Thinking Outside the Crate
Minneapolis-based Local Crate is pushing the envelope of meal-kit delivery services with fresh, locally sourced ingredients and chef-inspired recipes, gaining national recognition along the way. “We want to be the first national, local meal service,” says co-founder Frank Jackman.
By “local meal service,” Jackman means locally sourced services, ingredients and recipes. Local Crate sources as many ingredients as possible within a 150-mile radius of the Twin Cities. Jackman and co-founder Mike Stalbaum also partner with local chefs to create their seasonal recipes. “About 80 percent of our dollars stay in the local area,” says Jackman.
While Local Crate’s kits are currently only available in Minnesota—the company can fulfill same-day delivery to about three-quarters of the state’s population—Jackman and Stalbaum hope to expand into new markets using the same locally sourced model. But first, they have to prove they can scale locally.
The pair launched Local Crate in November 2015 after raising money through a Kickstarter campaign. In their first year, they had $450,000 in sales and are on track to more than double that this year, according to Jackman. The outlook is good: Meal-kit delivery services generated nearly $1.5 billion in sales last year, according to market researcher Packaged Facts. This year, Packaged Facts estimates the meal-kit delivery service market to be worth roughly $5 billion.
The greatest difference between Local Crate and other meal-kit services is the company’s partnership with local chefs. Not only are the recipes chef-inspired, but Local Crate creates videos of the chefs showing customers how to prepare the meal as they talk about where the ingredients came from and what inspired their dish. “It creates a deeper experience and connects the consumer with the chef and farmers,” says Jackman.
The company’s flexibility, along with a dedication to sustainability and supporting hunger relief organizations like Finnegans, Chef Lucas Foods and East Side Table, is another way Local Crate sets itself apart. “We use about 80-percent less packaging than other meal-kit companies,” says Jackman, and “customers can pause, skip, cancel and change their orders at any time.” Local Crate has the lowest minimum order of two meals per week, compared with the industry standard of three meals. Like most meal-kit services, each meal requires a minimum of two servings. One of the benefits of Local Crate’s flexibility is customers can order additional servings for one of their meals if, for instance, they are having friends over, says Jackman.
Ordering is simple. Each week customers pick from 12 different recipes and choose how many meals and servings they want. The crates are shipped directly to the customer’s doorstep or office, complete with every pre-portioned ingredient to make the recipe, a recipe card with step-by-step instructions and information about one of the farmers or businesses that supplied ingredients.
To keep things fresh, recipes rotate weekly. There are also gluten-free and other diet-sensitive options. Two meals (four servings) a week cost $13.50 per serving; three or more meals a week (six-plus servings) cost $12 per serving. Since Local Crate knows exactly how many portions they need each week, they order exactly what they need, creating minimal food waste.
One of the greatest challenges for Local Crate is planning ahead. “We have to plan at least two months ahead and figure out what ingredients we can use based on the season,” says Jackman. But that doesn’t bother him too much, he says—“local responsibility is the core of our business.”
The meal-kit delivery services market is estimated to be worth roughly
The concept resonated so much with Techstars and Target that Local Crate was selected in July as one of 10 startups to participate in the Target + Techstars second annual retail accelerator program. The three-month intensive startup accelerator focuses on bringing new technology, experiences, products and solutions to retail by pairing startups with mentors from Target and Techstars’ network. Through the program, Stalbaum and Jackman hope to find a strategic partner and learn how to successfully scale their business. “We want to make sure we have a sustainable model before we grow nationally,” says Stalbaum. “It’s important that we focus on the food and fit the technology within the process,” adds Jackman.