When Hatchery first launched in 2013, it brought artisanal products (think: fun stuff, like jams and jellies) to foodies interested in discovering new things. For $20 a month, a customer can receive a tasting box shipment that includes samples from small-scale brands across the country.
The startup billed itself as the "Birchbox of Food."
Now, the "tasting box" business is moving beyond that model by launching a web platform where customers can purchase their favorite items in bulk. Hatchery launched the marketplace in July 2014, with just 100 brand partners; many of them are small businesses and food makers based in California and New York. (Of course, folks can still sign up for the monthly tasting subscriptions.)
Today, Hatchery announced the expansion of its marketplace to include 300 brands, as well as new browsing features. Users can now shop by dietary preferences, like 'gluten-free' or 'dairy-free.'
Max Friedman, who founded the company, says he changed the web design to include more company write-ups -- or, "flavor profiles," as he prefers to call them -- where users can learn more about the background of a product or its maker. "We got a lot of web traffic to the profiles, and there's a lot of interest around sharing those stories on social media," he says.
This rings particularly true on Instagram, where Hatchery now has over 42,000 followers. Friedman adds that the image-sharing social media platform became a powerful marketing tool for the business, as users began sharing photos of their meals with friends and family.
For reference, Plated, a competing startup founded in 2012, counts a comparable 67,3000 followers on Instagram. The N.Y.-based food delivery service raised $35 million in a recent funding round.
It's worth noting, however, that Hatchery is very different from its competitors (Plated, Blue Apron). The startup aims to support independent food brands, whose growth would otherwise be stymied by their limited access to customers. "A lot of small businesses give up too soon, because they can't go forward," Friedman explains. Lacking the proper distribution, it's difficult for foodies to expand beyond a local client base -- and especially if the product sells at stereotypically "artisanal" price points.
Since the marketplace's beta launch, Friedman has brought on new editorial staffers to write the maker profiles. Hatchery is still a scrappy startup of just 9 full-time employees.
Other new hires include resident chefs who put potential food brands through a rigorous vetting process. They must have a "very clean label," says Friedman, with items made from organic ingredients that don't contain additives or preservatives. Each product is carefully selected and must go through about three rounds of taste testing.
As the co-founder and former owner of a branding agency, Friedman adds that getting onto the shelves of high-end grocery chains, like Whole Foods or Dean & DeLuca, shouldn't necessarily be the endgame for such brands.
"Small businesses don't realize that getting the products off of the shelves is even more difficult," he says. When those items are sitting next to bigger brands -- with significantly bigger funds to spend on marketing -- it's almost impossible to compete.
To bring in its own (undisclosed) revenues, Hatchery purchases products at whole sale prices, and then retails them at a lower cost. "The more volume we drive in sales, that covers our operational expenses," Friedman says. One such expense for Hatchery is the shipping and logistics for brand partners, as well as insurance and liability costs.
Companies say they've benefited greatly by partnering with Hatchery. Seattle-based duo Bryan Mitchiner and Justin Hoffman are the co-founders of Mustard and Co., a small gourmet mustard brand that had a product price point of $7. They typically sell through local outlets such as Leschi Market or Macrina Bakery. Hoffman manufactures the mustard himself out of a small Seattle factory.
Last year, the business did just shy of $100,000 in sales, and projects doing double that figure in 2015. That's a far cry from the early stages, when the two made individual deliveries to Seattle homes themselves.
Mitchiner attributes that uptick to the visibility the company gained through the Hatchery partnership. "It's one of those things where it's hard to nail down, but I tend to ask people how they heard about us, and a handful of people said they received us in the tasting box," he says. Mustard and Co. will be among the 300 brands available for retail through the Hatchery marketplace, starting today.
While Friedman declined to disclose revenues, he says Hatchery has done more than 50,000 tasting box shipments to date. (At $20 a shipment, that would put sales from the subscription-portion of the business at an estimated $1 million since 2013.)
He admits that supporting unproven artisans on a national level is risky. Even so, he's adamant that "it's the way retail should be done."