Tessa Newell from FoodBeast talks with CEO Founder, Chai Mishra on the industry, supply chain, and an infinitely accessible world.
Why don’t you start by telling us a little bit about how you grew up, Chai.
I grew up in Northern India and moved to Berkley, California when I was 17. From a young age, I was always obsessed with the idea of how stuff gets made and how it gets to market, so it made sense for me to study engineering at the University of California. I ended up leaving school to work at startups all over the world, mainly working as a supply chain guy.
It couldn’t be more clear that reinventing how we get our groceries is your passion. Were you always fascinated by supermarkets and the food industry?
My dad (and my grandfather, too, actually) was an engineer. He owned a trading business which helped third world countries acquire machinery and he was always taking me to the warehouses where he worked. I really think this sparked my curiosity for industrial processes. Getting this behind-the-scenes look at such a young age always had me thinking, “What happens between dreaming up a product and getting it on someone’s doorstep?”
So when I started traveling the world, working for various startups in places like China and Estonia, I was always drawn to the operations aspect of the process, in all different types of industries.
Was the idea for Movebutter inspired or informed by your experiences with those startups?
Oh, absolutely. I worked for a start-up coffee company in Germany; they invented a machine that lets you roast, grind, and brew your own beans at home. My job was to work with coffee farmers in 50 countries, trying to find a way to get raw, green coffee beans to customers in 40-45 different countries.
One of the hardest parts of the job was seeing the unfairness of the industry. These farmers are paid $0.07 for their crops, but the company then turns around and sells those crops for $15 a bag. Not only that, but the standing methods for getting the product from the supplier to the customer is SO inefficient. It was a serious eye-opener for me.
Can you give us an overview of how Movebutter works? How will this e-grocery store fix the problems you saw in Germany?
Simply put, Movebutter is making high-quality food products more accessible and affordable for everyone. We build relationships with suppliers all over the country who ship their fantastic products to our warehouse in San Francisco. The products are packaged, labeled, and sent out that day to customers in all 50 states of the U.S.
Within the next two months, we’re actually going to be opening up warehouses in New Jersey and Texas. Yeah, we could feasibly do everything out of our San Francisco location, but these two new warehouses are going to cut down delivery times for customers not on the West Coast.
That’s a fantastic improvement to an already fantastic infrastructure.
We’re always trying to improve, especially when it comes to customer experience! We’re always trying to get more out of ourselves. Can we cut down the delivery time to within the hour? Can we make our products 30% more affordable? These are the questions we have to ask.
What foods do you hold, always?
All your typical, stock groceries! Movebutter holds all different kinds of meats, dairy, produce, pasta, sauce, etc. The great thing is, we hold a variety of high-quality products across the board, so customers have a lot of great options for everything they need.
That’s a great approach. Did you always know Movebutter would be such a democratic company?
Yes, we knew it needed to be democratic from the beginning. When you go into the store you have to buy what they have stocked, but we believe you should be able to say “This granola needs to be sweeter” or “I need a smaller option for milk because I don’t need a whole gallon.” What we didn’t know was if people would WANT to be this involved, but the response has been insane.
What are a few examples of Movebutter’s democratic practices?
A great example are the non-food items we were talking about. The people said they wanted soap, so we found a natural soap supplier in Montana that offers 10 varieties. We’ll have them vote on which type of soap we should hold from this supplier and the winner is what we’ll stock.
We also do something weekly called a “taste test.” Basically, we send out the items we’re planning on holding to a handful of customers each week and give them a score card to record their thoughts on taste, texture, etc. They’re encouraged to post their thoughts into the Facebook group – then we use that data to make the products better.
Truthfully, this is our biggest advantage in the industry: we can democratize food and other products. We can give our company and our consumers the economic advantage, based on how the public votes.
At other big e-commerce companies, who’s listening to consumer requests, some intern? We’ve literally cut out the need for a sales department – it’s product people handling these requests and concerns. I’m online all the time! I get into conversations with grandmas and college students about how they’ll use our honey and it always makes my day.
What kinds of populations are you hoping Movebutter will impact?
Right now our customers tend to skew female in their early 20s to late 30s, and they mostly live in urban areas. However, we really are a company for everyone. Small towns, especially in middle America, are also represented. These people often live in what we call “food deserts,” where they don’t have a store within five miles of them in all directions.
Our customer base is very much America in the sense that we run the gamut of races, cultures, backgrounds and political views. This connects to the core idea of who we are; we sell high-quality versions of everyday products, all centered around community.
You were quoted saying that Amazon’s acquisition of Whole Foods is a “step back for the consumer.” Can you explain why you feel the consumer will suffer?
Grocery was always offline, but we’ve been seeing it transitioning more and more to the online market. This WAS moving the industry towards more ethical practices and affordable food products by cutting out the middle man. But this acquisition is a huge step back from all that. Amazon selling Whole Food’s inventory online doesn’t solve the problem; there’s still the incurred cost from the 400+ Whole Foods locations the consumer has to pay. I firmly feel that this move slowed down the progress the industry was making. Who is this helping? It is a step forward for Whole Foods, but it’s a step back for Amazon as well as the consumer.
How will Movebutter fill the gap this acquisition may have made in the industry?
This is an important opportunity for us to step up our game in the wake of Amazon’s mistake. Ironically, this business move has effectively cleared the field below and above us in our industry. We’re looking around and seeing that we’re the last company standing in this new wave of digital. It’s troubling, but it’s also the greatest opportunity that’s come along since we started this company.
We’ve been getting non-stop calls from grocery stores and investors, because they’re realizing they need to move to e-commerce. So it’s now up to us to move the industry in the right direction.
We’re going to continue to pursue the idea of the “infinitely accessible grocery store.” For us, that means finding the greatest food out there, finding a way to bring it down to price points that anyone can afford, and then distributing it so everyone can get it. We’ll start with food (because that’s most pressing) and then move this idea out so it can apply to everything.
Walmart and Amazon can fight it out among themselves. Meanwhile, we’ll be building a better store for everything, quite literally the retail store of the future.