GrubMarket Aims to Bring Farmers Markets Straight to Your Door

January 7, 2015

chi-grubmarket-mike-xu-bsi-20150102-001By Amina Elahi

Copyright © 2015, Chicago Tribune

There’s not much growing around Chicago these days. That means farmers markets are on hold and even the most persistent locavores are forced to shop at conventional grocery stores.

A young San Francisco company called GrubMarket hopes it can keep consumers connected to local food suppliers with an ecommerce platform that lets farmers and small food businesses sell their goods, even in mid-winter. The company expanded operations to Chicago in December in its first push beyond the west coast.

“I am a big fan of local food and supporting local farms,” said founder and CEO Mike Xu.

GrubMarket is a member of of the San Francisco accelerator Y Combinator’s current class. Xu said the company has raised $2 million from the program and other investors since launching in February. The platform includes 280 vendors who sell to the Chicago and San Francisco markets, Xu said. The majority of those are in the Bay Area.

Chicago is GrubMarket’s first expansion market because of Xu’s connection to the Midwest — he went to the University of Wisconsin at Madison — and due to the number of farms and farmers markets here.

The vendors GrubMarket works with may not be big enough or even willing to sell their goods through retail channels. Xu said his company can help those who want an easier way to sell directly to customers. He’s set on creating software to automate the inventory process, for example.

“We need to manage the logistics and communication with vendors, local small farms,” Xu said. “They need a lot of coordination with us and the buyers.”

Xu said GrubMarket has sold $400,000 worth of food, including fresh produce, cheeses, nuts, condiments, meats and more. GrubMarket contracts with drivers to offer free delivery of goods, though vendors have the option of charging customers for direct shipping. The site indicates when products will be available for delivery, so customers know if an item won’t be available until the following week, for example.

Sharon Seleb, the company’s general manager for Chicago and the Midwest, said Chicago customers can buy goods from vendors in Illinois, Indiana, Wisconsin and Michigan. She said she works with vendors and helps them market their goods with free photography. Since GrubMarket takes a negotiated percentage of vendors’ gross revenue, Seleb said it’s in the company’s interest to promote their goods.

Customers also have the option of ordering Grub Boxes, pre-selected cases of goods with themes such as fruits or meats to be delivered at regular intervals. The prices depend on size and contents. GrubMarket’s California Fruit Bounty box costs $45 for a regular box and $65 for the large version.

“Our customer is more educated, and they would understand the purpose of getting a certified organic apple versus the apple for 50 cents,” Seleb said. “In terms of price point, our prices will be more on par with a Whole Foods or a farmers market. They’re not cheap.”

The service thereby is unlikely to replace the grocery habits of most Chicagoans, said Darren Tristano, executive vice president at Chicago-based food and foodservice consulting firm Technomic. He expects Millennials or more affluent consumers — those who likely frequent farmers markets — to take interest in GrubMarket.

Tristano said the local food movement is driven by shoppers’ desire to make purchases they see as supportive of their communities or eco-friendly because products don’t need to be shipped as far. All of this has contributed to a change in these consumers’ values.

“Traditionally it’s been around price and quantity, but the new consumer equation seems to be around where does it come from, how does it connect to my lifestyle, can I connect to this brand?” Tristano said. “Those things are all driving value to a Millennial consumer and to those who can quite frankly afford it.”

Tristano also pointed to restaurants’ role in the success of farmers markets. In many places, he said, chefs seek out fresh goods from local markets. He suggested that some may turn to GrubMarket for similar reasons.

Let Them Eat Cupcakes

January 31, 2012

Let Them Eat

Let them eat cupcakes: Trend hits the region in a big way

Vanilla to red velvet, mini to jumbo — the cupcake craze is going strong in the Mohawk Valley, and for some, baking means big business.

Nationwide, cupcakes have been a hot item. Between 2006 and 2010, cupcake sales increased between 9 and 13 percent each year, according to the Perishables Group, a Chicago-based fresh food consulting firm.

“Cupcakes are thriving because they meet many current consumer hot buttons — indulgence, single-serve and convenience,” said Perishables Group spokeswoman Kelli Beckel. “They make cake an everyday eating occasion and allow shoppers to try new flavors.”

Locally, the confection has not only given rise to new specialty shops but also has increased the sales of established businesses.

Saving time and dough

The emergence of cupcakes began in 2008, around the time the economy started to struggle, said Darren Tristano, executive vice president of Technomic, a food-industry consulting and research firm.

Sweet desserts are similar to alcohol in that sales tend to increase with difficult financial times, he said.

“It’s still an affordable luxury,” Tristano said.

In spite of a struggling economy, specialty stores continue to open.

Candies N Cupcakes on North Madison Street in Rome, owned by Liz Davis opened Halloween weekend and had its grand opening the first weekend of December.

Davis, 26, was working out of her home for two to three years, selling cupcakes at farmers markets and for special events, she said.

It wasn’t until she was approached by Rome Mayor James Brown that she thought about opening a retail location, Davis said.

The city’s small business program and a matching loan from the Small Business Administration helped to make her store a reality, Davis said.

“People are purchasing them for weddings, baby showers, birthday parties and holiday parties,” she said.

Davis said she already has several weddings scheduled for this summer.

Cupcakes here to stay

Celebrating its 56th year in business, Holland Farms in Yorkville always has sold cupcakes, but they were made to order, said co-owner Marolyn Wilson.

“Now, we’re putting them out every day,” she said. “We’re probably making four or five times more than we’ve ever made before.”

The trend started ramping up several years ago, Wilson said, but it didn’t hit the Mohawk Valley right away. There is no denying the popularity now.

Wilson said this year the bakery will dub January “Cupcake Month.”

The hand-held dessert is not just for kids anymore, with more exotic and adult flavors such as pina colada and mocha chocolate, Wilson said.

“People can take one home and feel as if they are really giving themselves a treat instead of having to buy a whole cake,” she said.

In many areas of the country, specifically in larger cities, the cupcake market has reached saturation, Tristano said, while other areas will continue to see the trend grow.

Mintel Group, a marketing research firm, also expects the fad to continue.

“I would anticipate we will see the cupcake trend continue to develop, with perhaps more options that are better for you … with products that are customizable and with continued flavor variations,” said Jennifer Ballard, public relations coordinator for Mintel.

Locally, independent stores might continue to crop up.

Sugar Babes Cupcakes, owned by Kelli Grimaldi-Vance and Terri Puleo-Donato, is expected to open on Genesee Street in New Hartford in January.

“It started out through a discussion over a glass of wine where we said, ‘Let’s do cupcakes,’” Puleo-Donato said. “The next week we baked for a friend and it just grew from there.”

The largest growth for the business has been in catering for corporate events, she said.

Sugar Babes has been operating by renting local kitchens, but after an entire year and increasing demand, they will open a storefront.

“We’re very excited because we know there’s definitely a need for it,” Puleo-Donato said. “It’s a fun food. It makes people smile.”

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