5.6% of the population is Asian American; 3.2% Middle Eastern; 17% various Hispanic and Latino ethnicities. That’s about 81 million people of non-European descent--what we are calling ethnic--representing a market size of $65 - $100 billion annually in the US.
Ethnic food is important to these ethnic communities. Even though people of various backgrounds are taking food out or eating in restaurants from time-to-time, they still enjoy the comfort of cooking the foods they grew up eating at home. But ethnic grocery stores are few and far between, making ethnic food inaccessible and hard to procure for many customers. The market is being ignored by the big players in both the grocery store and grocery delivery spaces.
For the ethnic community, ethnic food is more than just food. It is not just comfort food, or a connection to home, but also part of an identity.
With a friendly, empathetic, and responsive customer service team that understands the cultural nuances and is prompt in responding to orders and delivery issues.
Our customers are spreading the word about Fretch. Because we are bootstrapped, all our growth has come organically through word of mouth and user recommendations. We have delivered over 25,000 orders to 5,000 unique customers and are currently operating at a $1.1 million annual revenue run rate. Although grocery is considered a ‘volume business’ as economies of scale come into play, we have had a laser focus on profitability since day one, and as a result we are currently month-over-month cash flow positive.
We’ve experienced positive quarter-over-quarter growth since 2015 and are on track for substantial growth in 2019.
We constantly seek feedback, and listen closely to our customers no matter what they have to say. We pride ourselves in a perfect 5 star rating on Facebook and Google. Some of our reviews:
We have over 5,000 unique customers. 1,378 of them have placed at least 5 orders with us, and 183 of them have placed at least 25 orders! When a customer places an order with Fretch for the first time, there is an over 70% chance s/he will place another order with us, without any present marketing effort!
We are in the business of delivering ethnic groceries to ethnic communities in major metropolitan areas like New York, and we are committed to making Fretch the go-to grocery delivery service for such communities through a unique combination of speed, convenience, variety, savings, transparency and an overall superior shopping experience.
Our current cost of acquisition of a customer is $10.50 and the average order size in $80. The current lifetime value of our customers is $225 (on gross profit over a one year time period).
Total retail and food services sales in the U.S. in 2017 were around $5.5 trillion, and grocery store sales specifically totaled $641 billion.
And if 25% of the U.S. population identifies as part of an ethnic community--that is about 81 million people. Here’s the breakdown:
Assuming 50% interest and utilization, the ethnic grocery market size can be estimated to be about 10-15% of the U.S. grocery store sales ($641 B) or about $65 billion-$100 billion annually in the US.
Our primary competitors are Amazon Fresh, Freshdirect, Peapod, and other ethnic retail outlets. But our sheer variety of offerings within a particular ethnic niche makes us the comprehensive go-to service for the grocery requirements of that ethnic group. Most ethnic community-specific retail outlets, on the other hand, do not have a nimble, local delivery system in place and are severely limited in reach. We’re really out on our own when it comes to offering online orders and delivery in the ethnic grocery space.
Furthermore, our consistent focus on maintaining high product quality, packaging, and a world-class customer experience, coupled with investments in setting up business and technology processes to enable a seamless loop of orders, fulfillment and feedback puts us in a very serious position to capture a big piece of this lucrative pie.
Fretch started with the Founder’s personal funds and savings of about $200K. Loans were taken from friends and family along the way that have now been completely paid off.
We 100% bootstrapped, and are now profitable with a healthy growth trend. That said, we want to expand faster, and spend more on growth, technology and marketing, for which we’re looking for funding that will further fuel our next growth spurt (see roadmap below).
We are in talks with a few high profile angel investors, but primarily, it’s all right here at Republic.
Within the last year, our focus has been to perfect our business model and the internal processes, and most importantly, to establish profitability within the model. Having achieved sustained profitability and established benchmarks for various internal processes from inventory management to staff management to product quality management, we are now at a point where we are primed to grow exponentially. The business model, the processes, and the financial numbers can support this growth.
Our focus now is to invest in user acquisition, customer retention, and E-Commerce technology to materialize the growth.
We envision the next phase of the company to replicate the business model that we have built so far to expand into other ethnicities and geographies within the US.
The Fretch team has just the right experience for what we’re doing:
And most of all, we not only share a love of food, but we also have a deep understanding of the problem experienced personally, and by friends and family.
Let’s celebrate the diversity of our great country with one of its most important cultural ingredients - food! Get in on the ground floor while you still can!
The smallest investment amount that Fretch is accepting.
Fretch needs to reach their minimum funding goal before
the deadline. If they don’t, all investments will be refunded.
The Crowd SAFE is an agreement for future equity in the startup,
meaning that it can convert to equity in the future.
The Crowd SAFE is an agreement for future equity in the startup, meaning that it can convert to equity in the future.
$25,000 – $1,070,000
Fretch needs to raise
before the deadline. The maximum amount Fretch is willing
to raise is $1.07M.
We are using Republic's Crowd SAFE security. Learn how this translates into a return on investment here.
Naresh: Hi, my name is Naresh.
Yogi: Hi, I'm Yogi.
Naresh: We run a company called Fretch. When we moved to Manhattan in New York, we realized that getting our groceries was an absolute chore. Unlike regular mainstream groceries, ethnic grocery stores are few and far in between. It was a long trip back and forth and it's harder to procure and which is why it you know something that kind of affected us or bothered us.
Yogi: The passion that he had behind Fretch is what drew me closer and wanted me to go ahead and be part of Fretch and just grow and expand.
Naresh: It's a common problem that we set out to solve. A problem that we've seen in many other families throughout in Manhattan, New York and I'm sure many other places as well. Fetch and fresh. We fetch fresh groceries for you.
Tim Draper: Welcome to meet the Drapers. Give us your pitch.
Naresh: Sure, my name is Naresh.
Yogi: And I'm Yogi.
Naresh: We run a company called Fretch out in New York. Fretch focuses on ethnic groceries depending on which ethnicity you look at, it's about 10% to 15% of the US population, so you could estimate the overall market size to be between 65 and 100 billion dollars annually.
Yogi: Grocery delivery has really become such a hot market, so it's attracting a lot of new businesses and a lot of new ideas but despite all this, we feel that ethnic communities are being overlooked and underserved. It's so hard to get ethnic groceries.
Naresh: For example, when I moved to Manhattan, New York, my wife and I would have to take a 45 minute trip one way to get our groceries. It was an absolute chore and there were no delivery options, so it basically started from my personal pain point, that we started Fretch and we knew at least 10 other south Asian families who had the same exact problem and that's how Fretch started. It started from the back of my car to now where we are which is at 20,000 orders delivered, were at a one million dollar revenue run rate annually. We've been incessant about our quality, about customer service, about the overall customer experience, that we feel that now our product is mature and there are customers absolutely love us for it.
Tim Draper: I don't quite get why this is going to be better than Uber eats or DoorDash. Do we need another delivery service?
Naresh: Are there any of them that focus on ethnic?
Tim Draper: No, they don't focus but you can certainly get it.
Naresh: The way they make money is by buying from retail at retail prices and the way they make money is by adding a mark-up on top of the retail price. They're paying you know a higher price on basic groceries. We don't do that. We have a set up where we buy directly from distributors. We have savings and we pass the saving onto the customer. You might have an aisle you know in a big supermarket but the basics and the staples you still have to go to an ethnic store.
Yogi: What they mainly do is their whole job is just to pick up and deliver. They don't understand the backdrop and the importance of ethnic groceries. Now, in Indian there's like 20 different brands of rice, so to get that service we offer all that. That's something that Amazon Fresh doesn't offer, Walmart doesn't offer. We're not just a delivery company, we're a customer service company. That's our main focus.
Anousheh Ansari: What is special about your customer service?
Naresh: We are very responsive. We give a no questions asked refund policy. People love us for it. Not just in terms of how we respond or how we deal with customers but we treat them like family.
Yogi: Lot of these customers give us feedback that we actually use and use their input to grow. We're like hey we should try this, we should try this, hey, why not try this and we take all that into account and to establish where we are now.
Bill Draper: On the million dollars of revenue, are you profitable?
Naresh: Yes, we are profitable. When we started out we had a very similar model where we were buying from retail stores and we were making money just by adding markup and it wasn't really going anywhere and so we decided we had to change something, so we modified the business model, we set up a warehouse, we have distributors that we work with and we introduced profitability in the system because of that and now we feel we're at a point where we've worked hard on the internal processes, on our supply chain, on our logistics ...
Tim Draper: You know Anousheh spent a 11 days on the space station and I'm wondering if you have had any deliveries up there currently they are very short of fresh food.
Anousheh Ansari: And also, your taste bud changes so you like spicy food so some really spicy ethnic food they would probably...
Naresh: It's probably out of our delivery network right now but we ...
Tim Draper: Are you only delivering in New York?
Naresh: Only in New York right now.
Yogi: For now, yeah.
Polly Draper: Who are your customers?
Naresh: We started with only south Asian but the plan is to include other ethnicities also on the platform, so we intend to use whatever we've learnt and experienced so far and basically leveraging existing infrastructure.
Polly Draper: It seems like you are you have the easiest time procuring this stuff because there is so many ethnicities who are also close together you get stuff from Chinatown or you go up it's not as if it would be as hard in New York as it would be somewhere else.
Naresh: It is absolutely. Even here we understand the problem and the solution immediately. No one's really doing it.
Tim Draper: I'm still concerned about competition, so there is Instacart or Goodeggs I believe that they are buying wholesale and then bringing them in. I don't think they are going out to the big supermarkets, so the ethnic thing could just be a feature.
Naresh: They are trying to compete with you know the Walmart's and Amazons of the world but the ethnic population as I mentioned is about 10 to 15% of the US population.
Tim Draper: What does this look like in 10 years?
Naresh: The dynamics going to be that we have set up in major metro areas, be it you know The Bay Area, be it New York, be it Chicago. You have big chunks of ethnic populations in all of these, so right now we're in New York. There is a big Greek population out in Astoria and Long Island city and so that's our next target that we are trying to go for.
Yogi: We perfected our infrastructure for South Asian groceries. Now the only thing that needs to be changed is to add other ethnicities and expand from there, so we are scalable within the next couple of years.
Anousheh Ansari: Do you ship or do you deliver?
Yogi: We locally deliver.
Anousheh Ansari: So, you actually, physically someone ... You actually maintain a fleet for delivery or you contract with like an Uber?
Naresh: We contract with a delivery company and they provide drivers as and when they're needed, as many as we need.
Anousheh Ansari: If I order in the morning you deliver it in the afternoon?
Naresh: Same day yeah we can deliver it same day?
Tim Draper: What are your backgrounds?
Naresh: My background is more of corporate. I've worked for companies like Deloitte and McKenzie and City group and that really wasn't my calling, so about four years ago is when Fretch started and then so I knew this is where I had to be and this is where I end up.
Yogi: Yeah, and I come from a hospitality background. I was managing a hotel and from there I moved on to grocery, locally that serves ethnic grocery so I went onboard and realized the grocery base is huge and this is where I met Naresh as well so he had already started Fretch, he was still new, he was looking to see where to procure some of the distributing goods and that's where I reached out to him and then from there we built connection and a friendship and then from there that turned out into a business partnership.
Tim Draper: Terrific. Well, thank you for coming into meet the Drapers.
Yogi: My pleasure.
Tim Draper: Good job. Good luck. Alright.
Yogi: Appreciate it. Thank you so much.
Naresh: I believe everyone did understand the problem that we're trying to solve.
Yogi: Anybody can go onto Amazon fresh or any of these big companies and order a gallon of milk or apples and oranges right but not everybody can easily order special type of Basmati rice, special type of produce that we have, the spices and the lentils all these things are not easily available. When it feels like hey, I want a chicken tikka masala, yeah that's not one thing that's in there. There's tens or twenties of different masalas that go into one dish and we have all those masalas available, so if you want to make chicken tikka masala at home, oh, it reminds me inside Tim was getting a little hungry ...
Naresh: Yeah, they were getting hungry. On hindsight I think we should have been more clear about the exact roadmap we want to follow about the next steps that we want to get to maybe specified the exact cities we want to get to or the ethnicities that we want to target.
Yogi: We need to show everybody not just the South Asian community, the Greek community, the Far-eastern community, everybody in between to say hey, ethnic groceries is something that we need and we needed easily.
Tim Draper: Let's see what the judges thought. Judges, what did you think of Fretch?
Anousheh Ansari: I think they're addressing a definite need in the market. I like the idea. I don't know how scalable it is when they want to go across geography and across ethnicity, how they can scale their model and stay profitable.
Bill Draper: That's a good point. I don't know how they can either. I think you put your finger on it. It may not scale the individual deliveries and getting the right kind of ...
Polly Draper: Because where their passion was South Asian food but what they have to do is get equally passionate people who ...
Bill Draper: Chinese food.
Polly Draper: Chinese and ...
Anousheh Ansari: They are very hands on everything was like they talk to their customers, there is a lot of personal delivery.
Tim Draper: That's a real positive that they are customer oriented are really good. My biggest concern is competition as I mentioned there. Amazon might just take over this business where you are going to get delivery of whatever you want by drones service, to your house. You're going to go, they're really nice guys who delivered that ethnic food to me but here I'm getting my curry you know just like that through Amazon. I'm worried about what the dynamic is later. I do like that they're almost to the point where they are farming the stuff that does add to their margins which is a really smart thing.
Bill Draper: I think it would make it but not very big. I don't think it will ever get, as you say, a really good multiple.
Tim Draper: But we all know it's an enormous market and it's growing but this maybe a niche part of it and do you think first to go to Fretch or do you think first go to Instacart or something else. Okay and now let's get the vibe.
Polly Draper: Let see.
Tim Draper: Okay, do you feel Fretch okay feeling not so Fretch. Okay so for Fretch are we up, down, all around boom. I'm at three quarters.
Polly Draper: I'm at half.
Tim Draper: I was the most ... oh dad's got a three quarters.
Bill Draper: I'm about the same way.
Tim Draper: You two are sideways and we were sort of three quarters. Interesting.
Polly Draper: That makes what? You are the math guy. That's is one and a half.
Tim Draper: It's a total of one up. Now you the viewer can go ahead and decide, thumbs up, thumbs down or you can invest.
Bill Draper: Or at least you can order from Fretch.
Tim Draper: Or you can order from Fretch. Go ahead you can invest go to meetthedrapers.com and give it a shot.
Polly Draper: Yes.
Tim Draper: Stay tuned you are going to see one of these amazing bitcoin blockchain interviews, it's coming up right now.
Speaker 16: If you were to design currency today, it would not look like paper.
Speaker 17: Live long and blockchain.
Speaker 16: Three words fund the revolution.
Good company with a great outlookHardeep DhamiInvested 3 months ago
Sounds like it will be a good investment.Darrell LassiterInvested 3 months ago
It is hard to find time to go to a Indian grocery store and in places like NYC where parking is a huge concern, it is hard to carry all those heavy bags. This is a huge help for me and I believe there is a great potential in this business.Rajeswari JayakumarInvested 3 months ago
I believe they have created a great service and I expect a number of individuals will latch on to the beauty of their offerings.Sumeet BatraInvested 2 months ago
I invested because I have used Fretch before and liked the service.Akshay NagpalInvested 2 months ago
I invested because I see great potential future in this business.Ajay MulchandaniInvested about 2 months ago
I must expand my portfolio and build my empire.Charles Brown JrInvested about 2 months ago
Fretch made life easy for every Indian.Praveen Reddy ElmatiInvested about 2 months ago
I invested because I know this company bnb is going to touch the sky..God BlessMini bhallaInvested about 2 months ago
Food delivery, fresh ingredients, and creative alternatives that are easily prepared represent the future of meals at home. Fretch can scale good service to customers like me.Juleyka Lantigua-WilliamsInvested about 2 months ago
Love their customer service. Packing and deliver is extremely professional and timely.Vishal SumaniInvested about 1 month ago
FrETCH is a brilliant initiative from the founders to simplify, and modernise (ethnic) grocery shopping catering to the South East Asian community local to the New York City area.Advait HingeInvested about 1 month ago
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