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Munchery Shuts Down

• k_sh 8y ago
  I could've sworn that they closed down a year or two ago. Are you sure you just got this? Edit: yeah, looks like this happened 8 months ago (https://munchery.com/blog/a-letter-to-the-munchery-community/ https://munchery.com/blog/a-letter-to-the-munchery-community...) Edit 2: oops, that was only NYC and Seattle - looks like I remembered incorrectly!
  • dman 8y ago
    Maybe they are shutting down by geography?
    • amaterasu 8y ago
      Looks like 3 cities, https://www.fastcompany.com/40571483/munchery-is-shutting-down-in-three-cities-and-cutting-staff https://www.fastcompany.com/40571483/munchery-is-shutting-do...
• stratigos 8y ago
  youve released some great talent into the world. munchery developers are some of the best ive worked with :)
• robjan 8y ago
  One thing that I don't understand is why the Social Team are still posting food porn even after this message. Have they not been informed yet?
  • i386 8y ago
    Scheduled tweets
  • coke12 8y ago
    They're probably using this: https://hootsuite.com/platform/scheduling https://hootsuite.com/platform/scheduling
    • Kye 8y ago
      They're using Twitter Media Studio according to the app tag in TweetDeck. https://media.twitter.com/en_us/articles/products/2018/media-studio.html https://media.twitter.com/en_us/articles/products/2018/media...
  • kkarakk 8y ago
    automated zombie bot is still paid, automated zombie bot does at it is told
• alangpierce 8y ago
  My office has been using them for years for dinner orders, sad to see them go. We used to use Sprig and Munchery (anyone staying for dinner gets to pick), but then Sprig shut down, so we moved to a choice between Munchery and a group Caviar order. Realistically, Munchery hasn't been as popular: we've had maybe 1-5 people order Munchery and 5-15 people order Caviar each day, but it was nice to have the extra options. One notable downside to Munchery compared with others was that the food is cold and you need to heat it up yourself. Now with Muchery gone, I guess we'll try to find some alternative. Definitely sounds like a tough market.
  • solveit 8y ago
    I presume Caviar is a company and your office isn't munching on gourmet food every day?
    • scurvy 8y ago
      It's a service owned/run by Square (https://www.trycaviar.com https://www.trycaviar.com)
      • gnicholas 8y ago
        Wow did not know they were owned by Square! Only knew they took over OrderAhead, which I liked, and tacked on lots of fees. They have a service fee, delivery fee, and driver tip as separate line items.
  • jasonkester 8y ago
    Can we take a step back and talk about the management, scheduling, and boundary issues that are resulting in your needing to order dinner at your workplace, seemingly every single night? Sounds like something must have gone seriously off the rails over there.
    • kkarakk 8y ago
      how else are you going to feed a group of people in a big city? e,having people make their own food is irritating(and can't be included in "perks"), having a staff kitchen/canteen is a cost center. how would you do it better?
• bluejellybean 8y ago
  This is a sad announcement for a service I didn't even know existed. Over the last few months my schedule has gotten extremely busy and I haven't had time to do any of my normal cooking. I've been just grabbing fast food and putting on more weight than I would like. Toying with the idea of hiring a personal chef along with a nutritionist to plan/prepare meals, I was hoping to have a high quality meal served within seconds of walking in the door. Basically eliminate the stress of dinner and poor diet. I seriously wish I would have heard of this service as it solves my problem in a vastly less expensive way. So yeah, sorry to hear of the closure and I wish everyone over there the best of luck on future projects.
  • deleted 8y ago
    [deleted]
  • seibelj 8y ago
    I don't know where you live, but most places there are healthier options for takeout (like salad). A personal chef is much more expensive than you think.
    • xfitm3 8y ago
      I’ve hired a chef to do meal prep, it’s not that expensive and the food was fantastic.
      • seibelj 8y ago
        A personal chef to come to your house is much more expensive than a takeout salad. I would love to see a link to such a service that is affordable.
      • richardking 8y ago
        hmm i’ve thought about this but thought it would be way too expensive. any more details on how you did this? what area do you live in? how much approx was it? you let them in your house in the afternoon and they cook and have it ready for when you go home?
      • 8y ago
• twblalock 8y ago
  It's time that companies who put food in a box and mail it to peoples' houses stop claiming to be tech companies. They are just food delivery companies who happen to have websites. Like all other food delivery companies and restaurants, they are in a cutthroat low-margin business and a few bad months can kill their company. They have no moat because anyone else can also deliver food.
  • fipple 8y ago
    The meal kit companies do have fundamental operating advantages which have yet to translate into a massively successful business. By offering customers only a limited choice of meals, they are supposed to achieve huge economies of scale. The problem is that perishables delivery cancels all of these out and then some. This business will be won by operators with local infrastructure and no delivery... like selling meal kits at grocery stores, or prepared meals for family dinners at office cafeterias.
    • cft 8y ago
      Economies of scale means that the more customers you have, the cheaper it is to offer the service per customer. In this case, the cost basically remains the same, no matter how many customers you have.
      • fipple 8y ago
        I know what economies of scale are. When you are buying and prepping 100,000 of the same meal at once it is much cheaper than prepping 100,000 different meals.
  • manigandham 8y ago
    Technically, there is no such thing as a tech company. They are all selling something, usually software directly or better software-powered versions of existing industries. Amazon is retail, AWS is IT, Google/Facebook are ad networks, Microsoft/Apple is hardware and software, etc.
• pbreit 8y ago
  TechCrunch on the shutdown: https://techcrunch.com/2019/01/21/munchery-shuts-down/ https://techcrunch.com/2019/01/21/munchery-shuts-down/ The meal delivery companies all seemed to expand too fast. There were no economies of scale to be had by geographical expansion. These companies needed to absolutely nail one or two big metros before even thinking about expansion.
  • dang 8y ago
    Ok, we've added that URL. Thanks!
  • pfranz 8y ago
    I didn't realize that the name recognition was so regional in this space. I remember traveling internationally years ago and looking at Yelp for recommendations. After reading a few reviews and seeing what restaurants had the highest ratings I could tell that it was mostly used by tourists, not by locals. I know for restaurants the real money is made by expanding and sharing the suppliers, management, advertising, but for something like a delivery app I'm not sure what the benefit of growing quickly is if you have competition outside of being first to (that local) market.
  • LoSboccacc 8y ago
    > nail one or two big metros is there any that tried instead to partner with some existing catering company to leverage their off time instead of building everything from scratch? seems to me building your whole cooking chain is quite inefficient
  • beaconstudios 8y ago
    LeanLunch are doing this well in Leeds, UK. But I don't think they're backed by absurd amounts of VC cash (and pressure) either.
• shay_ker 8y ago
  It seems like they just did too much. GrubHub, UberEats, DoorDash are all significantly difficult without the cost of making food at scale. I'm impressed that they raised the amount of money they did. The most interesting work in the food delivery space, IMO, are companies that want to bring the Deliveroo model to the US: - https://www.cloudkitchens.com/ https://www.cloudkitchens.com/ (aka City Storage Systems) - https://2ndkitchen.com/ https://2ndkitchen.com/ It'll be really interesting to watch this space evolve. I wonder if prices will drop in the long run without sacrificing quality (I'm hopeful, but my rational side says otherwise)
  • atombender 8y ago
    Isn't Deliveroo's model exactly the same as that of GrubHub/Seamless, DoorDash, Postmates, Caviar, etc.? In Europe, there's also Just Eat and Foodora in the same space. Deliveroo has started expanding to use local kitchens (that have no physical restaurant where diners can go), though you'll also find examples of those on GrubHub/Seamless.
    • shay_ker 8y ago
      > Deliveroo has started expanding to use local kitchens (that have no physical restaurant where diners can go), though you'll also find examples of those on GrubHub/Seamless. Not nearly to the same scale as GrubHub. Deliveroo's prep kitchens (called RooBox or Deliveroo Editions) are a lot more ubiquitous. Additionally, Deliveroo actually provides & helps prep kitchens, whereas GrubHub is fairly hands-off when it comes to whether a restaurant has a retail location or is delivery-only. Their ability to provide prep kitchens works twofold: 1) Help drive down cost, and, more importantly, 2) Gets more restaurants on Deliveroo to drive sales. This is also a perfect touchpoint to sell all sorts of things a restaurant would want: packaging, point of sale, marketing materials: https://restaurants.deliveroo.com/en-gb/ https://restaurants.deliveroo.com/en-gb/ The fundamental difference is that GrubHub & UberEats are (mostly) just delivery. Deliveroo is full vertical integration. I would not be surprised if they start impacting & controlling supply chains soon.
      • 8y ago
• dawhizkid 8y ago
  With more actual restaurants delivering through Postmates/Door Dash/Uber Eats there are just a lot more options available from known restaurants. At a similar price point, I would rather order from a restaurant that I either have already ordered from or that has good reviews vs a non-restaurant food delivery service that I don't know anything about.
• smohnot 8y ago
  On demand food delivery has several major problems that were all very predictable 1) you can't predict how much food to make. On demand food companies were throwing away 30% of the food they made every night drivers cost ~$25 an hour, and only do ~6 drop offs. 2) lots of idle driver time 3) routes can't be optimized (or only minor optimizations in real-time) 4) on average they are only dropping off 1.3 meals per delivery, making each meal very expensive to deliver I helped start http://Thistle.co http://Thistle.co (only in California) to fix these problems; people order their meals for the week (doesn't work for everyone obviously) and we drop off 3x/week, with optimal routes and many more meals per dropoff. The company has been really capital efficient in doing so, hardly raising any money but doing 10s of millions in revenues.
  • qhqgwoihqw 8y ago
    All accurate and great points. To add a couple more: - Limited meal customization. Want to order an item minus the mushrooms? Too bad, since the meals are prepped ahead of time. - Limited inventory throughout the city. Have you ever not been able to order your favorite dish off Postmates because it was sold out? On demand apps have this problem every night. Source: Worked for an on demand food delivery company.
  • abalone 8y ago
    > On demand food delivery has several major problems that were all very predictable Hold on now, Domino’s is doing just fine. On a tear actually.[1] [1] https://www.fool.com/investing/2018/07/19/dominos-pizza-extends-its-growth-streak.aspx https://www.fool.com/investing/2018/07/19/dominos-pizza-exte...
    • stochastic_monk 8y ago
      It’s different when the food is standardized and limited in scope. It also helps that they have corresponding brick-and-mortar stores.
      • drankula3 8y ago
        They are also a nationally recognized band, increasing the perception of legitimacy.
• mzmusic 8y ago
  Interesting that on the SAME day I received an email from the Dept of Public Health re: my complaint re: Munchery's food handling standards, Munchery announces that they're closing--immediately. It's a shame that, what once was a really good food delivery service, Munchery lost its 'successful charm'. The DPH stepped in because I complained that our meals were delivered way after scheduled time and they were NOT under refrigeration. Unfortunately, my meal contained raw tune which eventually led to serious food poisoning. After that incident, I didn't trust Munchery and never ordered from them again. Munchery began to overload their drivers with far too many orders which made deliveries late. This indicates a lack of sound infrastructure, greed, and a lack of concern for their hard-working drivers, as well as the customers who are receiving meals that are going to make them sick.
  • inferiorhuman 8y ago
    I've used Munchery a handful of times back when they were prominently featuring local chefs. The sushi was always done by these two guys and it was always mediocre. The only other problems I've had came up later and were: they've shifted the menu to exclusively bland recipes by the Munchery kitchen and the delivery became unpredictable.
• Smushman 8y ago
  There goes my $500 gift certificate... Any suggestions on how I can recover that, or have it returned to the initial buyer?!
  • regulation_d 8y ago
    In certain states, money used to purchase a gift card is required to be held in escrow, which would be held separately in receivership. Definitely worth asking about.
  • bobbyobee 8y ago
    Just to add to the others -- if the initial buyer paid with PayPal, they could have up to 180 days from the date of purchase to initiate a Significantly Not As Described (SNAD) claim.
  • tschwimmer 8y ago
    You are very likely to be out the money. The bankruptcy proceedings will determine how giftcard owners are compensated. Hard to say if it will be favorable, but I suspect they may be even less senior than unsecured debt (or they may be categorized as unsecured debt). Consult an attorney, but it may not be worth their time.
  • ThrustVectoring 8y ago
    Ask the initial buyer to file a chargeback if it was purchased via credit card. At least in the US, there's good protections that way for preventing folks from owing money for goods and services they didn't receive.
    • brianpgordon 8y ago
      But they did receive the gift card. Why should the payment processor assume the risk that, possibly years later, someone doesn't honor the gift card?
      • ThrustVectoring 8y ago
        They're not assuming the risk, the merchant bank is. And the merchant bank should be mitigating that via holding back a portion of credit card receipts from companies for the specific purpose of honoring chargeback demands.
• brianbreslin 8y ago
  This is unfortunate. I would hope we see a postmortem to get a better understanding of what went wrong. This information could be incredibly valuable to other founders working on similar challenges.
  • fmajid 8y ago
    The business model of losing money on every sale, but making up for it with volume, turned out to be unsustainable, who knew? It was nice to get VC-subsidized dinners while it lasted.
    • exogeny 8y ago
      It's amazing to me how few companies get this, and even more amazing that they ever find funding, much less multiple rounds.
    • brianbreslin 8y ago
      my questions though are like: how much scale do you need to make it not a money loser? how do you rationalize the loss-leading? has any company ever broken past that threshold? (i'm guessing uber ?)
  • manigandham 8y ago
    There's no mystery. This is just not a viable business model as known for 20 years now from the first dot-com bust. The economics haven't changed meaningfully since then for there to be another serious attempt.
  • throwaway786786 8y ago
    >>I would hope we see a postmortem to get a better understanding of what went wrong. High level -- FOMO lead mediocre VCs to take OPM (LPs reaching for yield) and spray and pray. Bros who went to Stanford gave other Bros who went to Stanford $100M+ because of connections, because what do you have to lose?
• eindiran 8y ago
  For people who might be like me and not know what Munchery is: https://munchery.com/ https://munchery.com/ Curiously, no mention of shutting down on their site that I could see.
  • kposehn 8y ago
    Yeah, this was the weird part. I couldn’t find any mention, just this.
    • moonka 8y ago
      It looks like maybe they are pivoting to a blue apron style boxed meal delivery? Before they would deliver premade food (like restaurant delivery). You could order from a different menu each day as you wanted it. I used it a few times in the beginning. Slowly portions became smaller and more expensive, and the menu became very repetitive so I stopped using them in favor of restaurant delivery. I actually didn't realize they stopped doing business in Seattle last May until I saw this announcement and started looking around.
      • skinnymuch 8y ago
        Is that what you are seeing on your end? A pivot to a Blue Apron like meal kit? For me it seems to be a prepped food delivery service still. Blue Apron is flailing like crazy - down 80% or so since IPO less than two years ago. And the IPO itself was double digit percentage lower than it was supposed to be in the first place. Can’t imagine how you would jump into the meal kit niche these days.
        • moonka 8y ago
          >Is that what you are seeing on your end? A pivot to a Blue Apron like meal kit? For me it seems to be a prepped food delivery service still. Interesting, for me it's showing "The Plaid Box", a weekly subscription box.
          • 8y ago
• masonic 8y ago
  (deleted)
  • drblue 8y ago
    That article is from May of last year. (I also just got the email that OP quoted.)
    • masonic 8y ago
      I did check their own site first. The lack of indication of problems misdirected me. They even have job postings still up.
• JAdamMoore 8y ago
  Never heard of them. Probably would have tried their service if I had. Epic failure of marketing, I guess.
• twic 8y ago
  > Founded in 2010, the San Francisco-based business had raised a total of $125 million in venture capital funding, reaching a valuation of $300 million with an $87 million round in 2015, according to PitchBook. Munchery was backed by Greycroft, ACME Ventures (formerly known as Sherpa Capital), Menlo Ventures, e.Ventures, Cota Capital, M13 and more. I would absolutely love to hear some of these VCs rationales for investing.
  • randomacct3847 8y ago
    Basically FOMO at a time when everyone wanted to invest in Uber for X.
  • exogeny 8y ago
    It will never happen. I've long thought that in the same way that DDG is a viable alternative to Google on a critical front (privacy), it's viable for an enterprising young VC to carve out a market based on radical transparency of both their wins and their losses. Doing so however would be the equivalent of airing dirty laundry; there's a lot of people out there who don't want you to know how the sausage is made (FOMO, very little due diligence, etc.), and they likely won't want to get a reputation for calling out founders for their failure, lest their dealflow dry up. I happen to believe however that the positives of being radically transparent and being notable for that very feature would outweigh that perception. Doesn't appear many VCs agree with me so far.
  • manigandham 8y ago
    Portfolio theory. VC is not about in-depth rational understanding, it’s about getting into as many deals as possible. Due diligence costs too much.
    • tomhoward 8y ago
      They do due diligence to ensure what the founders are pitching is based in reality - i.e., current sales and growth figures, unit economics, industry data, general trends. But they know they can't accurately predict the future so they don't spend much time trying to do that.
• x0x0 8y ago
  Edit: I read a stale link. My bad. --- I live in the bay area, have ordered over 200 times with Munchery, and haven't gotten any shutdown email. All meals are shown as sold-out through Friday. Normally you can order up until 2pm the day of.
• randomacct3847 8y ago
  I’m waiting for a “book the cook” food delivery service where I can ask a chef to cook whatever, get a quote, pay for it and have it delivered.
• lordnacho 8y ago
  As someone who grew up in a restaurant, this seems crazy to me. This appears to be a restaurant that tries to make every kind of meal, and deliver it. "Restauranteur" might well be the second oldest profession. There should be dozens of people in everyone's network who could tell you how the business works. The Everything Delivery is also a business model that most people in the business could critique. A friend of mine runs a very popular sushi chain in central London. It works, but only because everything is highly controlled. They know exactly how much fish people are going to want, and they know when. They know where to deliver to as well. Having all this knowledge means they are able to cut that fine line between the minimum cost and the revenue.
• ricardobeat 8y ago
  I'd really, really like to see a breakdown of expenses for the company's operating lifetime. In my mind this amount of funding should let you build functional nationwide delivery infrastructure, not only three cities, maybe open 100+ locations; but I'm likely wrong and would love to see how. My first guess would be most of it is burned on marketing and software development (?).
  • notyourday 8y ago
    They overpaid for: salaries No one in the restaurant business makes the salaries that restaurant logistics companies pay.
• Mtinie 8y ago
  Does anyone have a rough idea what proportion of expenses Munchery spent on? * marketing and promotional costs * management overhead and office expenses Perhaps I’m naive, but looking at their fundraising history, $125M in investment should have been more than adequate to cover launch and build-out costs, considering their core food supply costs would have been covered by actual customers’ order fees. Is this another example of scaling prematurely and hoping you can recoup all of the massive promotional expenses you’ve employed once you have major regional markets under your thumb? Generally expensive corporate office space rates in the Bay Area, Los Angeles, Seattle, and New York don’t often help, either. Edit: Added clarification of questions.
• rchaud 8y ago
  $125 million raised, and they only cover the Bay Area, the most competitive market for this kind of service? Is there even $126m of value in delivering food in an area with a population of 7 million?
• Balgair 8y ago
  Word is that all the 'employees'(1099ers) found out this morning. In somewhat understandable angst, they've cleaned the place over, bringing in trucks to take all the now un-used heaters, ovens, and all the soon to be spoiled food. Rent is due in 10 days afterall. So, if you are in the market for some industrial grade kitchen supplies, now is the time to act on that impulse!
• evoheyax 8y ago
  As a driver and biker myself, Munchery had a great culture. We worked really well together as a team to complete challenging routes in heavy traffic, and 3 months of the year are rainy, which complicates everything. I think 30% is low. I’ve seen 100+ lobsters, 100+ steaks, 200+ salmon, and more in a single night. It was very frequent, no one who worked there paid much for food since you could live on the Munchery diet as we called it. Every Wednesday, Thursday and Friday (and Sunday at one point too) were big giveaway days. At least 2000 meals per week were given away. Best side job ever. But I said this years ago when I started, “how can they keep giving away this much food?”. I was told it was never a profitiable buisness and it was kept alive by investors. They did pad the tip pool, especially around the holidays. But typical pay was between $20-$25 an hour with tip, $15 without tip. It was less but it’s always been minuniun wage for SF. The one thing the food did do was keep everyone very happy and loyal to the company. Most have been there for 5+ years, a few since near the beginning. I never understood why they missed the mark so much in predicting the amount of food. The last few weeks, they have been making less food, letting items sell out. My biggest complaint is I didn’t even get notification ahead of time. In the middle of the shift, they shutdown and told us we’re being laid off. Everyone is scrambling to find new jobs as no one is getting paid anymore and no one knew it was coming this quickly, we all thought at least another 6-8 months. Even a 2 week notice would have been nice. I found it very disrespectful to just close one day with no notice to your employees that this is coming.
  • zizhouwang 8y ago
    Wow that's a lot of food waste! Was upper management really disconnected with the kitchen staff and delivery drivers? They must have known burning through that much cash and wasting food is incredibly wasteful and unsustainable right? I'm really having a hard time getting my head around why management simply didn't just tighten the belt buckle... Also assume you were paid by the hour? How many deliveries would you typically do since traffic is so terrible around the times they deliver?