National Post (National Edition)
It was probably too big a step to buy a farm right away, and so I thought, what is the next milestone I could shoot for: a tractor.
— GOODFOOD CEO JONATHAN FERRARI ON HIS AMBITION AS A SEVEN-YEAR-OLD.
Jonathan Ferrari was seven years old when he decided he wanted a tractor. Not a toy tractor, mind you, but a real tractor, like the big John Deere rigs he would see when his parents took him to country fairs outside Montreal.
To buy this tractor and, ultimately, a farm to use it on, he understood that he needed a savings account to stash his pennies, so he sweet-talked his grandmother, Jeannette, into opening one on his behalf at a bank on Queen Mary Road on the northern edge of Mount Royal.
“It was probably too big a step to buy a farm right away, and so I thought, what is the next milestone I could shoot for: a tractor,” Ferrari said.
Lately, the 32-year-old co-founder and chief executive of Goodfood
Market Corp., the Montreal-based online grocery store/meal kit provider he started in 2014, has taken aim at other milestones, such as growing the company's subscriber base to one million households.
As it stands, Ferrari is more than 30 per cent of the way there, and now runs a publicly traded company with about $400 million in annualized revenues, 3,500 employees, an estimated 45-per-cent share of the cutthroat Canadian meal kit market and the lofty goal of establishing itself, five, 10 and 20 years out, as an iconic national brand.
That is, a digital grocery store that is always just a click away, that delivers to your door and eliminates the hassle of schlepping around to the local standby, where parking can be an issue.
This idea is exactly what has been grabbing everybody's attention since March when COVID-19 forced people indoors. People shifted to remote work, restaurants closed and the joy of dining out got nixed. Household kitchens became places of inspiration, for some, and a cursed prison for others, with nothing beyond the same old meal rotation to look forward to.
Lockdowns, coupled with kitchen fatigue, seeded the conditions to accelerate the market penetration of meal kits. Case in point: Goodfood counted 246,000 subscribers at the end of February. It now has 306,000 subscribers — and counting.
But the huge spike in numbers invites some skepticism that perhaps the trend can't last, a pandemic-driven blip destined to ebb away the moment the local brew pub opens its doors again.
“That is the big question,” Ferrari said.
The answer, perhaps, can be teased from the results of a recent study examining the impact of COVID-19 on the food industry and e-commerce done by the Agri-Food Analytics Lab at Dalhousie University in Halifax.
Over the past six months, an estimated 4.2 million Canadians who pre-pandemic didn't use the internet to purchase groceries or meal kits decided to do just that, whether for delivery or curbside pickup.
More telling is that almost 50 per cent of the study's respondents said they would continue to buy food online post-pandemic, while almost 13 per cent had ordered meal kits, and may again.
“People didn't think of the internet as a provider for food before COVID-19,” Sylvain Charlebois, the Dalhousie
lab's senior director, said. “Now, people are looking at meal kits as part of the solution.”
To gauge whether people are truly hooked, Ferrari borrows from behavioural psychology, using the gym as an example. Make a New Year's resolution to start working out and stick to it religiously for a month, and you are much more likely to have found a new religion. Go to the gym once, skip a day here, skip four more there, and, well, better luck next year.
“Social scientists typically say a 30-day period of reinforcing a habit will make it last a long time,” Ferrari said.
Historically, and granted Goodfood's history has been brief, the company's target customer was millennials, who no longer had mom and dad around to buy and cook their groceries, as well as harried young couples with kids to feed and a desire to cook something tasty.
But what Ferrari has seen since March is a new meal kit customer altogether: the over-65 crowd.
“The demographics have shifted older,” he said.
Heather Spratt isn't old but, at 50, she is no millennial. She and her partner, Phil Emery, live in Toronto, have good jobs, no kids, and Spratt enjoys cooking, grading herself as a B-plus gourmet. Her pantry delights in miso seasoning, special oils and homemade stocks. Every meat dish she prepares — be it a pork chop, chicken thighs or a good old steak on the barbecue — is bathed in a homemade marinade.
In sum, Spratt makes darn tasty stuff, but, alas, six months into the pandemic, even she was stuck in a “food rut.” To jolt herself out of it, she and Emery adopted a mercenary approach to meal kit ordering and started cycling through the major players: Goodfood, HelloFresh,
Chef 's Plate and, lately PC Chef, buying from whichever outfit had the best deal.
“It has been a real balm during these times when the drudgery of cooking started to wear me down,” Spratt said. “Once the pandemic subsides, and we can mix things up again, we likely won't continue to use the meal services.”
Spratt may be an outlier, a rogue meal kit dabbler, picking and choosing her way through a pandemic, or else she could be a stand-in for a larger cohort of folks who turned to meal kits during a dark period and will turn away from them again once the world reopens.
But the number of recent adoptees and dabblers doesn't necessarily matter long term, not when the much larger truth among shoppers, even seniors — 10 per cent of whom bought groceries online during the pandemic, according to Mintel, a market research firm — is that e-commerce has become a habit in the $130-billion food industry, and Goodfood and its competitors are well positioned to profit from that shift.
“These guys deliver value,” said David Soberman, a marketing professor at the University of Toronto's Rotman School of Management. “Finding a good recipe is challenging, finding the ingredients to make a good recipe is challenging, and having user-friendly directions to put a recipe together is challenging, and so these guys solved three problems for consumers.”
Ferrari, theoretically, is sitting pretty, though the one thing he has learned in his six years as an entrepreneur is to stay patient. Investors might be clamouring for this and that, and analysts are always calling for good quarter-to-quarter numbers, but having a five-year vision is just as key as planning out the next three months.
The Goodfood of today is built upon meal kits. But Ferrari's plan for the company's future is to be a “groceraunt,” with an ever-expanding selection of Goodfood-branded offerings, say, extra old cheddar cheese and virgin olive oil, plus prepared meals and those yummy kits — for example, kefta beef burgers with puffy pita, harissa mayo, chopped salad and creamy slaw — all with paint-by-numbers instructions to ensure that even kitchen novices can chef them up in 20 minutes flat.
“We are a very small player,” he said. “Our edge is not our size, it is having focus.”
To help still his mind amid the daily thrum, Ferrari meditates and, to truly kick back, he reads biographies, most recently, The Snowball: Warren Buffett and the Business of Life.
“You can learn a lifetime of successes and mistakes from a single book,” he said.
Ferrari also pays attention to his bank account. Being a CEO, after all, has its perks, including a balance substantial enough to buy a piece of land in northern Quebec — and a green tractor.
“I just put in a purchase order to get my first tractor,” Ferrari said, with a laugh. “I will be doing my very first farming next summer; it is my dream come true.”