The startup that wants to make 'indulgence healthy' with things like chickpea cookie dough is launching nationwide, and just got picked up by Whole Foods
And now Hungryroot is looking to supersize its customer base through a nationwide launch and a deal with Whole Foods that will gets its products into retail stores. The Whole Foods launch, in particular, is a huge deal, McKean tells Business Insider.
"Whole Foods is the holy grail of grocery," McKean explains. When Hungryroot launched in 2015, the initial plan was actually to go for Whole Foods, like "99%" of other food companies, he says. But instead, Hungryroot decided to start with a direct-to-consumer strategy, which has allowed the team to collect detailed data and debut 40 products (for reference, Whole Foods will carry its four most popular). Ramping up production to reach a Whole-Foods level of demand is risky, he says, especially for new products.A few years ago, that type of direct-to-consumer launch wouldn't have been possible, McKean says. But he credits meal delivery startups for breaking open that possibility, and getting people used to the idea. Hungryroot is now shipping over 50,000 units per month this way.
McKean says that he expects 10% to 20% of the company's business to be Whole Foods, and to settle into a 30% retail split eventually (similar to Jessica Alba's Honest Co., which Hungryroot shares an investor with). Hungryroot hopes to be in 40 stores by end of summer and 100 by the end of the year. McKean says the economics of retail versus shipping direct are roughly comparable.
In March, Hungryroot raised $3.7 million from the likes of Lightspeed Venture Partners and Lerer Hippeau Ventures, in a round which brought its total funding to $6 million.
What these investors (and McKean) are betting on is the idea of turning guilty pleasures into something you don't have to feel bad about. "Our best-performing products are in formats people associate with indulgence," McKean explains: cookies, brownies, pasta, and so on.
And the team is always looking for new ones. Right now, Hungryroot is tinkering to try and craft a healthy birthday cake, "funfetti" batter, McKean says.