Healthy food for a reasonable price
Thrive Market, a four-year-old online membership-based natural and organic food retailer, has successfully found a niche using Costco as a model, but just for healthy products. Nick Green, along with his two co-founders Gunnar Lovelace and Sasha Siddartha, saw a big opportunity to make healthy food more accessible for middle-class American shoppers who found Whole Foods too expensive and were overwhelmed by the increasing choices at discounters. Members pay an annual membership fee of $59.95 to enjoy a 25 to 50 percent discount off traditional retail prices. For every membership it sells, Thrive gives away one to a low-income family. The company, which now has about 6,000 products, started with grocery items like snacks and non-toxic cleaning products, but has expanded to include fresh meat and seafood, sourced from suppliers using ethical practices. It allows shoppers to shop by diet, from organic to paleo. Green declined to offer specific sales figures, but says it does hundreds of millions of dollars in annual sales. Green spoke with The Associated Press about the inspiration for Thrive, the business model and why he’s not afraid of Amazon.
What was your inspiration for Thrive?
At the time, you had trusted retailers like Whole Foods, who weren’t accessible to most people. And then you got the conventional retailers who were starting to have more organic offerings. And if you are new to the category, you’re trying to figure out, “Where do I start?” We really want to make it simple and easy. That meant getting the prices down, but it also meant curating the catalog. So instead of having 40 almond butters, let’s have four.
What’s your business model?
We charge $60 annually. You pay it one-time upfront. It gives you access to the site the entire year, and then we price at basically wholesale prices so we are making very little money— if any — on the products we sell, passing on all the savings to our members. Our business makes money on the membership fees. Costco was the natural touchstone for us.
What’s a big trend in food?
Simplification, fewer ingredients. We’re always trying to remove ingredients from products.
Aren’t you threatened by Amazon’s purchase of Whole Foods?
Amazon is going after a different opportunity, which is to pull Whole Foods to the mainstream. What we want to do is pull the mainstream to us by standing for something that is real and stems from our values.
What’s next?
One of our big goals over the next one to three years is to become a more complete solution. We will be expanding our frozen assortments. We’re launching a clean wine program.