Michael Wystrach: Food Revolution
The concept of Freshly comes directly from your own personal experience trying to eat healthier and lose weight few years ago. Tell us more about that time and the story behind Freshly…
I grew up in Southern Arizona, on a ranch about 40 miles away from the Mexican border. My parents owned a restaurant, they still own that restaurant today. The restaurant itself has been on operation for 60 years, but we owned it for 47 years. I got into the food industry very early from all aspects, as a rancher, a farmer and as a restauranter. Then, after college, doing different jobs and going all around the US, then ending up doing invest some banking out of Wall Street. I decided to come back to Arizona and, in the process of turning 30 and working 16 hours a day and eating very poorly, I wanted to get back in shape. I thought that I was not in the shape I used to being in, and I was realizing that I no longer could get the results from the gym that I wanted to get. So I basically had a great family’s friend who started to write me about the diet that 15-20 years ago was called the Paleo diet. In america, the number one thing we were facing was the way we were eating. Out of all the things we were doing to help our health, the number one thing we could do was just eat better. I didn’t like cooking, so I said « Ok guys, cook me these meals and I’ll take them home and I’ll eat them ». After 60 days, I got the best shape in my life. I felt better than I ever felt and it was because I was eating the right food. It started from a vanity purpose, but what I realized is that food is the greatest drug we put in our body every single day. It affects how happy we are, how we sleep, how much energy we have, depression, etc… All of these things are largely controlled by food. I didn’t really started Freshly with the idea of starting a business. I started it because I had a problem and, like so many people, I was very busy. Usually, if you’re eating fast food, it means not healthy food, and I wanted to solve that problem for me. It turned out that that was a problem a bunch of people had because people started to ask me what I was doing. « Can you do it for me? ».
You founded Freshly in 2013 with 2$ millions made up of your own cash and investments from family and friends, and outside funding. You launched Freshly in January 2015. The company eventually secured $30 million in funding. When it’s your personal money invested in something, you cannot fail, you have to do it whatever it takes to make it succeed, don’t you?
Whenever you’re starting a business, it is always best to know that there’s a real market there. I think when you have the men for a product before you even decided to build a product, that’s always encouraging and makes you a little more willing to invest your own money and take the risk. Cause it is! Always, whenever you’re doing a start up, there’s a huge amount of risk. You certainly don’t want to fail, you will do a lot more to make sure it doesn’t fail but there’s always that risk.
Michael, you and your partner, are former investment bankers. How an ex-investment banker becomes CEO of a healthy food tech company?
It was a big jump but it’s always good when you feel passionate about something you’re doing. For me, and my co-founder Carter Comstock, the food system seemed so broken beneath that it was an easy jump. I didn’t understand why the world just closed their eyes and allowed the food system to be so broken. No other industry operates with such a consumer distrust as the food industry. It didn’t make sense to me why we felt that we all had to be nutritionists and experts to eat healthy food. I don’t know how to program iphones but I get to enjoy it. But for some reasons in food, you have to learn how to read a nutritional label and you have to do all of these studies. With Freshly, I wanted to build the kind of relationship you get with tech companies into food. All of the heavy work, all of the hard work is done for you as the same credit as you’re currently paying for food and the grocery stores.
Freshly targets what it believes will remain a large demographic of professionals, often in their late 20’s to late 30’s, who want to eat better but don’t have the time to cook. Who are your consumers today?
Right now, our product is based on singles, young couples or older couples. The product doesn’t do great for families but we’re gonna change that for launching some family plans and be really focused on family. Our consumer generally, tends to be someone who really value their time and value their health. They don’t want to sacrifice one to the other. So they dont want to feel like, in order to give up their free time, they have to do all their food prepping cook, or in order to get their time back, they have to give up their health. I think that’s a large group of people, I don’t think it’s a certain kind of person. It’s everyone! In food, the sensitivity is around price and we’ve made a big initiative. As we get bigger and bigger, we continue to lower prices and that is our plan and our role model. We understand that there’s a percentage of the US population that can’t afford our product. That pains us cause those people are the people who need best benefits from our products. So it is part of our mission to continue to lower prices to make our products more available to more people. We lowered our prices by 16% last year. This year knows a similar decrease in cost. A lot of our initiative is « How can we do this better for cheaper without sacrificing the quality? »
There are a lot of great companies in the food tech space today. In which way is Freshly different and why is it so successful?
In the US, food is a massive market. 1,3 trillions dollars of market. So it’s easy to say « food », but when we think about food, we interact with food in multiple different ways, and for multiple different reasons. You go out to dinner, with a loved one to celebrate and that’s experiential, that’s entertainment. Food is at the heart of that experience. You wake up in the morning, you decide to eat something, that’s not experiential, it’s just because you got to eat. There’re also different use cases. You look at companies like HelloFresh which is probably one of the most successful on food tech, they’re really offering the experience of cooking, which is an experience. It’s a great way to spend time with your kids, with your loved one. If you enjoy cooking, it’s a great way to stand an hour. The reality is we are limited on time, so we’re helping people get through the week with tasting affordable healthy meals. You don’t feel you have to sacrifice for convenience. When you get home at 9pm at night, you’re starving. The last thing you want to do is spend an hour cooking your meal. We want you to not feel you got to sacrifice to go get eat or eat frozen meals that taste horrible. We just want you to throw into the microwave or the oven a quick meal to taste great, and you feel good about yourself eating it. When you think of your week and how you’re going to consume food, that’s part of it, that’s not all of it. We don’t want to be all of your week. We want to give you time back so if you’re eating 6, 9 or 12 meals a week, that means that you’re spending that rest of the time with the things you love and enjoy, or saving time so on Friday, you really do enjoy cooking. Because, we do think that HelloFresh, for example, brought joy back to cooking. We want to take the mundane cooking out of your life, we really want cooking to be an experience. We want you to have fun with that. That’s why we’ve been so successful in what we do.
Your claim is to serve healthy food, using non toxic and recyclable containers. It’s a big part of your success today. Do you think that the fact of integrating the food production and that you partnered with Fedex are key success factors?
It’s been key for us because it allowed us to focus on our core business which is creating amazing tasting meals and not focus on delivery logistics. I don’t know how much Fedex and UPS spend but it’s a 100 to 200 billions dollars to build infrastructures. It’s a highly complicated business and we love handing that out to them and be like ‘You guys do all the work.’ They do a great job and we really enjoy our experience with them. It allowed us to bring the best world class meals and focus on bringing the cost down so we’ve been available to more people. As a startup, it’s really important to be very focused and not to deviate into different things. The best thing you can do in a business is to say no often. The easiest thing to do as a startup is to think « Yes, we deliver our own meal, yes! » The hard thing to do is to say no because it requires you to remain focus.
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