Startup: How modPALEO does business

We reached out to modPALEO to give us an inside look at their growing business.

What is modPALEO?

We are a Charlotte-based, prepared meal delivery service that offers a fresh, modern approach to healthy eating. We believe in maintaining balance and wellness through the power of real food, well-sourced ingredients and sustainability. We offer gluten-, soy-, and sugar-free Paleo, Primal and Vegetarian items, delivered right to your door.

Purpose

To feed busy folks who share our interest preserving a diet of elemental foods, derived from lean proteins, non-processed carbohydrates and good, saturated fats. As part of our mission, we work to support a local food economy based on beneficial relationships between our farmers and customers.

First 60 days

Amber started modPALEO as a “side project” while working as a Project Manager for one of the larger institutions in town. Carter was running an outdoor bootcamp program, freelancing as a Graphic Designer and coaching at Ultimate CrossFit. She rented space in a kitchen shared by several local food trucks.

modPALEO began with a pilot group of 10 people, who were charged a flat fee of $100 each. That got you 10 meals for the week, based on estimated costs from the same farmers we purchased our own ingredients from at Atherton Market.

Those 10 folks met to pick up meals in “borrowed” bags from Trader Joe’s Sunday at 5 p.m. This was the original setup. Within that first 60 days, we had grown to 50 customers, purchased our first packaging system and three coolers to transport meals each Sunday.

Oh, and we got a Square, so we could take credit/debit cards – fancy!

Funding

Our own income was the base for modPALEO’s beginnings. And lots of volunteer hours from some of our favorite people (Lance, Theresa, Jordan, Jess, Cathy, Nancy – best funding ever… time). Every dollar of revenue outside of hard costs has gone back into improving our systems, facilities, technology and operations. To this point, we have not raised capital but have taken a few small business loans.

Money setup

We use Stripe to process online payments; Xero for accounting; Bank of America for banking; Flex-Pay for payroll; and American Express for anything we possibly can.

Progress by the numbers

• Revenue: $1 million (3-year average)
• Money spent with local farms and companies: Just over $100,000; or about 40% Cost of Food (2015)
• Customers per week: 250, average
• Meals per week: 2,500-3,000
• Site visitors: 1,141,458 page views during 250,763 visits from 168,315 users (since 1/1/13)

Growing pains

(1) Hiring. A small company is only as good at its people. Charlotte has a tough job market for small businesses. We’ve been lucky.

(2) Deliveries. One vehicle, 90K+ miles in 14 months, 37 refrigerators and hundreds of man hours… We eventually came to the conclusion that distribution was best left handled by the experts (FedEx).

(3) Packaging. Turns out, this is hard. Figuring out the best (read: cheapest + most effective ÷ most sustainable) method of packaging individual meals for convenience and then putting them in a deliverable package takes a lot of trial and error. And more trial.

(4) Scaling. Serving more meals means more ingredients, people and space (mostly for storage).

(5) Technology. We had a major website development hiccup about a year ago that hit us pretty hard. What seemed like the end of the world actually developed a platinum lining. It helped us look inside at our processes and efficiencies as a company. We’ve made some great improvements internally that have positioned us for “what’s next”! Stay tuned…

(6) Money. But that’s hard for every business, right?

Tools your team uses

• Magento – e-commerce website platform
• Stripe – payment processor
• Google Apps for Work – communicating & collaborating
• MailChimp – newsletter
• Wunderlist – lists, shared and individual
• DropBox – file management / storage
• Google Analytics – analytics software
• CAB A4+ Label Printer – label printing
• ShipStation – shipping coordination
• 5 Apple laptops, 3 iPhones, 2 iPads & 1 PC – computing & communicating.
• Multivac T200 – packaging, “Celia”
• Vacmaster 545 & 215 – “Bertha” & the original Sister Sealers
• 2013 Ford Transit Connect – +aftermarket refrigeration upfit (Carrier Zephyr 30s), for deliveries and catering, “Wynona the Meat Wagon”
• Canon EOS Rebel T5 – food photography (borrowed from Exec. Chef)
• Adobe Photoshop/Illustrator/InDesign CS5.1 – branding, creating
• Instagram
• Facebook
• Twitter

Kitchen: spiralizer, tilt skillet, three walk-in refrigerators, five reach-in coolers, convection ovens, gas range, grill, two refrigerated tables, dollys, tape dispensers, boxes…

Business model

(1) a la carte – place an order of what want, when you want it. Checkout any weekday by 3 p.m. and your order arrives next day. No commitment.

(2) Subscription – “Set it and forget it” – weekly orders arrive with your specifications (no eggs, include breakfast items, etc) on any weekday you choose. Managed through online account.

Early customers

Those volunteers we mentioned earlier? Yeah… thank goodness for tradeout. Otherwise, early adopters were members of UltimateCrossFit, CrossFit Dilworth, CrossFit Vitality, and Charlotte Health Center in the CLT metro area. Then we expanded our delivery area (relying on one refrigerated vehicle) to cover Greenville (SC), Asheville, Charleston (SC), Winston-Salem and Raleigh/Durham/Chapel Hill. Now we rely on the experienced pros for distribution – FedEx.

Team

• Amber Lewis, Trailblazer
• Carter Lewis, Socializer
• Kris Reid, Persuader
• Brandon Cress, Coordinator
• Brett Haughney, Rainmaker
• Jared Machleit, Craftsman
• Tara Cameron, Researcher
• Julio Delcid, Cook
• Hector Dominguez Santiago, Cook
• Reina Matute, Packager
• Elsa Garcia-Godinez, Packager
• Crystal Johnson, Packager

What’s next

Growth. Serving nutrient-dense and sustainable food to as many people as possible. We are working to decrease shipping costs, increase our reach and develop the future of what a meal delivery service can be.

How can Charlotte help you?

Buy our food. Know and support local farms and restaurants who do their due diligence in providing and sourcing quality foods. That’s how we all win.