Ben McKean, founder, and CEO of Hungryroot, joined Cheddar News to explain how the company is hoping to redefine the traditional shopping experience with its artificial intelligence-powered personalization and how it is keeping up with ongoing severe inflation. “We get to know our customers' preferences and their objectives with their foods and we actually do the grocery shopping for them," he said. "We fill their cart with groceries and recipes that they're gonna love, that are going to meet their dietary needs, and their food objectives. And we deliver those to their home.”

Closing Bell

Hungryroot CEO on Transforming Grocery Shopping With AI Personalization

hungry route is serving up a new way to shop for groceries. The startup billing itself as the first ever ai powered personalized grocery service at hungry roots as its platform can predict and deliver the groceries and recipes the best suit each customer's needs and goals all while making grocery shopping more convenient, sustainable and affordable. So joining me now is the founder and ceo of hungry rube. Ben McCain Ben thanks so much for coming on. How are you trying to accomplish these goals with your company? Sure. Thank you for having me. Uh Well, we built hunger route to serve the person who cares about the food that they put into their body but doesn't necessarily want to spend the time to scour grocery stores for foods that are going to work for them, figure out recipes um of what to do with those foods. Uh And so what hunger does is is we get to know our customers preferences their objectives with their foods and we actually do the grocery shopping for them. We fill their cart with groceries and recipes that that they're gonna love um that are going to meet their dietary needs and their food objectives and we deliver those to their home. Uh and the service is really resonating with consumers as a result, here's a question um inflation prices up across the board, especially when it comes to food prices as we saw in this latest inflation report out this morning, specifically eggs and dairy products. How is that impacting your company? What strategic decisions are you making to offset some of those price gains. Sure. So food inflation is the highest. It's been since 1981, it's a very real challenge for our business and for the grocery industry um as a whole, uh the way we think about it is bye bye. Really delivering upon the core value proposition that we offer customers. So a key component of our businesses Um that we help people to minimize food waste. 20% of the food that's purchased at grocery stores is thrown out at the customer's home because they end up not using it or it spoils by the time they figure out what to pair it with 100 souls that need. So one way we're addressing this is simply by by continuing to deliver on the value proposition. Um The second is what we've found is is our customers are really looking for a flexitarian diet. They're not necessarily uh strictly vegan, strictly vegetarian, but they are looking to have maybe one vegetarian one vegan meal a week and hunger. It's a great solution for solving that. And as we all know, vegan vegetarian meals cost less, particularly in this environment where meat and seafood, um dairy and eggs are some of the highest rising prices out there. That's right. So maybe they won't be finding that many options. Been obviously with hungry roots, since they're more flexitarian, but still with prices up, are you needing to pass on those price gains to consumers? Should consumers expect to pay higher prices for your services this year? So for the seven years that hunger has has been in operations, We have never increased prices on our customers once. Um You know we are given the current environment, we are evaluating price and and and the way we're thinking about it is um is very simply if we can offset any price increase by um having the customer order a little bit more from us. Um Then it's a win win for for 100 for the customers. One of the key dynamics to the economics in a direct to consumer food business is that the higher the average order prices Uh the better economics there are for the customer and for the for the for the business. And that's because whether you're shipping $50 worth of food or $150 worth of food uh you still have to use the freight cost to get it to the end. Consumer, it's roughly the same shipping packaging, it's roughly the same pick and pack labor. Um So it's significantly more economical to ship $150 worth of food. So as we think about reevaluating price, we're going to incentivize customers to order more from us as a way of offsetting any price increases that we have to incur, okay so T. V. D. Has not been determined whether or not prices will be increasing yet this year. Is that right? It has not been determined whether or not we're going to try to hold off as long as possible. That being said, pretty much everyone in our industry has raised prices and so it's something that we are looking at very closely. Okay. Um Well, I know your last funding round was 40 million in a series c round back in june last year amid the current environment. Are you out there looking to raise more money? We're not, we we hungered is doing hundreds of millions of dollars of revenue a year. We have very strong growth profile. We have a very strong profitability profile. Uh so the business is very well capitalized uh and we're not in the market to raise at this time jane, founder and ceo of hungry roots, Ben thanks so much for coming on the show.