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Frozen Startup Goes Direct

New York-based Daily Harvest, a four-year-old frozen subscription/home delivery company, has more than 100,000 subscribers and is growing rapidly, says Rachel Drori, founder and CEO.

In a presentation at the recent Shoptalk conference in Las Vegas, she noted that her firm is building the customer base for a “superfood” frozen product line that emphasizes items infused with fruits and vegetables.

$43 MILLION RAISED

Late last year the company raised about $43 million in funding from investment firms and celebrities. That led to media headlines such as this one about two of the celebrity investors: “Gwyneth Paltrow and Serena Williams are Freezing their Assets.”

Daily Harvest’s line includes smoothies, chia parfaits, “functional” lattes, soups and gluten-free rolled oats. The brand’s story emphasizes hot-button food industry trends including e-commerce, transparency, health and wellness and convenience.

The big goal has been to solve a pressing consumer problem: the lack of readily available healthy, unprocessed foods for busy young professionals. Time-starved consumers typically reach for quick foods that are “hyper-processed,” Drori said.

Daily Harvest aims to address this challenge with pre-portioned frozen foods that are nutrient-rich.

The idea is to reintroduce frozen foods to consumers with a new story, and twin it with the convenience of subscription and delivery. Drori emphasized the message that frozen produce carries high levels of vitamins and antioxidants that result from being picked at the peak of ripeness.

“We’re educating people who grew up thinking frozen is a compromise,” she said.

The company engineered a dry-ice packaging solution that supports a direct-to-consumer home delivery strategy.

Daily Harvest’s items are prominently displayed on its website, including a range of smoothies, from “cacao and avocado” to “blueberry and hemp.” Chia parfaits include flavors such as “mango and turmeric” and “blackberry and majik.”

Lattes, according to the website, are “supercharged with functional botanicals and fresh ingredients, in three crave-able flavors.” Consumers get preparation instructions, such as for blending smoothies or heating soups.

EMBRACING DIRECT-T0-CONSUMER

Drori says the direct-to-consumer model allows customers to “sidestep the stigma” of the store freezer aisle, which “discourages interaction and discovery.”

Moreover, the brand’s strategy was designed to address the millennial’s need for product transparency.

“By owning the supply chain, we can have full transparency from beginning to end,” she said. “We use data we collect to track every piece of produce that goes from our farms to our freezers, and we can share that info with customers, which is radical transparency.”

The company offers a range of subscription plans, and its e-commerce model enables Daily Harvest to collect robust data about customers preferences, all of which help inform product research and development.

“We learn what our customers will like and iterate at rapid pace. E-commerce made things fast and easy.”

Not surprisingly, Daily Harvest’s marketing has a decidedly digital edge. One of its best channels for acquiring customers is the social media platform Instagram, known for its reliance on images.

“You taste with your eyes first,” Drori explained.

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