURCES
Food Wholesalers
and Distributors
Delivery &
Logistics
Other cooking related
partners (chefs, cookbook
publishers, etc)
Ingredient
delivers
Preparation
Grocery Services
Content creation vendors
for web platform (cloud-
based)
Content provider for a
Recipe Catalog
KEY ACTIVITES
Delivery & Logistics
Delivery Drivers
Food Preparation
Web-based application
related activities

COSTS Labor for food preparation and delivery Rent for Preparation space Fleet Leasing for Delivery Media Content development costs Software development and IT support

VALUE PROPOSITION

Grocery delivery service

Automatic weekly replenishment of groceries based on subscription service

Portion control, dietary restrictions and food substitutions for more healthful meals

Weekly meal scheduling

Track family preferences for meals over time

Hand-selected produce for Grocery Club Members and produce satisfaction guarantee

CUSTOMER

RELATIONSHIPS

Self-service via online portal

Personal service via home delivery and fresh check guarantee

CHANNELS

Online portal

Third party partner site referrals

Delivery/distribution

system

CUSTOMER SEGMENTS

Grocery shopping

customers who

care about eating healthy

want to minimize the amount of time spent preparing a meal

often eat out

don’t have the skills and knowledge required to prepare healthy meals at home

REVENUE STREAMS

Subscription Fees Additional Grocery Sales Advertising Delivery Fees Partner revenue for associated services

Relationships between Variables

Relationships between Variables The online portal supports GC customer experience PARTNERS Food Wholesalers and

The online portal supports GC customer experience

PARTNERS Food Wholesalers and Distributors

Other cooking related partners (chefs, cookbook publishers, etc)

Content creation vendors for web platform (cloud- based)

Content provider for a Recipe Catalog

KEY RESOURCES Delivery & Logistics

Ingredient Preparation

Grocery Services

Scheduling and Planning Web-based Software

KEY ACTIVITES Delivery & Logistics

Delivery Drivers

Food Preparation

Web-based application related activities

COSTS Labor for food preparation and delivery Rent for Preparation space Fleet Leasing for Delivery Media Content development costs Software development and IT support

VALUE PROPOSITION

Grocery delivery service

Automatic weekly replenishment of groceries based on subscription service

Portion control, dietary restrictions and food substitutions for more healthful meals

Weekly meal scheduling

Track family preferences for meals over time

Hand-selected produce for Grocery Club Members and produce satisfaction guarantee

CUSTOMER

RELATIONSHIPS

Self-service via online portal

Personal service via

CUSTOMER RELATIONSHIPS Self-service via online portal Personal service via check guarantee

check guarantee

CHANNELS

Online portal

Third party partner site referrals

Delivery/distribution

system

CUSTOMER SEGMENTS

Grocery shopping customers who

care about eating healthy

want to minimize the amount of time spent preparing a meal

often eat out

don’t have the skills and knowledge required to prepare healthy meals at home

and knowledge required to prepare healthy meals at home REVENUE STREAMS Subscription Fees Additional Grocery Sales

REVENUE STREAMS

Subscription Fees Additional Grocery Sales Advertising Delivery Fees Partner revenue for associated services

Relationships between Variables

Relationships between Variables The online portal supports GC customer experience PARTNERS Food Wholesalers and

The online portal supports GC customer experience

PARTNERS Food Wholesalers and Distributors

Other cooking related partners (chefs, cookbook publishers, etc)

Content creation vendors for web platform (cloud- based)

Content provider for a Recipe Catalog

KEY RESOURCES Delivery & Logistics

Ingredient Preparation

Grocery Services

Scheduling and Planning Web-based Software

KEY ACTIVITES Delivery & Logistics

Delivery Drivers

Food Preparation

Web-based application related activities

COSTS Labor for food preparation and delivery Rent for Preparation space Fleet Leasing for Delivery Media Content development costs Software development and IT support

VALUE PROPOSITION

Grocery delivery service

Automatic weekly replenishment of groceries based on subscription service

Portion control, dietary restrictions and food substitutions for more healthful meals

Weekly meal scheduling

Track family preferences for meals over time

Hand-selected produce for Grocery Club Members and produce satisfaction guarantee

CUSTOMER

   

CUSTOMER SEGMENTS

RELATIONSHIPS

 

Self-service via online portal

 

Grocery shopping customers who

 

Personal service via home delivery and fresh check guarantee

 

care about eating healthy

want to minimize the

amount of time spent preparing a meal

 

CHANNELS

 

often eat out

Online portal

don’t have the skills and knowledge required to prepare healthy meals at home

Third party partner site referrals

Delivery/distribution

system

REVENUE STREAMS

 

Subscription Fees

Subscription Fees generate revenue by

generate revenue by

 

Additional Grocery Sales Advertising Delivery Fees Partner revenue for associated services

 

Relationships between Variables

Relationships between Variables The online portal supports GC customer experience PARTNERS Food Wholesalers and

The online portal supports GC customer experience

PARTNERS Food Wholesalers and Distributors KEY RESOURCES Delivery & Logistics VALUE PROPOSITION CUSTOMER
PARTNERS
Food Wholesalers and
Distributors
KEY RESOURCES
Delivery & Logistics
VALUE PROPOSITION
CUSTOMER
CUSTOMER SEGMENTS
RELATIONSHIPS
Grocery delivery service
Grocery shopping
customers who
Ingredient Preparation
Self-service via online
portal
Other cooking related
partners (chefs, cookbook
publishers, etc)
Grocery Services
care about eating
healthy
Scheduling and Planning
Web-based Software
Automatic weekly
replenishment of
groceries based on
subscription service
Personal service via
home delivery and fresh
check guarantee
Content creation vendors
for web platform (cloud-
based)
Portion control, dietary
restrictions and food
want to minimize the
amount of time spent
preparing a meal
substitutions for more
healthful meals
often eat out
Content provider for a
Recipe Catalog
KEY ACTIVITES
Delivery & Logistics
CHANNELS
Weekly meal scheduling
Online portal
Delivery Drivers
Track family preferences
for meals over time
Third party partner site
referrals
don’t have the skills and
knowledge required to
prepare healthy meals at
home
Food Preparation
Web-based application
related activities
Hand-selected produce
for Grocery Club
Members and produce
satisfaction guarantee
Delivery/distribution
system
COSTS
REVENUE STREAMS
which pays for
Labor for food preparation and delivery
Rent for Preparation space
Fleet Leasing for Delivery
Subscription Fees
Media Content development costs
Software development and IT support
Additional Grocery Sales
Advertising
Delivery Fees
Partner revenue for associated services

Least Price Sensitive

Most Price Sensitive

Least Price Sensitive Most Price Sensitive EZ DOES IT Head of Household Non-Grocery Shopper Weekend Cooker

EZ DOES IT

Head of Household

Non-Grocery Shopper

Weekend Cooker

Occasion Cooker

Hybrid Shopper

Shopper Weekend Cooker Occasion Cooker Hybrid Shopper Willing to Spend Least Time Preparing and Cooking On

Willing to Spend Least Time Preparing and Cooking

On a Budget

NEWBIES

Student

Recent Grad

Customer Segmentations

NEWBIES Student Recent Grad Customer Segmentations $ There are many types of customers who value cooking
NEWBIES Student Recent Grad Customer Segmentations $ There are many types of customers who value cooking

$

NEWBIES Student Recent Grad Customer Segmentations $ There are many types of customers who value cooking

There are many types of customers who value cooking healthy meals at home

True Foodies

Curious Cooker

True Foodies Curious Cooker MY FOOD IS LOVE Food Embracer Integrated World

MY FOOD IS LOVE

Food Embracer

Integrated World

Willing to Spend Most Time Preparing and Cooking

World Willing to Spend Most Time Preparing and Cooking Reformed Traditionals Extreme Couponers COOKING FOR

Reformed Traditionals

Extreme Couponers

COOKING FOR SPORT

Most Price Sensitive

EZ DOES IT Food Embracer Non-Grocery Shopper True Foodies Integrated World Head of Household Curious
EZ DOES IT
Food Embracer
Non-Grocery Shopper
True Foodies
Integrated World
Head of Household
Curious Cooker
Occasion Cooker
Hybrid Shopper
Least Price Sensitive
Occasion Cooker Hybrid Shopper Least Price Sensitive Willing to Spend Least Time Preparing and Cooking On
Occasion Cooker Hybrid Shopper Least Price Sensitive Willing to Spend Least Time Preparing and Cooking On

Willing to Spend Least Time Preparing and Cooking

On a Budget

Student

Recent Grad

Targeted Customer Segmentation

Student Recent Grad Targeted Customer Segmentation $ The Grocery Club will appeal to customers who value

$

Student Recent Grad Targeted Customer Segmentation $ The Grocery Club will appeal to customers who value

The Grocery Club will appeal to customers who value convenience above all

27 |

The Grocery Club | May 3 2012

Willing to Spend Most Time Preparing and Cooking

May 3 2012 Willing to Spend Most Time Preparing and Cooking Reformed Traditionals Extreme Couponers Non-Grocery

Reformed Traditionals

Extreme Couponers

Non-Grocery Shopper Price insensitive, willing to spend more for convenience, no time for cooking, frequently orders out

Head of Household Manages families diet, pre-plans shopping trips, relatively price insensitive, has less time for meal prep/cook

Occasion Cooker May not have extensive knowledge about cooking, doesn’t cook on regularly but will for special occasions

Hybrid Shopper Shops at multiple grocery and home good retailers for specific purposes, has relatively more knowledge about pricing & ingredients, brand conscious

Curious Cooker Wants to cook but doesn’t have the knowledge or training to be confident in cooking, interested in cooking a variety of food, willing to try exotic recipes, willing to spend more on food if they know it will be “worth it,” likes dining out

Market Share

Market Share Online grocery sales projected to increase $451,000,000 PeaPod Revenue 2010 375,000 Customers $589 B

Online grocery sales projected to increase

$451,000,000 PeaPod Revenue 2010 375,000 Customers
$451,000,000
PeaPod Revenue 2010
375,000
Customers
$589 B US Grocery Sales 2010
$589 B
US Grocery Sales 2010

98.6%

50% PeaPod Market Share 1.4% Online Grocery Sales
50%
PeaPod
Market
Share
1.4%
Online Grocery Sales

Brick & Mortar Grocery Sales

Profit Model

REVENUE MODEL RESOURCE VELOCITY Weekly Subscription pricing of 6-21 meals/week. High inventory turns possible since
REVENUE MODEL
RESOURCE VELOCITY
Weekly Subscription pricing of
6-21 meals/week.
High inventory turns possible
since stock is limited based
on limited number of meals.
Menu suggestions based on
seasonal special pricing.
Profit
Model
TARGET UNIT MARGIN
COST STRUCTURE
Conservative pricing strategy
positions unit margins at 30%
High fixed costs->
Subscription pricing supports
pushing volume
costs-> Subscription pricing supports pushing volume The Grocery Club positions its pricing strategy between

The Grocery Club positions its pricing strategy between retail grocery shopping and prepared meals from restaurants

Costs

Costs Conservative Pricing Strategy YEAR 1 YEAR 2 YEAR 3 Development Rollout Growth 30 | The

Conservative Pricing Strategy

YEAR 1 YEAR 2 YEAR 3 Development Rollout Growth
YEAR 1
YEAR 2
YEAR 3
Development
Rollout
Growth

30 |

The Grocery Club | May 3 2012

Assumptions

Assumptions Conservative Pricing Strategy ESTIMATED MEAL COST $5 Average meal cost (per person)   2 Number

Conservative Pricing Strategy

ESTIMATED MEAL COST $5 Average meal cost (per person)

 

2

Number of people (per meal)

12

Number of meals per week

$120 Total avg food cost per week

PRICE

1S

Subscription Number Markup percentage

 

30%

 

$36 Margin

$156

Price per week

YEAR 1

 

0 Estimated number of adopters $0 Estimated revenue per week

52

number of weeks

YEAR 2

 

469 Estimated number of adopters

$73,125.00 Estimated revenue per week

 

52

number of weeks

$877,500 Profit

YEAR 3

1,250 Estimated number of adopters

$195,000 Estimated revenue per week

 

52

number of weeks

INITIAL ASSUMPTIONS

Conservative pricing considering WTP in this space

Meal costs are an average, so we have margin to play with in case they are higher than estimates once we rollout

Rollout in 2 sites in Y2, then expand to 4 in Y3 (Peapod has 24 total sites)

IMPLEMENTATION

Y1 // Develop infrastructure for service (staffing, IT, WMS, website integration, sculling line build out Adoption rate at 0% due to development

Y2 // Rollout into 2 markets Adoption rate estimated at 1.5%

Y3 // Rollout into additional 2 markets Adoption rate estimated at 2.0%

KEY PERFORMANCE INDICATORS

Number of subscribers

Customer retention for subscription service - projections assume that subscribers will have paid for the whole year

Number of meals served

BREAKEVEN POINT

Total meals served at 259,487 to breakeven at low estimate (416 subscribers @ 12 meals/week for 52 weeks)

Cash Curve*

Cash Curve* THE GROCERY CLUB will realize profits within 3 years of start YEAR 1 YEAR

THE GROCERY CLUB will realize profits within 3 years of start

YEAR 1 YEAR 2 YEAR 3 IDEA COMMERCIAL- REALIZATION GENERATION IZATION 6,720,000 Support costs Speed
YEAR 1
YEAR 2
YEAR 3
IDEA
COMMERCIAL-
REALIZATION
GENERATION
IZATION
6,720,000
Support
costs
Speed to
Time to
market
volume
Start-
up costs
-1,323,000
LAUNCH

32 |

The Grocery Club | May 3 2012

*For a household of 2 people at $156 weekly subscription for 12 meals per week

Cash Curve*

Cash Curve* THE GROCERY CLUB will realize profits within 3 years of start YEAR 1 YEAR

THE GROCERY CLUB will realize profits within 3 years of start

YEAR 1 YEAR 2 YEAR 3 IDEA COMMERCIAL- REALIZATION GENERATION IZATION 6,720,000 Support YEAR 1
YEAR 1
YEAR 2
YEAR 3
IDEA
COMMERCIAL-
REALIZATION
GENERATION
IZATION
6,720,000
Support
YEAR 1
costs
Speed to
market
Market study in
Washington DC
and Chicago
Start-
up costs
-1,323,000
LAUNCH

33 |

The Grocery Club | May 3 2012

*For a household of 2 people at $156 weekly subscription for 12 meals per week

Cash Curve*

Cash Curve* THE GROCERY CLUB will realize profits within 3 years of start YEAR 1 YEAR

THE GROCERY CLUB will realize profits within 3 years of start

YEAR 1 YEAR 2 YEAR 3 IDEA COMMERCIAL- REALIZATION GENERATION IZATION 6,720,000 YEAR 2 Speed
YEAR 1
YEAR 2
YEAR 3
IDEA
COMMERCIAL-
REALIZATION
GENERATION
IZATION
6,720,000
YEAR 2
Speed to
Time to
market
volume
Pilot in two
cities with one
warehouse in each
Start-
up costs
-1,323,000
LAUNCH

34 |

The Grocery Club | May 3 2012

*For a household of 2 people at $156 weekly subscription for 12 meals per week

Cash Curve*

Cash Curve* THE GROCERY CLUB will realize profits within 3 years of start YEAR 1 YEAR

THE GROCERY CLUB will realize profits within 3 years of start

YEAR 1

YEAR 2

YEAR 3

IDEA COMMERCIAL- GENERATION IZATION YEAR 3 With Support costs pilot, successful roll out two Speed
IDEA
COMMERCIAL-
GENERATION
IZATION
YEAR
3
With
Support
costs
pilot,
successful
roll out two
Speed to
more
cities
market
Would not see any
equipment costs
and would be most
profitable
Start-
up costs
LAUNCH

6,720,000

-1,323,000

35 |

The Grocery Club | May 3 2012

*For a household of 2 people at $156 weekly subscription for 12 meals per week

Maximizing Efficiency

Maximizing Efficiency How might we INCREASE SPEED TO MARKET Identify which cities to do the pilot,

How might we

INCREASE SPEED TO MARKET

Identify which cities to do the pilot, develop web platform and train employees within first year

12 month market study in Chicago and DC

Strategic partnerships and marketing campaigns to increase adoption rates

REDUCE TIME TO VOLUME

Scale-up to 2 additional cities across the United States in Year 2

Standardization and delivery of consistently high- quality service and goods

REDUCE START UP COSTS

Use existing vans and warehouse space to leverage synergies with Peapod’s existing infrastructure

Easily replicated and scaled warehouses

New web platform utilizing current IT infrastructure

REDUCE SUPPORT COSTS

IT and Website integration

Sculling line build out (existing warehouses Chicago and DC)

Easily-maintained, smaller warehouses

THANKS, Questions?

THANKS,

Questions?

APPENDIX

APPENDIX

APPENDIX

Comparative Costs for other Meals - Willingness to Pay

Meal Type

Cost per Person

# in Family

Total Cost

Cost for 12 Meals

Frozen

$4

2

$8

$96

Fast Food

$5.51

2

$11.02

$132.24

Take-Out Food (ex. Chinese food)

$8

2

$16.00

$192

Grocery Club

$10.41

2

$20.82

$249.84

Fast Casual (ex. Corner Bakery)

$11.5

2

$23.00

$276

Casual Dining

$15

2

$30.00

$360

Sources:

http://www.kellogg.northwestern.edu/faculty/matsa/htm/Reynolds-2009.pdf

http://en.wikipedia.org/wiki/Fast_casual_restaurant

http://voices.yahoo.com/best-frozen-entrees-best-tasting-best-prices-3836352.html

Typical Weekly Grocery Bills by Generation

Top Reasons why shoppers leave their grocery stores

Millenials

$69.40

43%

ISO Lower prices

Generation X

$107.10

25%

Poor Selection, Long Lines, Poor Quality

Boomers

$106.40

17%

Employee Rudeness

Matures

$89.60

14%

Crowds

Source:

Source:

Conumer Reports, “Best & worst supermarkets,” May 2012, pp16-23

Conumer Reports, “Best & worst supermarkets,” May 2012, pp16-23

APPENDIX

Finanical Projections for Multiple Pricing Scenarios 2 people, 12 meals/week

YEAR 1 - DEVELOPMENT

Low Estimate

Mid-Range Estimate

High Estimate

($156/week)

($200/week)

($250/week)

Total Revenue

$0

$0

 

Total Costs

$1.3M

$1.3M

$1.3M

Net Profit

-$1.3M

-$1.3M

-$1.3M

Cumulative Cash Flow

-$1.3M

-$1.3M

-$1.3M

YEAR 2 - ROLLOUT 1.5% adoption rate in 2 markets 469 subscribers

     

Total Revenue

$3.8M

$4.875M

$6.0M

Total Costs

$2.9M

$2.2M

$2.3M

Net Profit

$1.7M

$2.7M

$3,8M

Cumulative Cash Flow

$386K

$1.3M

$2.5M

YEAR 3 - RAMP-UP 2.0% adoption rate in 4 markets 1,250 subscribers

     

Total Revenue

$10.1M

$13M

$16.3M

Total Costs

$3.4M

$3.7M

$4.0M

Net Profit

$6.7M

$9.3M

$12.2M

Cumulative Cash Flow

$7.1M

$10.6M

$14.7M

MID-RANGE ESTIMATE - YEAR 1 (based on higher subscription price)

EST MEAL COST

$5 Average meal cost (per person)

2

Number of people (per meal) Number of meals per week

12

$120 Total avg food cost per week

PRICE

2H

67%

Subscription Number Markup percentage

$80 Margin

$200

Price per week

YEAR 1

0 Estimated number of adopters $0 Estimated revenue per week

52 number of weeks

YEAR 2

469 Estimated number of adopters

$93,750 Estimated revenue per week

YEAR 3

52 number of weeks

$1,950,000 Profit

1,250 Estimated number of adopters

$250,000 Estimated revenue per week

52 number of weeks

 

YEAR 1 -- DEVELOPMENT

 

Revenue

 

375,000 current peapod annual customers

0.00% (typical early adopter rate)

0

adopters

0

meals per week

0

weeks per year

0

total meals per year

 

$0

prepared meal revenue/yr

Costs

Equipment

 

$15,000

cost est per piece equip, need peeler, scrubber, dishwasher,

7

pieces of equip on avg

$105,000 total equip costs per processing site

2

sites

 

$210,000 total equip costs across corporate

 

50,000 scullery sq ft est. $5 $/sq ft/yr

 

$483,000 total additional rent

Website Dev

 

developers at $150k for 6 months $150,000 salary plus benefits

2

1

years

 

$300,000 total dev costs

Labor

 

$30,000.00 labor per year p/p

3.

workers per site

$90,000.00 yearly labor costs per site

2

sites

 

$180,000 total labor costs across corporate

Marketing

 

10% percentage of sales (includes packaging)

 

$0 total marketing cost across corporate

Management & Customer Service

 

2

additional staff

$75,000 yearly salary

 

$150,000 total additional labor costs

Total Costs

 

$1,323,000 fixed + variable across corporate

 

Net Profit

 
 

-$1,323,000

Cumulative Cash Flow

-$1,323,000

MID-RANGE ESTIMATE - YEAR 2

YEAR 2 -- ROLLOUT & PILOT

 
 

Revenue

 

375,000 current peapod annual customers

31,250 estimated market size in pilot (2 warehouses) 1.50% (typical early adopter rate) 469 adopters

12

meals per week

52

weeks per year

292,500 total meals per year

 

$4,875,000

prepared meal revenue/yr

Costs

Equipment

 

$15,000

cost est per piece equip, need peeler, scrubber, dishwasher,

7

pieces of equip on avg

$105,000 total equip costs per processing site

2

sites

 

$210,000 total equip costs across corporate

 

50,000 scullery sq ft est. $5 $/sq ft/yr

 

$483,000 total additional rent

Website Dev

 

developers at $150k for 6 months $150,000 salary plus benefits

1

1

years

 

$150,000 total dev costs

Labor

 

$30,000.00 labor per year p/p

7.

workers per site

$210,000.00 yearly labor costs per site

2

sites

 

$420,000 total labor costs across corporate

Marketing

 

10% percentage of sales (includes packaging)

 

$487,500 total marketing cost across corporate

Management & Customer Service

 

6

additional staff

$75,000 yearly salary

 

$450,000 total additional labor costs

Total Costs

 

$2,200,500 fixed + variable across corporate

 

Net Profit

 
 

$2,674,500

Cumulative Cash Flow

$1,351,500

MID-RANGE ESTIMATE - YEAR 3

YEAR 3 -- CONTINUED ADOPTION

 

Revenue

 

375,000 current peapod annual customers

62,500 estimated market size in pilot (4 warehouses) 2.00% (typical early adopter rate) 1,250 adopters

12

meals per week

52

weeks per year

780,000 total meals per year

 

$13,000,000

prepared meal revenue/yr

Costs

Equipment

 

cost est per piece equip, need peeler, scrubber,

 

15000

dishwasher,

7

pieces of equip on avg

105000 total equip costs per processing site

4

sites

 

$0 total equip costs across corporate

 

50,000 scullery sq ft est. $5 $/sq ft/yr

 

$966,000 total additional rent

Website

 

developers at $150k for 6 months $150,000 salary plus benefits

1

1

years

 

$150,000 total dev costs

Labor

 

$30,000.00 labor per year p/p

7.

workers per site

$210,000.00 yearly labor costs per site

4

sites

 

$840,000 total labor costs across corporate

Marketing

 

10% percentage of sales (includes packaging)

 

$1,300,000 total marketing cost across corporate

Management & Customer Service

 

6

additional staff

$75,000 yearly salary

 

$450,000 total additional labor costs

Total Costs

 

$3,706,000 fixed + varialbe across corporate

 

Net Profit

 
 

$9,294,000

Cumulative Cash Flow

$10,645,500

HIGH-RANGE ESTIMATE - YEAR 1 (based on higher subscription price)

EST MEAL COST

$5 Average meal cost (per person)

2

Number of people (per meal) Number of meals per week

12

$120 Total avg food cost per week

PRICE

2H

108%

Subscription Number Markup percentage

$130 Margin

$250

Price per week

YEAR 1

0 Estimated number of adopters $0 Estimated revenue per week

52 number of weeks

YEAR 2

469 Estimated number of adopters

$117,188 Estimated revenue per week

YEAR 3

52 number of weeks

$3,168,750 Profit

1,250 Estimated number of adopters $312,500 Estimated revenue per week

52 number of weeks

 

YEAR 1 -- DEVELOPMENT

Revenue

375,000 current peapod annual customers

0.00% (typical early adopter rate)

0

adopters

0

meals per week

0

weeks per year

0

total meals per year

$0

prepared meal revenue/yr

Costs

Equipment

$15,000

cost est per piece equip, need peeler, scrubber, dishwasher,

7

pieces of equip on avg

$105,000 total equip costs per processing site

2

sites

$210,000 total equip costs across corporate

50,000 scullery sq ft est. $5 $/sq ft/yr

$483,000 total additional rent

Website Dev

2

developers at $150k

$150,000 salary plus benefits

1

years

$300,000 total dev costs

Labor

$30,000.00 labor per year p/p

3.

workers per site

$90,000.00 yearly labor costs per site

2

sites

$180,000 total labor costs across corporate

Marketing

10% percentage of sales (includes packaging)

$0 total marketing cost across corporate

Management & Customer Service

2

additional staff

$75,000 yearly salary

$150,000 total additional labor costs

Total Costs

$1,323,000 fixed + variable across corporate

 

Net Profit

 

-$1,323,000

Cumulative Cash Flow

-$1,323,000

HIGH-RANGE ESTIMATE - YEAR 2

 

YEAR 2 -- ROLLOUT & PILOT

Revenue

 

375,000 current peapod annual customers

31,250 estimated market size in pilot (2 warehouses) 1.50% (typical early adopter rate) 469 adopters

12

meals per week

52

weeks per year

292,500 total meals per year

 

$6,093,750

prepared meal revenue/yr

Costs

Equipment

 

$15,000

cost est per piece equip, need peeler, scrubber, dishwasher,

7

pieces of equip on avg

$105,000 total equip costs per processing site

2

sites

 

$210,000 total equip costs across corporate

 

50,000 scullery sq ft est. $5 $/sq ft/yr

 

$483,000 total additional rent

Website Dev

 

1

developers at $150k

$150,000 salary plus benefits

1

years

 

$150,000 total dev costs

Labor

 

$30,000.00 labor per year p/p

7.

workers per site

$210,000.00 yearly labor costs per site

2

sites

 

$420,000 total labor costs across corporate

Marketing

 

10% percentage of sales (includes packaging)

 

$609,375 total marketing cost across corporate

Management & Customer Service

 

6

additional staff

$75,000 yearly salary

 

$450,000 total additional labor costs

Total Costs

 

$2,322,375 fixed + variable across corporate

 

Net Profit

 
 

$3,771,375

Cumulative Cash Flow

$2,448,375

HIGH-RANGE ESTIMATE - YEAR 3

 

YEAR 3 -- CONTINUED ADOPTION

 

Revenue

 

375,000 current peapod annual customers

62,500 estimated market size in pilot (4 warehouses) 2.00% (typical early adopter rate) 1,250 adopters

12

meals per week

52

weeks per year

780,000 total meals per year

 

$16,250,000

prepared meal revenue/yr

Costs

Equipment

 

cost est per piece equip, need peeler, scrubber,

 

15000

dishwasher,

7

pieces of equip on avg

105000 total equip costs per processing site

4

sites

 

$0 total equip costs across corporate

 

50,000 scullery sq ft est. $5 $/sq ft/yr

 

$966,000 total additional rent

Website

 

1

developers at $150k

$150,000 salary plus benefits

1

years

 

$150,000 total dev costs

Labor

 

$30,000.00 labor per year p/p

7.

workers per site

$210,000.00 yearly labor costs per site

4

sites

 

$840,000 total labor costs across corporate

Marketing

 

10% percentage of sales (includes packaging)

 

$1,625,000 total marketing cost across corporate

Management & Customer Service

 

6

additional staff

$75,000 yearly salary

 

$450,000 total additional labor costs

Total Costs

 

$4,031,000 fixed + varialbe across corporate

 

Net Profit

 
 

$12,219,000

Cumulative Cash Flow

$14,667,375

Peapod Integrator

BUSINESS MODEL CANVAS

o d I n t e g r a t o r BUSINESS MODEL CANVAS Local

Local restaurants

Local Stores

Farmers markets and produce hubs

Assembly and delivery of products from multiple suppliers.

Managing relationships with local stores, restaurants and markets.

Managing the web interface for suppliers as well as customers.

Delivery vans

On-the-ground sales force

Temporary storage warehouses

Online platform that integrates multiple suppliers

Infrastructure of delivery vans and warehouses

Online store management

Maintainance of database of suppliers and customers

Provides the experience of enjoying meals at home, without being limited by any single service provider. For the person who has favorite items at many different stores, markets and restaurants and wants to be able to assemble a customized shopping basket that gets delivered to their doorstep.

Seamless integration - convenience oriented customers.

Self service and automated service

Online platform

Delivery vans and agents

Convenience obsessed “hybrid” eaters.

Has favorite items at many different stores, markets and restaurants and wants to be able to assemble her own shopping basket.

Will create what works for them from multiple vendors. Knows what they want from where.

Advertising from restaurants, stores, markets

Usage fees

Product placement from restaurant recipes and other kitchen product suppliers.

restaurants, stores, markets Usage fees Product placement from restaurant recipes and other kitchen product suppliers.

Multi-Sided Platform – Chef Connector

- Multi-Sided platform bringing - Personal service - Personalized inventory fulfillment - Culinary Social Butterfly
- Multi-Sided platform bringing
- Personal service
- Personalized inventory fulfillment
- Culinary Social Butterfly
- Local restaurants or chefs
looking to expand their
customer base
emerging chefs and restaurants
- Online order management and event
together with food connoisseurs
- Integration with existing
social network app of
facilitation
- “Catered “ cooking parties
choice
- Devising ways to further engage the
- Food connoisseurs that
don’t have time to do the
setup
- Online platforms such as
Facebook, Match.com,
Meetup.com, possibly
Opentable.com
customer and pull culinary preference
data about them to make the database
more valuable and enable higher
brokerage fees
- Access to hip restaurant or
chef’s exclusive recipes &
knowhow
- Singles looking for new
kind of speed dating
- Novel and highly tangible
(olfactory, visual, taste) in-home
entertainment
- Emerging chefs and
restaurants looking to get
noticed
- Removing the work from having
a party with more than beer and
chips
- A new way to interact with your
friends
- Portioning system and delivery
fulfillment system
- Entice – online
- Engage - in-home
- Manufacturing and supply chain
experts
- Extend - through socialization
- ERP programming experts
bonds created with people of like
minded culinary interest
- Culinary experts, and chefs
- Inventory fulfillment system
- “Advertising” fee from new food brands looking to get their brand in front of customers
- Online database and order entry system
- Planning fees and increased margins on pre-measured foods
- Tie-in to Facebook or dating network (they’d license out this specialized
module to those platforms)
- “Advertising fees” from local restaurants looking to get their food brand established (may be risky to the restaurant
considering a home cook could screw up the recipe and tarnish the restaurant brand.
- Licensing Fees if not offset by providing chef new customer access
- Licensing fees to social networks looking to add a deeper element for members to connect across
- Reservation brokerage fees for connecting (reservations) our database of users to their restaurants. We will become
the knowledge experts of who likes to eat what, and use that to pair customers with restaurants. It would go beyond
OpenTable by knowing more about user’s culinary preferences.