How This Meal Kit Company Fulfills Its Mission by Putting Other Companies in the Spotlight
In this America’s Small-Business Heroes edition of The Fix, Entrepreneur Associate Editor Lydia Belanger shares her conversations with founders and executives who have solved problems while keeping social impact in mind.
Andy Levitt worked in the pharmaceutical industry for the first two decades of his career. Then in early 2014, a documentary inspired him to change course and take a new approach to health.
The film, Forks Over Knives, shows how eating meat and dairy correlates with disease, providing a compelling argument for cutting back on animal products and adopting a plant-based diet.
“I was blown away by the idea of food as medicine, as opposed to drugs as medicine,” Levitt says. “I turned to my wife and said, ‘I’m going to start a plant-based meal kit, because more people need to learn about this.’” That year, he launched Purple Carrot out of his garage in Needham, Mass.
At the time, subscription meal kit companies were growing in number and popularity, and Levitt says he was betting on the staying power of the convenience model, as well as America’s heightened interest in plant-based eating due to its benefits for human health and environmental sustainability.
Another food trend Levitt identified was a preference for locally sourced items, which he initially tried to incorporate into Purple Carrot meals as much as possible. Purple Carrot does not produce any of the ingredients in its boxes and never planned to, instead sourcing all of the products that go into its recipes from third-party suppliers. This allows the company to focus on creating the recipes and selling the final product: a meal in a box.
But the company had trouble securing local ingredients consistently, given the challenge of building a national network of farmers and other local suppliers.
Purple Carrot tapped into yet another eating trend when it deprioritized local sourcing.
“I shifted relatively quickly to the idea of focusing on more artisanal and bespoke products that would not be considered mainstream yet,” Levitt says, explaining that the company began partnering with other plant-based brands to fulfill ingredients. “This would create a more compelling and novel user experience for our customers, who could have access to products that they may not otherwise know about.”
The company looked for brands aligned in their efforts to help consumers shift to more plant-based eating, discovering them at trade shows as well as connecting through inbound and outbound inquiries. Partnering brands whose products Purple Carrot has featured as ingredients include Banza (chickpea-based pasta), Wildwood (tofu) and Follow Your Heart (vegan mayonnaise, or “Vegenaise”), among others.
By curating its boxes, Purple Carrot works to help up-and-comers get exposure for their niche products while being careful not to craft recipes that seem contrived for that sake. This takes some careful structuring of partnership terms and conditions.
“We have varying levels of product partnerships or sponsorships that can dictate the frequency by which we might use that product or guarantee a certain number of recipes over time,” Levitt says.
Additionally, some brands pay for the rights to be in Purple Carrot boxes to sample their products (e.g. protein bars and cold-pressed juices) to the Purple Carrot customer base.
“We’re very cautious about overdoing that, and we’re very selective about which brands we would ever put in our boxes,” Levitt notes. “We take very seriously the trust that our subscribers put in our brand and in us to bring to them products that they want, not just put a bunch of product samples in their boxes each week.”
The team within Purple Carrot responsible for optimizing supply chain maintains relationships with partners, staying in regular contact to ensure both parties can meet demand. However, when a partner has an issue, Levitt says Purple Carrot is understanding, especially due to the small size of many of its partners, and adapts recipes accordingly.
Mutual benefit is key to Purple Carrot’s partnerships with its suppliers. Purple Carrot receives ingredients from partners such as Banza at a discounted price, and in return, Banza gets the word out about its products. Partner brand names appear in the recipes themselves, and Purple Carrot offers additional promotion on its social media channels.
“The brands that we partner with look at us as both a distribution opportunity and an advertising opportunity that balances against their own internal cost of goods,” Levitt says, “and, in parallel, it allows us to keep our cost of goods lower than it would otherwise be.”
“We partner with brands that are values aligned,” Banza COO Mike Tarullo said in a statement to Entrepreneur. “Their chefs plan out one to two great recipes a month, and we provide the pasta. We've found the best partnerships for a startup like us are simple ones.”
Levitt says that inclusion in Purple Carrot boxes helps brands “cut through the clutter” at grocery stores, where they’re surrounded by competitors. It’s hard for brands to distinguish themselves on grocery shelves, and many turn to in-store samples, often paying third-party sampling companies to represent them, then being forgotten by customers as soon as they’re no longer onsite.
“We have a unique delivery mechanism,” Levitt says. “We have 100 percent guarantee open rate on our boxes given, what people are paying each week to get our product.” This year, Purple Carrot will ship more than 3 million meals to subscribers.
Purple Carrot is careful about how it selects and maintains relationships with networks of partners. However, Levitt’s accounts of his company’s partnerships encompass only a handful of the factors a business should consider when it sets out to build a “constellation of allies” says Ben Gomes-Casseres, an author and professor at the Brandeis International Business School who specializes in alliance strategy and management.
Any company whose product or service is based on multiple partners has to manage all of those partners as a group, as well as individually. It’s not only complicated, but also presents the possibility of conflict if any of the partners’ offerings overlaps, Gomes-Casseres says.
“It’s not that you have to be totally segmenting each area.” he says, “You want to give each of your partners enough room to run, enough so they can develop their best work, but avoid that they start bumping into each other in an unproductive way.”
When entering into a partnership, it’s important to think long term about what the company’s needs might be in the future, he emphasizes. Maybe it will be helpful to have multiple partners in rotation that provide the same product, in case one of them faces a supply shortage. Or maybe you’ll decide you want a singular partner in a certain area.
“You want to think about the scope that each one of these players can play in,” Gomes-Casseres says. “It’s like a baseball team, and everybody has a role.”
In managing the group, umbrella companies might also consider establishing common standards that all partners must adhere to, Gomes-Casseres suggests. Or, they might give all partners a platform and opportunity to get together and share best practices. It’s in every partner’s best interest for fellow partners to deliver quality products or services, as the performance of the umbrella company will reflect onto each of them, and each will get cache from being involved.
Besides potential competition and cooperation among partners, another issue that might arise is the question of exclusivity. If the umbrella company has direct competitors, it may not want their partners to work with those competitors. Yet Gomes-Casseres warns against this: “I don’t think you can -- and it’s often not productive -- to enforce exclusivity on small companies that are trying their best to get their name out there.”
Purple Carrot is flexible with its small partners, which Gomes-Casseres says is essential, even among large firms in one-on-one partnerships. Deals should be open-ended to account for necessary changes encountered along the way.
“You have to build in a governance mechanism for dealing with change and adjustment,” Gomes-Casseres says. “It’s not like you can sign a contract and close your eyes and let it run. You have to be steering and managing each one of your relationships.”