Misfits' Chief Strategy Officer Kai Selterman says his company can deliver high-quality products at a great value while fighting food waste.
They Want Value
Last month, NielsenIQ gave a presentation at The NGA Show detailing how grocery e-commerce sales have slowed since the peak of the pandemic, but are still continuing to grow. According to James Hunt, SVP of North American retail for Chicago-based NielsenIQ, total grocery e-commerce sales increased 11.2% in 2022, with food accounting for 15% of that increase. Broken down by category, health and beauty care e-comm sales were up 10%, household care was up 20%, pet care was up 19% and baby care was up 16% in 2022. Overall e-grocery sales are expected to increase to a 13.6% share of the market by 2027, according to the 2023 Brick Meets Click/Mercatus 5-Year Grocery Sales Forecast.
Not only are inflation-battered consumers still attracted to grocery e-commerce, they are also re-defining “value”; instead of seeing online grocery as a luxury service that costs more, they see it as a way to save money by avoiding trips to the store, eliminating impulse buys and sticking to their budgets.
In fact, a February online grocery report from retail media platform Chicory showed that e-commerce is now more important than ever to consumers.
According to a survey conducted by New York-based Chicory of more than 1,000 U.S. consumers, 56% said that they order groceries online more frequently now than one year ago, and more than 72% had purchased groceries online in the past 90 days. Additionally, online grocery shoppers who spend the most on e-grocery orders — more than $201 — place orders the most frequently.
Misfits Market says that it’s delivering value to shoppers via its unique supply chain focused on reducing food waste.
"Our North Star is ‘We save consumers money by saving food,’” Selterman notes. “From day one, we knew we needed to build a differentiated supply chain if we were going to be successful. We built Misfits Market because of the inefficiencies in the food supply chain that existed in produce, and we’ve expanded that into all of the inefficiencies that exist in every grocery category. We call it our food value supply chain. Some examples of how we do this is partnering with suppliers to bring upcycled products to market. We also work with vendors to rescue food that would otherwise end up in the landfill.”
According to Misfits Market, it rescued 55 million pounds of food in the past year alone; the company also gobbled up one of its competitors, another e-grocery startup called Imperfect Foods, in 2022.
“The strengths of the Imperfect Foods organization, from its in-house delivery fleet and robust private label program to its sustainability commitments and innovation, add immediate scale and depth to what we’re building at Misfits Market,” Selterman says. “Already, we’ve been able to leverage Imperfect’s delivery network to improve the customer experience across a large portion of our delivery area, with features such as free shipping, lower order minimums and a packaging return program.”
In fact, Misfits Market notes that the combined business is on track to cross $1 billion in sales and reach profitability by early 2024.
“Combining forces will exponentially accelerate the ability to address a broken food system and create a formidable online grocer that’s focused on delivering value by fighting food waste,” Selterman observes. “The growth of Misfits Market over the past year proves that customers are looking for this new type of online grocery store, and customers are already changing the way they shop and eat.”