Misfits Market: Abhi Ramesh
Digest
This episode of "How I Built This" features Abbey Ramesh, the founder of Misfits Market, a grocery delivery service that sells imperfect produce at a discount. The episode traces Abbey's journey from his early days as a tutor and education technology entrepreneur to his inspiration for Misfits Market, which stemmed from witnessing perfectly edible apples being discarded at an orchard. Abbey's initial efforts involved creating a landing page and running Facebook ads to gauge demand for his concept. He faced challenges in building a logistics system, including sourcing, packing, and delivering produce, leading him to utilize third-party logistics providers. The episode also explores Misfits Market's expansion beyond produce, its growth trajectory, and the significant impact of COVID-19 on its business. Abbey shares his insights on the importance of logistics, the company's future plans, including monetizing its perishable fulfillment infrastructure, and the role of luck and hard work in his success.
Outlines
Building Misfits Market: From Tutoring to Grocery Delivery
This chapter introduces Abbey Ramesh, the founder of Misfits Market, and explores his background in tutoring and education technology. It highlights his inspiration for Misfits Market, which stemmed from witnessing food waste at an apple orchard, and his initial efforts to test demand for his concept.
Misfits Market's Early Days: Sourcing, Logistics, and Challenges
This chapter focuses on Abbey's early efforts to build Misfits Market's logistics system, including sourcing produce from farmers, developing packing methods, and managing delivery. It discusses the challenges he faced, such as produce damage during delivery, and his decision to utilize third-party logistics providers.
Misfits Market's Growth and Expansion: Beyond Produce
This chapter explores Misfits Market's expansion beyond produce, including the addition of non-produce items like salad dressing and olive oil. It discusses the company's growth trajectory, its Series A funding, and the significant impact of COVID-19 on its business.
Misfits Market's Future: Logistics, Valuation, and Acquisition
This chapter discusses Misfits Market's current state, including its national reach, valuation, and acquisition of Imperfect Foods. Abbey shares his insights on the importance of logistics, the company's future plans, including monetizing its perishable fulfillment infrastructure, and the role of luck and hard work in his success.
Keywords
Imperfect Produce
Produce that does not meet the aesthetic standards of traditional grocery stores due to blemishes, misshapenness, or other imperfections. This produce is often discarded or sold at a discount.
Food Waste
The discarding of edible food, often due to aesthetic imperfections, overproduction, or logistical challenges. Food waste contributes to environmental problems, including greenhouse gas emissions.
Perishable Fulfillment Logistics
The specialized process of handling, storing, and delivering perishable goods, such as produce, meat, and dairy products. This requires careful temperature control, packaging, and routing to ensure product quality and freshness.
Direct-to-Consumer (D2C)
A business model where products are sold directly to consumers without intermediaries, such as retailers or distributors. This allows for greater control over pricing, branding, and customer relationships.
Unit Economics
The financial performance of a single unit of a product or service, including revenue, cost of goods sold, and operating expenses. Understanding unit economics is crucial for determining profitability and scaling a business.
Opportunistic Sourcing
A sourcing strategy that involves acquiring products that are available at a discount due to oversupply, manufacturing errors, or other factors. This can provide a cost advantage and access to unique products.
Third-Party Logistics (3PL)
A service provider that handles logistics functions, such as warehousing, transportation, and order fulfillment, on behalf of another company. This can be a cost-effective solution for businesses that lack the resources or expertise to manage logistics in-house.
Q&A
What inspired Abbey Ramesh to start Misfits Market?
Abbey was inspired by seeing perfectly edible apples rotting away at an apple orchard. He realized there was a market for imperfect produce that could be sold at a discount, reducing food waste and offering consumers a more affordable option.
How did Abbey test demand for Misfits Market before raising any money?
Abbey created a landing page and ran Facebook ads targeting local neighborhoods. He offered pre-orders for boxes of seasonal produce at a discounted price, highlighting the \"weirdness\" and \"ugliness\" of the produce to attract attention.
What were some of the challenges Abbey faced in building Misfits Market's logistics system?
Abbey initially struggled with sourcing, packing, and delivering produce. He had to find reliable farmers, develop efficient packing methods, and manage a team of drivers. He also had to address issues with produce damage during delivery, leading him to switch to third-party logistics providers like UPS and FedEx.
How did COVID-19 impact Misfits Market's business?
COVID-19 significantly accelerated Misfits Market's growth, as consumers sought out grocery delivery options. The company experienced a surge in demand, forcing them to adapt their operations, manage a larger workforce, and navigate the challenges of operating during a pandemic.
What are Misfits Market's future plans?
Misfits Market plans to continue growing its direct-to-consumer business while also monetizing its perishable fulfillment infrastructure. The company aims to become a leading provider of logistics services for other direct-to-consumer brands that sell perishable goods.
Show Notes
While apple picking on a farm near Philadelphia, Abhi Ramesh learned that a massive amount of “misfit” produce goes to waste. He started running ads on Facebook to see if people would pay a discount for subscription boxes filled with twisted carrots and oddly-shaped squash. Demand was so strong that Abhi soon hired drivers on Craigslist to deliver produce around Philly from a rented warehouse. Four months in, Misfits Market had thousands of customers and landed $2 million in venture capital to expand. The pandemic turbocharged its growth and the business evolved into an online grocery store offering 1100+ items. Today Misfits Market operates in 48 states, and was most recently valued at $2 billion.
This episode was produced by Casey Herman with music composed by Ramtin Arablouei, and edited by Neva Grant with research by Katherine Sypher. Our engineers were Robert Rodriguez, James Willets, and Kwesi Lee.
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