Launched in 2017, wholesale platform Foodbomb connects restaurants and cafes with a marketplace of around 160 suppliers, simplifying the ordering process. But, in the wake of the Covid-19 pandemic, the business opened its doors to direct-to-consumer (D2C) sales to buoy the market through periods of empty supermarket shelves. Now it’s unlikely to turn its D2C offering off. Here, we talk to founder and chief executive Paul Tory about what the move has been like. Inside Retail: Can you tell
u tell us about Foodbomb, and what you’ve been doing through the Covid-19 supply chain crises? Paul Tory: The main aim of Foodbomb is to connect hospitality venues to suppliers. We consolidate all their ordering from suppliers on a single platform via a marketplace. We have 160-odd suppliers across different categories, so the venues can search while ordering for what they need across one platform, and they’re just managing one account. But, back in March 2020 when the first lockdown occurred, we were in a situation where supermarket shelves were empty, everyone was panic buying, supermarkets stopped doing deliveries, and we had this network of suppliers that were full of stock, and most of our clients, restaurants, and cafes, were shut down. So we had this perfect storm where people were desperately after toilet paper, hand sanitiser, fruit and veg and our suppliers were afraid their goods would perish, so we created a D2C offering very quickly that connected to that home-delivery customer. And it boomed. It was crazy for us. We had 15,000 registrations in the first month, and as a company, it was an incredible stop-gap during that lockdown period. Since then, we’ve maintained it, and we’ve kept it running all the way through [the pandemic]. Our suppliers saw an opportunity to capture a bit more market share, and they were nervous about further lockdowns, so we’ve kept it going. Now, whenever there has been a lockdown, our D2C sales skyrocket, and then they fall away again once things open up, and we’ve seen that trend all the way through to today. IR: How many direct-to-consumer customers have you had throughout the pandemic? PT: Thousands. There’s a core group of about 400 that are consistently loyal buyers, but we’ve had thousands come and go and take advantage at different times. There are certain aspects which are really great for buyers – since we supply restaurant-quality food, they can buy this product at wholesale prices with free next-day delivery [in Sydney, Melbourne, and Brisbane]. We don’t have two tiers of pricing, so our suppliers are selling B2B and D2C prices at the same price. I’ve had people send us photos of their food and veg saying: “I just spent $60 on food and I can’t believe how much I got”. It may not be ideal for every family, we have minimum order values in each category, but every time there’s a lockdown, our suppliers lower those minimums to push their consumer sales. IR: Would you say this experiment has changed the way Foodbomb will continue to operate moving forward? PT: Yeah, I can’t see us closing down the D2C arm. It’s not our core focus, but we now have two customers – B2B and D2C. As long as our suppliers are happy to continue serving D2C customers the same pricing, and we can maintain a high level of service, we’ll continue to offer it. Potentially down the line, we could focus on it a bit more, but we are a relatively young company and our focus now is definitely on B2B. Our suppliers have gained an extra income spread and I don’t think they’d appreciate [us turning it off], to be completely honest. However, we have 160 suppliers on Foodbomb and not all of them do it. It’s up to the individual supplier to choose if they do it, and even then we haven’t invited every supplier to take part. A household doesn’t necessarily want to look through ten different suppliers for each product category, so we’ve only got our best on offer. IR: We know what the supply chain crises have looked like on the consumer side, can you tell us what it’s looked like on the supplier side? PT: In fruit and veg, there have been challenges. We’ve found a lot of our suppliers have got in the habit of donating food to charities and hospitals [before it goes off], rather than throwing it away, which has been great. But to be honest, a lot of the complications that have come with supermarkets, which are servicing millions of people, have come with the scale of their operations. IR: What have you heard from suppliers around the methods the Government has implemented to help ease the pressure on the supply chain? PT: I think it has eased the pressure and it has helped. I think the general narrative that things aren’t as dire as they once were has helped a lot of workers to be confident and come back to work, and to be able to use rapid antigen tests rather than wait for a PCR test. That has been a massive change. And suppliers have applauded that. Fortunately for us, this latest spike has come at our quietest time of the year. Traditionally the last two weeks of December and the first few weeks of January are quiet for the foodservice industry, so it came at the right time [for us].