Cost control ‘Vital’ in health food business
The shocker was just how much environmentally friendly food containers cost.
Rueben Major and his partners at Vital Supply Co., a healthy meal delivery service, needed practical, affordable and compostable packaging.
“We could save 25 per cent of packaging cost by using plastic ... but we’re just not going to go that way,” Major said.
Vital Supply Co. delivers locally sourced and/or organic, dietitian-approved, glutenand dairy-free meals twice a week to Vital-branded fridges placed in businesses (often fitness centres) and offices. Home delivery is available for a fee.
Compostable containers are a surprisingly large expense in the already narrow-margin food business.
“Packaging makes up 7.5 per cent of the entire (retail) cost of a dish,” said Major, a former Earls Restaurant director of culinary and bar development.
Vital Supply Co. is one of the newer entrants to Vancouver’s nascent convenient healthy food industry.
Vital’s subscription model has no set terms and allows customers wide flexibility in ordering up to five meals a day from a weekly offering. Their hybrid customer pickup/home delivery model makes it possible to order five days of lunches (delivered Mondays and Thursdays) for as little as $70 a week, or $14 a meal including taxes, delivery and fees.
The year-and-a-half old business has 13 employees and delivers 1,500 meals a week and hopes to break even next summer. Their only location cost is rental commissary space at Ed’s Daily on Powell Street. They do their own deliveries but are seeking a logistics partner.
Complementary businesses such as gyms allow Vital to place a fridge on their site in return for meal credits and other benefits. The businesses decide whether to allow non-members to pick up Vital meals on-site. Vital has about 16 open pickup locations.
While Vital expected a strong office space market with employers subsidizing employees, “it’s something that happens in the U.S., but just hasn’t started happening in Canada quite yet,” Major said.
Instead, the partners (Braden Matthews, formerly an Earl’s head chef; Mackenzie Davis, formerly a Browns Restaurant Group general manager; and Dan Meyer, construction company owner) are seeing interest in office catering.
One key thing they’ve learned is their website needed much greater back-end sophistication and investment to allow clients to fully customize their selections. Version 2 will launch soon following a year of development. Another surprise was menu demands. “Every four weeks or so, we’ve gone through the entire menu,” said Major, who figures he needs to double the existing 60 menu items, a significant and time-consuming job.
“Scaling is definitely the key. In food, the margins are slim. This is a volume game for sure,” Major said.