Chelsea Colby, MBA Class of 2015
On Monday, February 24th, the Stern Eats club hosted a panel discussion that I was lucky enough to moderate. The panel culled three speakers from a wide array of companies that all had one thing in common: they deal with the intersection between food and technology. Leadership from Joyride Coffee, Kitchensurfing.com, and FreshDirect all provided fantastic insight into the changing landscape of the food industry.
Adam Belanich founded Joyride Coffee in 2011 with his two brothers. The company started in the back of a food truck as New York City’s first mobile café. Joyride now provides specialty office coffee delivery and equipment to some of New York’s most innovative businesses and corporations throughout the New York City metropolitan area.
Chris Muscarella, Co-Founder and CEO of Kitchensurfing.com, aims to change the culinary landscape and create a new kind of dining experience. Kitchensurfing.com is a global marketplace for chefs that matches them up with people who need a cook at high and low price points and for a variety of types of engagements. Events range from cooking lessons for the kids to fried chicken parties to 10-course anniversary dinners.
Ron Breakstone, VP of E-Commerce at FreshDirect, aims to solve the challenge of finding a variety of groceries — it’s inconvenient to shop at different stores for different items. FreshDirect has found massive success and is now the leading online grocer in New York City and the Metropolitan area.
An edited transcript of the panel follows:
How does innovation help you reach people you wouldn’t have been able to reach otherwise?
Adam: Tech leads to a faster network effect. People share their photos but we still want to allow for high-touch. The product is perishable so we are JIT. We better understand the pattern of purchase, therefore improving the quality and the service.
Chris: Where to start? The rate of ecommerce penetration in food is teeny compared to everything. People are applying local services in a way that they haven’t in just the past five years. The chefs are not people who are on computers all day long. They are able to communicate through mobile.
Ron: Online retail is a $700 billion industry. Food is only 2% of that. This is a chance for growth. Other companies are seeing this. It is a little easier now because people are more tech-savvy and the purchase is seen as more normal. We have multiple apps for people’s convenience. We have star ratings to say how good something is. These ratings are done daily with an RF gun. Just as helpful are customer ratings. Lastly, about logistics there are many proprietary systems. Our dashboard is a series of screens that we monitor in real time. This means that we can get more trucks out or call people.
How are you using tech to separate yourself from your direct competitors?
Adam: Out closest competitor barely has a twitter handle. This is surprising for something as personal and visual as coffee. It is not something extraordinary. It is talking about our products in a real way. The other way is the high-touch experience. It is the brewer knowing that it has gone through X pounds of coffee.
Chris: I am a part-owner of many restaurants and I am against tech in the restaurants. Your phone shouldn’t even be on the table.
Ron: We aren’t just residential. We have vending machines that have sensors to know when to reorder. One distinguishing point is to not break the cold chain. We get shipments that go straight to our warehouse that is at a temperature ideal for keeping things fresh. From a tech standpoint, if you decide you want a specific ribeye, you can select how you want it sent. It is then cut by a butcher for you and sent in a refrigerated truck. The meat isn’t just sitting around. Even the fish might still be swimming around when you order it.
When you started the venture, what made it the right time?
Adam: we started with a food truck that would move around. It was a convergence of the craft coffee movement and spotting it. My background in restaurants also helped me to see the need.
Chris: I have been in restaurants for many years. In the beginning I felt bad about the pay scale for chefs. I kept that in the back of my mind. Also the breaking of the social contract where there is no pension or longevity. This leads to the entrepreneurial side. You do what you do. It became a question of figuring out the space and putting the pieces together. It is working one year in, but there is still much to go.
Ron: Well, I didn’t start Fresh Direct, though I wish I did! We are one of the first. If you look at the market back when it started, the marketplace was still there. We thought that we could do it better, and fresher. We started in the biggest market, which is good and bad. Suburbs are more difficult but can still do well.
Technology helps companies remain efficient and nimble. How do you see tech helping your company to grow in the next few months and few years?
Adam: At the core we are distribution. Tech helps with things like routing. It has lowered churn because we have better ways to talk to our customers. The cloud has also generated benefits.
Chris: As a long-time web nerd, I think of the web as nodes. When you look at marketplace business models there are many choices about centralizing and decentralizing. They both have their benefits. KitchenSurfing is relatively decentralized while controlling a few key things. We are in 5 cities. With tech in the next 5 years we will want to know what we can do to go to 60 cities. Perhaps we’ll have it self-serviced and no longer need to hold hands.
Ron: 25,000 employees and regional at the moment. It takes hundreds of different variables to consider delivery the ideal routing. Things like knowing if there is a parade. The routing is what lets us be efficient. We also have algorithms for product recommendations at the right time. It serves to be inspirations so that you don’t just buy the same things. Lastly, we are using a coupon aggregator where the customer can one-click redeem the coupon. This is more in line with how the customer experiences things at a physical store.
How have you seen the NYC tech scene help your business?
Adam: Software engineers and quality coffee seem to really go together. We can speak to each other well. There is a renewal for a corporate culture. There is a small pool of people that everyone is fighting for. Instead of fighting on pay, they can fight through benefits. Imagine if every cup of coffee you had in your life was a good cup.