Hungryroot is an online grocery service that makes healthy eating easy and personal. Pulse 2.0 interviewed Hungryroot and Every App founder and CEO Ben McKean to learn more about the company.
Ben McKean’s Background
McKean has been an entrepreneur his whole life and started his first company while in college. McKean said:
“In 2009, I established Savored, the nation’s leading provider of yield management technology for the restaurant industry. Following the acquisition of Savored by Groupon in 2012, I served as Vice President and General Manager there, where I was responsible for managing its Reserve program.”
“Following my time at Groupon, in 2015, I founded Hungryroot and have since grown the company into an AI-powered grocery and recipe service that has redefined food-at-home, making it more personal, sustainable, and economical. My latest venture, ‘Every,’ harnesses the power of AI to create thought-provoking, conversational games, offering people a novel way to reflect, understand diverse perspectives, and forge deeper relationships.”
Formation Of Hungryroot
How did the idea for Hungryroot come together? McKean shared:
“I was inspired by the belief that food deeply impacts how we feel, and I wanted to create a packaged food company that focused on helping consumers feel their best by creating healthy-for-you products. Luckily, our customers loved what we were doing and asked us to expand our line. But what we found was that consumers craved the convenience of a “one-stop shop” when it comes to grocery shopping – they didn’t want to buy their yogurt from one place and their bread from another. So, in 2019 we pivoted our model to become an online grocery delivery service.”
“What we ended up creating solved for so much more than just the convenience. We help to solve real customer problems – for example, saving them time and worry, better supporting their health objectives, helping them discover new foods, and saving money through reduced food waste. We’ve found that AI is the natural way to achieve this goal, and that’s why, for the past four years, we’ve invested heavily in AI.”
“Today, Hungryroot gets to know you and uses AI to invert the shopping experience — you start with a full cart of healthy groceries and simple recipes you can edit instead of an empty cart you need to fill up. You spend minutes planning and shopping instead of hours and have an easy plan to use everything you receive. Our AI selects two-thirds of what our customers buy, saving them time and worry, introducing them to new foods, and helping them accomplish their health objectives better than they could on their own.”
Core Products
What are Hungryroot’s core products and features? McKean explained:
“We do what no other store or service does by blending recipe discovery, food planning, and shopping to create a stress-relieving, personalized experience that improves with every visit.”
“At the onset of signing up for Hungryroot, consumers are tasked with filling out our quiz, where they’ll be able to share information with us such as how many people in the household they’re feeding or what goals they’re trying to accomplish (is it to spend less time shopping, be introduced to new foods, eat healthier? etc.). From there, our proprietary algorithm recommends fresh groceries and simple recipes that best meet their needs. While customers have the option to edit their orders or change their preferences at any time, we’re finding that our predictive technology is so accurate that customers trust us to select the majority of their weekly groceries for them. And they’re willing to continue that feedback process throughout their journey because they see the impact it has on the accuracy of our predictions.”
“We currently offer over 600+ groceries that meet our high-quality Root Standard (free of artificial sweeteners, colors, and preservatives, no partially hydrogenated oils or high fructose corn syrup) and 6,000+ chef-crafted recipes that are nutritious, easy to follow, and aim to reduce food waste wherever possible.”
“We are committed to continuing to help solve our customers’ challenges – that’s why we support over 25 dietary restrictions and preferences more than anyone else in the industry. We’ve also launched several new filters this year to help our customers find exactly what they’re looking for, including macronutrient support (like high protein & less sugar), kid-friendly and even kitchen appliances (like air fryer & grill).”
Challenges Faced/Bottlenecks
Have you faced any specific bottlenecks in your sector of work recently? McKean acknowledged:
“In the past year or so, the grocery industry has faced bottlenecks with supply chain issues and constraints and, of course, inflation. But given that our business is built on AI and the data that powers it, we have significant structural advantages where we can use our AI to manage inventory and combat inflation.”
“Our AI allows us to be inflation-conscious by suggesting comparable, personalized alternatives to products experiencing either a supply chain shortage or a spike in price. For example, last year, there were a few weeks when the whole industry was experiencing a supply chain shortage in grilled chicken (which naturally caused a rise in the cost).”
“For a traditional grocery store, this meant they simply couldn’t offer the product on their shelves: a customer coming in, shopping list in hand, would find out none is available. They have to change their meal plan on the spot – a frustrating experience. Since we get to know our customers, what they like and don’t like, their weekly needs and preferences, we can recommend similar, alternative proteins that aren’t experiencing supply chain constraints and would work in their existing weekly plan just as well. No disruption for the consumer.”
“Our technology does all of this work – the shopping, planning, and budgeting – on the backend, which lessens the overall burden and cognitive load on shoppers.”
Evolution Of Hungryroot’s Technology
How has the company’s technology evolved since launching? McKean noted:
“Since pivoting to become an AI-driven grocery and recipe service in 2019, Hungyroot has grown more than 10x. Our use of artificial intelligence (AI) has been pivotal, enabling us to deeply understand our customers’ tastes, preferences, and health goals by gathering over 100 explicit data points per customer, doubling the industry standard. Alongside explicit data we collect, we also gather implicit data signals (what items you add or remove from your cart, what items you search for, etc.) and can build a relationship of trust with our customers that fuels this feedback loop and allows us to continuously enhance the user experience.”
“We’ve continued to expand and enhance our data collection and platform architecture and optimize our algorithm using data from over 7 million orders and over a hundred million groceries sold. These efforts ultimately help us deliver a highly personal experience to each and every Hungryroot user that consistently gets better and better over time, so much so that our AI selects two-thirds of what our customers buy.”
Funding/Revenue
After asking McKean about funding and revenue information, he revealed:
“From a company growth perspective, 2022 marked our strongest year of revenue growth since the company’s inception in 2015, which we were incredibly proud of. We closed out the year with over $237 million in net revenue, a +47% year-over-year increase from 2021.”
“We’re also experiencing tremendous growth in 2023. In the first six months of the year (January – June), we’ve achieved $182 million in net revenue, a 67% year-over-year increase. We have profitability today and are on track for continued profitable growth.”
“Our last funding was back in 2021 when we raised $40 million in Series C, and given the capital raised and our current economic profile, we don’t foresee raising capital again in the near future. Instead, we’re hyper-focused on creating the best possible experience for our customers.”
“I’m happy to share that today, we’ve achieved profitability, and our success can be attributed to the investments we’ve made to our AI-driven customer experience, including healthy groceries and simple recipes that our customers love, as well as our unique value proposition of convenience, health, and discovery. In the past three years, we’ve grown nearly tenfold, from $25 million in net revenue in 2019 to $237 million in 2022. The first six months of 2023 were also an inflection point in Hungryroot’s growth story, as we’ve achieved a revenue of $182 million (a year-over-year increase of 67%).”
Total Addressable Market
What total addressable market (TAM) size is Hungryroot pursuing? McKean assessed:
“Right now, the US Grocery TAM is $1.6 trillion and US Dining and Takeout TAM is $1 trillion. We see great opportunity to capture share from both audiences and thus, view our potential opportunity as being about $1 trillion across both.”
Differentiation From The Competition
What differentiates the company from its competition? McKean affirmed:
“Traditional or online grocery shopping takes Americans approximately 2-3 hours a week and requires painstaking planning, researching recipes, learning about nutrition, identifying foods that best support your diet, and browsing 40,000+ items to find the 10 to 20 you want. There’s also a lot of impulse buying of “things that look good” along the way without having a solid plan of what to do with the items, which is why the average household throws out one-third of the food they buy.”
“When you look at ship-to-home solutions such as meal kits or other delivery services, they lack variety, don’t always offer healthy groceries that are catered to specific dietary preferences, and recipes are often labor-intensive and take too long to prepare.”
“We’re taking inspiration from everyone in the space and combining the best parts to bring value to customers. Similar to grocery, we offer tremendous variety. Like meal kits, we focus on simple recipes and remove the mental load of meal planning. Unlike both, though, our approach is focused on leveraging AI to understand our customers and create a personalized grocery experience. By building a model in this way, we can solve our customers’ needs by saving them time and worry, better supporting their health objectives, helping them discover new foods, and saving money through reduced food waste.”
Inspiration For Every App
Along with building Hungryroot, McKean also launched an app called Every. The Every app was founded on the idea that there is something to learn from every person and perspective. And Every uses AI to guide reflection, build understanding, and uncover common ground. What was the inspiration behind developing your new app, Every? McKean replied:
“We live in an increasingly complex world that requires collective action, yet 70% of Americans feel distrust is hurting American society and 58% feel no one in their life knows them well. Divisiveness and loneliness are dominant themes that have been occurring, making communication and connection increasingly difficult in today’s society.”
“As I’ve immersed myself in the power of AI through my work at Hungryroot over the past couple of years, I’ve begun to believe there is an opportunity to use artificial intelligence to help us connect as humans. We all see and think differently, and AI can help us sort through that complexity. I created Every based on the belief that there is something to learn from every person and every perspective.”
How The Every App Works
Can you give a brief overview of how the app works? How does AI play a role within it? McKean replied:
“We’ve trained large language models and other generative AI tools to create conversational games ranging in content from fun and lighthearted topics (such as icebreakers) to deep and meaningful topics (such as exploring emotions and purpose). As users play the games, Every surfaces insights, understanding, and points of commonality between people. For example, you might find you and your classmate share a love for international travel, your team prioritizes humility in the workplace, or you and your partner both naturally take time to build trust. In this way, Every facilitates conversation, awareness and connection.”
Advice For New Entrepreneurs
For those starting out their entrepreneur journey, what advice do you have to share with them? McKean emphasized:
“My advice to others considering starting a business is to take that leap of faith. You can only plan so much beforehand, so don’t beat yourself up when things don’t work out or go as you anticipated they would. As a founder of a business and entrepreneur, you will learn the most by going through the motions, making mistakes, and learning from those mistakes.”
Future Company Goals
What are some of the company’s future company goals? McKean concluded:
“We’re focused on continuing to expand our offering in meaningful ways to help solve the challenges our customers face. Over the past year, we’ve greatly expanded our grocery and recipe selection, allowing us to support more of our customers’ needs. We launched several new family-focused offerings like our 2-in-1 recipe format, kid’s snacks, our kid-friendly filter, and also identified kitchen appliance-focused recipe breadth as an area of opportunity and have since rolled out new options for meals that can be quickly cooked in an air-fryer or on the grill during the summer months.”
“We also expanded our support of macronutrient preferences, capturing customer preferences in the onboarding quiz and ongoing food profile. We currently have the most robust options in the industry today, accommodating over 25 different dietary needs and thousands of recipes. Looking ahead, we intend to continue expanding our grocery offerings and recipe catalog to meet even more customer needs, with a goal to become their primary grocer.”
“Prioritizing meaningful advancements in AI is also a focal point in a few different ways. We’ll continue to optimize our use of AI to deepen our understanding of consumer food preferences and learn more from each customer by asking better questions and creating user experiences that encourage them to share more with us. This is also especially important as we expand our product breadth. There’s also an opportunity to explore long-term generative AI.”
“As foundation models such as GPT-4 evolve, we anticipate that our unique food-related dataset and, importantly, unique understanding of the consumers’ needs will allow us to merge large language models and our food-specific AI into what Sam Altman, CEO of Open AI, calls a ‘vertical middleware model.’”
“Beyond our customers and the business, we also see great potential for AI to positively impact the lives of our team members. For marketing and culinary purposes, we’re seeing AI impact content and recipe idea generation. In customer care, we’re excited about how AI can support our care agents with macro generation and issue analysis. These are just a few examples, but the opportunities to simplify day-to-day business operations are vast.”
