It all started with a cookie. A cookie made with pea protein, to be exact.
When Pod Foods co-founders Larissa Russell and Fiona Lee started their pea flour cookie company, they assumed the toughest challenge would be developing the perfect recipe. Instead — and despite a vocal demand for their sweets from the local Bay Area community — they struggled to get their product onto retail shelves.
These frustrations prompted them to pivot from the world of cookie-making and start Pod Foods, a two-way, B2B software platform which aims to take the hurdles out of the wholesale-food distribution business.
Consumer trends show a growing demand for local food, but it’s difficult for local cottage food producers to get their goods into stores. Using distributors can be costly, and also requires makers to churn out tons of product, all of which must be shelf stable.
Meanwhile, selling directly to stores is also expensive and involves navigating the murky waters of marketing, pricing, and distribution with no assistance, an especially tricky task for those without business backgrounds or retail connections.
Based in San Francisco, Pod Foods aims to facilitate the wholesale process by connecting vendors wanting to carry local products with small cottage foods producers, helping both sides manage the ordering, fulfillment, and payment processes.
“Usually, small producers just have to keep their vendor relationships and commitments in their head, or else use a Google spreadsheet,” Russell told the Spoon. With a Pod Foods membership, both producers and vendors get access to a personalized analytics dashboard (accessed via Pod Foods’ website) both parties can use to manage things like ordering, delivery, and inventory.
On the producer side, the dashboard lets food entrepreneurs track which stores are selling their products and if any items need a price adjustment. They can also list their goods on the Pod Foods platform to get discovered by nearby retailers.
Vendors, on the other end, can use the dashboard to track how their products are selling and source new local foods. So if a customer comes in and requests a particular type of kombucha they’ve seen at a farmers market, the store manager can easily find the supplier and order the product.
Pod foods offers three plan levels for stores: Standard (free with a 6 percent service fee and $500 order minimum), Select ($195/month with a 3 percent service fee and no minimum), and a Premium custom plan. These prices aren’t nothing, especially for small businesses and retailers, but according to Russell, they’re worth it: “We save grocery stores a lot of operational costs associated with ordering from local vendors, and we save vendors a lot of headache and money associated with major distributors including marketing fees, data fees and more.”
Pod Foods currently works with around 200 emerging food brands and 20 vendors, from mom-and-pop shops all the way up to bigger retailers. Russell said that smaller shops use artisanal, locally made products — like small-batch cold brew or an addictive margarita mix — to draw customers away from bigger, cheaper grocery chains. “Stores want to source these local products,” she said. “But it’s expensive to find producers, and they don’t know how to seek them out. We offer that discovery ability.”
But Pod Foods doesn’t only cater to corner stores and bodegas. Russell told me that they’re in talks with larger grocery chains.
You might be wondering how a small, local producer could keep up with the level of demand from a grocery giant. “With our platform, products can manage their own inventory and level of visibility, stock numbers, etc. They’ll be matched with stores that they can support,” Russell assured me. So if a small artisan sausage maker did get picked up by Albertsons, they might start by supplying just one location, then widen the distribution network to more stores if and when they increase production.
Cottage food production is a risky business. Companies can fail if they scale up too quickly, don’t have the right margins, or don’t know how to effectively market their product. Some incubators, like Pilotworks and Commonwealth Kitchen, offer mentorship and help small producers to get their goods into retail and dining establishments. But Pod Foods would be a helpful service for food entrepreneurs who already have their production on lock and just need help managing their distribution — or for those who want to take more control of their marketing efforts and pricing strategies.
Russell told me that Pod Foods raised a pre-seed round in December through Unshackled Ventures and Hustle Fund in the Bay Area, with participation from a few angel investors. As of now, they work almost exclusively with companies in the San Francisco area.
“For vendors, it’s about growing their business,” she said. “For buyers, it’s a way to get products that people want.” Maybe someday they’ll even bring back those pea protein cookies.