This is another in my ongoing series of posts spotlighting underrepresented communities around the world and the entrepreneurs trying to help them. In this installment, I talk to co-founders of a fast-growing startup trying to bring healthy food to millions of people in the U.S. who currently don't have access to it.
Most Americans have access to an abundance of healthy food, including fresh fruit, vegetables, and organic products. But despite the majority having this access, there are still millions who live in "food deserts." These are usually defined as rural areas far away from stores that carry fresh food and organic products, or urban areas in which residents have to travel more than a mile to shop at a traditional grocery store.
When you dig into the data on the health impacts of food deserts, you see that obesity and diabetes rates go up in areas with little access to healthy food options. According to U.S. Department of Agriculture data, communities with a higher percentage of lower income residents had more food deserts. They also saw an obesity rate of 32.6% and a diabetes rate of 12.2%. Meanwhile, communities with higher incomes had fewer food deserts. They had an obesity rate of 24.4% and a diabetes rate of 8.2%.
Reaching Through the Desert
One company looking to offer a solution to people living in food deserts is Thrive Market, a membership-based online marketplace with wholesale pricing on organic foods and other health-related products.
"Our mission is to make healthy living affordable and accessible to every American family. The way that we do it, is we take the wholesale buying club model that you'd find at a place like Costco, we bring it online, and charge an annual membership fee," says Nick Green, co-founder and co-CEO of Thrive Market.
Memberships for the site are $60 per year, but the company claims to offer "25-50% off retail." And with each paid membership, Thrive donates a free membership. This has allowed the business to reach more people, and quickly make progress on its mission.
"Less than two years into the business, we're already over 300,000 paid members on this site, we've given away over 300,000 gift members. We're doing over $200,000 of value in sales every single day, just in product sales, not even including the membership," says Green.
Inspired to Succeed
Thrive Market's mission comes from a deeply personal place for its other co-founder and co-CEO, Gunnar Lovelace.
"I grew up very poor with a single mom as Latino immigrants, and saw how hard my mom worked to make healthy choices. When my mother remarried, my stepfather was running a food co-op out of a hippy commune and organic farm in Ojai, California. I got to see firsthand, up close, the power of collaborative buying as a way to make food more affordable and build community," Lovelace explains.
The opportunity itself came after Lovelace began setting up wholesale accounts with brands that he would often use personally. Once friends heard that he had access to wholesale pricing, he started hosting shopping events on Facebook.
"It was so much time and energy, and there was such an obvious demand for that, so it was obvious that there was an opportunity to create a much more scalable platform to facilitate that type of access," says Lovelace.
Growing the Organic Business
There's little doubt that there's an increasing demand for organic food, as well as other organic products. Sales of organic products rose 11 percent from 2014 to 2015, reaching a record $43.3 billion in sales.
On top of increased sales of organic goods, consumers are buying more packaged goods online than ever before. Last year, online consumer packaged goods (CPG) sales increased 42 percent.
"We see a huge opportunity. There's no reason for a bag of granola to have to be bought in person, in a grocery store. We can cut out steps in the supply chain. We can get it to people more conveniently. We can get it to people at a lower price. We don't think that there's really any limit on how big this business can get," Green says.
One of the interesting aspects of the company is how it is dedicated to social advocacy in business. It recently started a petition for food stamps to be accepted online.
"It's absolutely crazy, in the 21st century, that someone who is on food stamps, and there's 40 million Americans who are, can go to the corner store and buy Cheetos and Coca-Cola with their food stamps, but they can't go online and buy healthy food," says Green.
With the right niche in a growing industry, Thrive has made it clear there may not be any limit to their growth. And fueled by its mission, Green and Lovelace are confident it's sustainable for the long term.