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Daily Harvest Turns Eating Veggies Into A Business Model

Timo Volz

There might not be a person alive who hasn’t been lectured about the importance of eating their fruits and vegetables, usually with a grim, defiant look on their face. Not to belabor the point, but…it really is important to eat your fruits and vegetables, kids.

One company that aims to help consumers do that is Daily Harvest, a New York-based startup that specializes in organic frozen-food products that are heavy on fruits and veggies. Its platform, which delivers food directly to consumers, is designed to make healthier eating easy by offering more than 100 options for any time of day.

“Fruits and vegetables are an essential part of living a longer life on a healthier planet,” Founder and CEO Rachel Drori said in a press release. “The Daily Harvest platform has removed the friction between the intent and the action of eating more of them every day.”

Photo Courtesy Nadine Primeau

Customers choose delivery plans based on the number of items they want and how often they want them delivered (weekly or monthly). Options include soups, latte pods, almond milk, plant-based ice cream, veggie bowls, flatbreads, and ready-to-blend smoothies. All come packed in dry ice.

Demand for Daily Harvest’s products and services is such that it is already racking up more than $250 million in annual revenue, even though it has only been in business for five years. Early financial backers include Serena Williams’ Serena Ventures, Gwyneth Paltrow, Bobby Flay, 3L, VMG Partners, and Suttona Capital.

Daily Harvest reached an important milestone in November when its valuation passed $1 billion, helping it earn unicorn status. That valuation came after the company raised $77 million in a round of Series D funding that was led by Lone Pine Capital LLC and also included existing investors.

The latest funding round will be used to bolster Daily Harvest’s data and technology, including personalizing its services to better meet individual eating preferences. Daily Harvest will also expand its culinary portfolio so that new items are available in a matter of weeks.

“With this investment, we will continue to anticipate the needs of our growing customer base, meeting them in new places with new food,” Drori said.

Daily Harvest will also expand its footprint in 2022 so that customers can purchase its food in person to meet growing customer demand. In January, it plans to open its first brick-and-mortar location, The Tasting Room in Chicago, as part of a broader strategy to make the brand accessible to more people.

Daily Harvest, like many food-delivery companies, enjoyed a spike in demand (and brand exposure) during the COVID-19 lockdown, which kept many consumers locked inside for months at a time, unable to dine out. Meanwhile, the company has managed to sidestep supply-chain problems that have plagued much of the food industry this year. The primary reason is it sources most of its produce from inside the United States, and doesn’t have to worry about delayed overseas shipments.

Photo Courtesy Farsai Chaikunlgamdee

Another competitive advantage Daily Harvest enjoys is its ability to innovate and tweak items faster than larger food companies. That’s largely due to the fact that it relies on direct feedback from customers to improve its product lineup – and acts on that feedback quickly.

An example is the company’s “Scoops” ice cream product, which was developed after customers said they preferred ready-made ice cream instead of having to blend products together to make it themselves.

In addition to its focus on customer service, Daily Harvest puts a high priority on sustainable ingredients and supplies. About 95% of the ingredients it uses are organic, and it always goes organic for pesticide-intensive fruits and vegetables such as strawberries, spinach, nectarines, apples, grapes, peaches, cherries, pears, tomato, celery, potatoes, and bell pepper.

The company uses only recyclable materials for its boxes, cups, and lids, as well as for the insulation surrounding the dry ice. Its bowls are made of molded pulp and can be curbside recycled or industrially composted. 

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