A generationIn just 5 years, Daily harvest, It provides customers with healthy and easy-to-prepare meals based on algorithmic taste preferences, disrupting the food industry and earning more than $250 million in revenue.

Moreover, even before the acceleration of home food delivery in 2020, this health-conscious and sustainable brand has already begun to set foot $43 million in funding From investors who are in line with the company’s vision.

In the latest episode of the HubSpot podcast, shake, Our hosts Alexis Gay and Brianne Kimmel talked with Rachel Drori, founder and CEO of Daily Harvest, to learn about what inspired her to build her brand, how she leads investors, how algorithms drive the business, and how she views the brand sales team.

Here are some highlights of the podcast:

Daily gains from the continuous expansion of the brand and customer base

Daily Harvest’s mission to provide healthy food

[00:21:26] Rachel Delori: We are not meal packs.We are more like one [00:21:30] Modern CPG is better than meal packs. Our food does not rotate. You don’t have to actually cook it. It is ready.

[00:21:42] Alexis Gay: Would you say that you are defining a new category?

[00:21:45] Zhuo Rui: Absolutely. I entered it because I am definitely a gourmet. … I want convenient food, because that’s why fruits and vegetables harden. …But I also want food, stuffed with everything I know is good for me. …Hippocrates said, “Let food be your medicine,” right? We finally declared medicine as a medicine by the Hippocratic Oath. And the food is a bit lost. So we are really here to change this situation.

…… The settings of Big Food have been severely damaged on the system. …Investors in large food companies, large consumer goods companies in the world, are really concerned about things such as profit margins, value-added, and slow and stable returns on dividends. …When you think about how to turn it into food…it’s very ugly. The way they are set up in structure is not innovative. A classic example is Kraft in recent years, right? Their major innovation last year was the introduction of pink macaroni and cheese. …They have just completely lost contact with their customers, and they don’t have the structural flexibility to keep pace with modern times.

What is driving the demand for Daily Harvest?

[00:23:57] Homosexuality: What drives the demand for your products? … Is the younger generation focusing on healthier food choices? Isn’t traditional family dinners part of our culture, is it because of the struggles of the catering industry? what do you think?

[00:24:15] Zhuo Rui: I think there are a few things. We are at the crossroads of a bunch-I hate to use the word-megatrends, right? …I think people are just smarter and have enough education to make people realize that if I stick to the most basic things—such as what my grandparents eat, what my great-grandparents eat—then I’ll be fine. So our whole food spirit is actually based on this idea, we won’t tell you what you can’t eat.

…We include everyone’s eating habits and everyone’s eating values, but we will provide the basis for fruits and vegetables. So our goal is to let everyone eat more fruits and vegetables. Then, if you want to add a piece of chicken to your harvest bowl…we think it’s good.

Navigating tricky investment projects

[00:25:42] Homosexuality: In 2017, you have an investment of $43 million, which is incredible. But in order to get this type of cash injection, it starts with a sales pitch. I want to hear about a promotion in 2017. How did you approach and make a promotion around Daily Harvest?

[00:26:02] Zhuo Rui: 2017 is the moment when we feel that the product and the market truly fit. So pre-funding-until then-I would say it is very difficult. People don’t understand how we collect this larger picture on this platform step by step. There was a lot of friction in the fundraising process, especially because the people I tried to raise funds didn’t see the problem. They were like, “Well, why, why don’t I buy Jamba Juice?” I thought, “I don’t even know where to start.”

[00:26:40] Homosexuality: Do you feel discouraged

[00:26:41] Zhuo Rui: After such a meeting? Oh, discouragement won’t even cover it up. I think fundraising is the most frustrating process.

[00:26:58] Homosexuality: What is the key message you really want to convey to the people you are looking for investment?

[00:27:05] Zhuo Rui: There are two things. The message I am trying to convey is this big picture. The big food was completely broken, and given this opportunity, the big food did not satisfy the customers. …I want to say that the point where it becomes very tricky is not necessarily the problem statement. Many people are really frozen.

[00:27:32] Homosexuality: Why do you think this is?

[00:27:34] Zhuo Rui: They still do it, but everyone likes, “Oh, so you are destroying frozen food?” I thought, “Soup is not a frozen category. Latte is not a frozen category. Breakfast cereal is not a frozen category. What is your logic?” Freezing is our way of making food very clean, unprocessed, convenient and sustainable. …You know, we really want to focus on that big picture to describe the story of our not pursuing frozen food.

…Finally, we did it. The other thing I was really looking for in that round of financing was that our investors share the same values. …I want to make sure that we will never fall into such a situation: some large-scale food investment community will bring many health challenges. … There are many guarantees that our investors will also have consistent values.

Looking for like-minded investors

[00:29:10] Kimmel: How do you actually reverse this statement and ask these investors questions, so that you can truly feel whether they will add value and become a valuable person to help you expand the scale of Daily Harvest?

[00:29:25] Zhuo Rui: When you sell, one of the tricks is that you are always selling too. So one of the things I did was to show that there was a great demand for these things from customers—just like sustainability is now a bet. This is not five years ago. It is just to show the direction of customer needs and show that there is another business income opportunity related to everything we hope to do in terms of sustainable development… is a very important part of the story. Some of the questions we raise are just to ensure that people’s opinions are unanimous, and are not actually directed at investors directly. They always invest in other companies, not the company they introduced to us.

…In those back-office calls, you asked about the time you have to weigh a very difficult decision: profit versus doing the right thing for the customer, right? For me, this is one of the most difficult tensions, and I always focus on what is best for customers-what is best for the planet is also best for customers.

Expand business

[00:32:08] Kimmel: What steps must be taken next to make Daily Harvest truly scalable?

[00:32:19] Zhuo Rui: Many of them exist in our supply chain. …We have a lot of great farmers, and we are in direct contact with them. To this day, we still carry out all purchases by ourselves and work directly with everyone. But many of this story are very idealistic. …It is difficult to do this on that scale.

…Even like our packaging, right? We have these grand plans to have packaging that is completely home compostable. There are a lot of stories to tell there because of scale issues. Therefore, when you talk about physical goods, you always encounter the question of whether the chicken or the egg comes first. In order to make the product cost-effective so that you can consider things like profitability, you must have the ability to prove those big The scale of things fluctuates.

Personalized customer experience

[00:34:15] Homosexuality: Many companies that provide food delivery services in a certain capacity are keeping their services very simple, focusing only on dinner or one type of food. But you have more than 60 kinds of breakfast, lunch and dinner. Are you interested in making a decision to provide more services?

[00:34:32] Zhuo Rui: Because we have this kind of direct contact with our customers. What we can do is that we are actually phenotypic taste beds, and we understand what each customer wants and needs, down to an incredible level of detail that allows us to create food for everyone. We do not treat customers as average. We really focus on everyone and create food to meet the needs of these customers.

… We have smoothies suitable for different tastes, preferences and different teas, dietary values ​​and different characteristics. As we expand to this depth of collection, we see that different groups consume on different days. So the way we think about it is really systematic. Over time, it also really helps to increase the share of the stomach, because we have been able to take this data and convert it to meet the needs of our customers.

[00:35:41] Homosexuality: How did you build it?

[00:35:45] Zhuo Rui: We have an incredible algorithm team, they are indeed a key part of our food delivery, and then personalization related to that development to ensure that we match the right people with the right food. That’s very creative.

[00:38:00] Kimmel: How do you balance qualitative insights? For example, do you have a great team to read customer support tickets? Do you have a focus group? How do you gather a lot of personal insights from every Daily Harvest user?

[00:38:14] Zhuo Rui: We can do this in two ways. One is that we have a very enthusiastic nursing team. …We really encourage our care team to be part of this journey of co-creation and add the context behind what we see in the data. This is a large part of what we do. Then we have an internal research team that connects the data we see with the emotion, psychology, and reason behind what we see. …This is a very powerful combination.

Daily Harvest’s changing marketing mix

[00:41:20] Homosexuality: I want to talk about your marketing mix. … In a world where startups rely so heavily on Facebook, Google, and Amazon for sales, you have invested in TV advertising in impact partnerships. …I would love to know what was your decision-making process when making some of these bets?

[00:42:11] Zhuo Rui: It’s easy to expand on Facebook. Now it is a completely different wax ball. The landscape has changed significantly…The landscape is always changing. It is a complete moving target. What works today will not work tomorrow. This is how you must live in this world. We are very active in entering every channel you can imagine, providing us with options and flexibility, so that we can change our spending in different channels according to what is happening at the time.

… Influencer marketing is part of our portfolio, TV is part of our portfolio, but I think the most important thing is-even if something works very well-you have to keep your spending and keep other channels involved If something changes, you can adjust and change the combination at any time.

[00:43:57] Kimmel: What do you think of some brands of Daily Harvest stuff, rather than like dealing with influential people and people who might use Daily Harvest, because it belongs to this new category that is easier and healthier.

[00:44:27] Zhuo Rui: People always say, “What’s the secret to your real rapid growth?” I’m actually talking about our supply chain. This is not the answer that people want to hear, but the reason is… If you have seen the Rogers Bell Curve, That is a normal bell curve, but if you think about normal product development work, you have insight, and then it may take up to a year to bring the product to the market.

… Climb up that curve, when you reach the top. This is usually when a large company goes public. right?Our supply chain agility and our data allow us to enter the market when early adopters are interested in something, and our early adopters become these evangelists because we listened to them.

…What’s really powerful is that it stimulates this virtuous marketing cycle to move yourself up this curve instead of facing headwinds while falling. In this case, you have to hire Justin Timberlake (Justin Timberlake) Just like throwing his ass off on TV. …Of course, we pay for some influential people, but in fact, what you see is that we co-create with our customers, and our customers are very happy that we listened to them and gave them what they wanted.

To listen to the full dialogue or view other episodes of The Shake Up, click here.

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