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Meal Kit Startup Just Add Cooking Ceases Operations

Just Add Cooking (JAC), the Boston-based meal kit company specializing in locally-sourced meals from the New England area, has ceased operations.

The news went out today via an email to customers from company founder Jan Leife. According to the email, the company had been in search of financing over the past few months and, not surprisingly, investor appetites for meal kit startups has soured in the wake of Chef’d’s sudden shut down and Blue Apron’s struggles.

From the email:

Over the past several months, we’ve been focused on finding a long term financing solution. As meal kit companies have shuttered and others have been bought by large companies, the market hasn’t played in our favor, and unfortunately we have not succeeded in finding a viable solution for long-term financing.

The effort to find funding included a Wefunder equity crowdfunding campaign less than a month ago to raise up to $300 thousand, but the effort fell far short with only $7.7 thousand in funds coming in. According to the Wefunder page, the company has taken in a total of $1.48 million from 32 investors over its five-year lifespan.

The news is yet another sign that startups are having trouble making the economics of meal kits work even while sales rise.  JAC saw its revenue grow 19% year over year, fueled in large part by sales of their meal kits in grocery store locations around New England. According to the company, overall revenue was on track to hit $1.9 million by the end of the year.

Based on the email, it’s not immediately clear if JAC will continue to look for a strategic option such as selling the company. We’ve reached out to Leife for a comment and will update this post when we hear more.

UPDATE 11/6/18: Jan Leife responded to our question about what’s next for Just Add Cooking with the following statement:

“Currently we are seeking a company who could continue to serve our customers or meet their needs in a different way.

In our six years of operation, we have built a community of thousands of loyal customers passionate about local food. A recipe database with hundreds of recipes that utilize local ingredients and are created with the financial and logistical restraints of meal kits in mind. We enjoy a strong brand recognition in New England and been awarded Best of Boston 2018 by Boston Magazine.”

Hat tip to Spoon reader Elina for the head’s up on this news.

The full email is below:

Dearest Customer,

As of today November 5th Just Add Cooking will be ceasing operations in Boston. We are so sorry to bring you this news, and want to explain why we have come to this decision.

We set out six years ago with a big idea about a new local food delivery service and an ambition to create a new food system in New England helping busy customers reclaim their kitchen. Since then, we’ve accomplished many things we’re incredibly proud of. We built a brand and a supply chain with many of the finest farms and food companies there are in the region. We’ve created hundreds of amazing and delicious recipes and we built some truly exceptional relationships with engaged and loyal customers such as you. Last but not least we manage to gather an exceptional group of people who made Just Add Cooking great, every week.

That said, Just Add Cooking today still has many challenges to overcome. Over the past several months, we’ve been focused on finding a long term financing solution.

As meal kit companies have shuttered and others have been bought by large companies, the market hasn’t played in our favor, and unfortunately we have not succeeded in finding a viable solution for long-term financing.

We wanted to close by thanking all of you one last time for ordering, for telling your friends to order, for rating us, and for telling us how we were doing. We hope you enjoyed the journey as much as we did.

Sincerely,
Jan Leife and the Just Add Cooking Team

Just Add Cooking Launches Crowdfunding Campaign for Hyper-Local Meal Kits

This week Just Add Cooking launched a WeFunder campaign with a $300,000 goal to raise money for their super-local meal kit delivery service.

Founded in 2013, Boston-based Just Add Cooking (JAC) focuses specifically on providing local food, which they believe will help them succeed in the cutthroat meal kit market. All meat and produce are sourced from the New England area, and all meal kits are packed and assembled in the region.

From their WeFunder page:

Just Add Cooking is different. We’re local and don’t intend to go national – by keeping our operations focused in the Northeast, we’re building a truly local food economy between our customers, farmers, and distributors.

They also hope to distinguish themselves from competitors by letting customers add local produce (eggs, lettuce, etc.) a la carte to their orders. Sort of like meal kit meets grocery fulfillment meets a local farmers market.

JAC is following the path of other meal kits, however, by diversifying from delivery-only into retail channels. To combat low customer retention and razor-thin margins, companies like Blue Apron, Home Chef, and others have shifted from a home delivery model and onto supermarket shelves. In May of this year, JAC started selling through retail channels; as of now, kits are available at 13 Roche Bros. grocery stores in the New England area.

Prices range from $9.50 to $14.25 per serving, depending on the number of people you’re feeding. That’s on the pricier end for meal kits. However, considering that the company uses organic, locally-sourced ingredients, the price isn’t too bad.

Previous to the WeFunder page, JAC had raised $850,000 from investors. If they meet their new goal, JAC plans to use the funds to develop a personalizable meal kit using “AI-driven technology.” We at the Spoon have referred to the fully customizable meal kit as the Holy Grail. In other words, by allowing customers to choose exactly what meals they want and when, a lot of the issues around meal kits (rigidity, dietary constraints, etc.) melt away.

Though JAC didn’t give many details on how they hope to achieve this elusive personalized meal kit, they will have an easier time of it than some of their competitors because of their size. By consolidating their ingredients, clients, and operations in the Northeast, JAC has room to be more flexible with logistics.

Of course, their emphasis on local is a double-edged sword: it also limits them. While the JAC website doesn’t state what percentage of the meal kit will actually come from local farms and fisheries, presumably they’re more of a slave to the seasons than other kits which source from far-reaching areas. Which means JAC customers probably won’t be able to get a juicy Caprese salad or Zucchini in the dead of winter.

The WeFunder page states that JAC will use the funds to expand their delivery beyond Boston to more cities in the Northeast. If they’re smart, however, they will stay relatively local and focus on securing loyalty and return purchases from their customer base. Down the road, though, they could potentially set up regional wings in other areas: JAC Southern California or Pacific Northwest, anyone?

JAC will also launch more meal plans crowdsourced from dietitians, chefs and food bloggers, ready-made options, and even kids’ lunches. It will be especially interesting to see how that last category plays out. Kids meal kits have been seeing a lot of churn lately, with quite a few companies folding around the same time Yummly raised $7 million.

It’s no secret that many independent meal kit services are struggling, especially those which rely heavily on delivery. Despite all the challenges they have to overcome — razor-thin margins, competition from food delivery, etc. — I think JAC may be one of the few meal kit services that actually makes it. By leveraging the popularity of local foods and targeting a regional customer base, they’ve got a sustainable approach in place. And if they can create a customizable meal kit that can scale appropriately and profitably (admittedly a tall order), they just might survive.