Retail

Thrive Market Stays Competitive In Grocery Segment

photo by thrive market

Eating unhealthy food has a host of downsides: It shortens people’s lives, saps their energy and puts them at greater risk for things like heart disease and diabetes. Unfortunately, for our collective waist lines, junk food is cheap in terms of actual monetary expense. The price per calorie of fresh produce is much higher than that of potato chips, and that price differential gets more notable the fresher and healthier the product is. Whole Foods was colloquially called “Whole Paycheck” for a reason — eating organic comes with a very high price tag.

As important as the literal costs in dollars and cents, eating fresh foods is also “expensive” when it comes to time. These foods often aren’t prepared foods, which means that customers who are committed to clean eating must go to the store once or twice a week — not to mention all of the preparation time it takes to turn ingredients into edibles.

One might assume Americans’ main source of junk food is served up at a drive through window, but the grocery store is a more likely destination for the average shopper to try to scratch their junk food itch, according to Medical Daily. At grocery stores it becomes much easier for customers to dip into the shelves of prepared foods and leave their more ambitious organic cooking projects to the side.

Thrive Market looks to solve that problem by taking the trip to the grocery store out of the equation and keeping consumers in a constant stream of organic and all-natural foods that are delivered directly to their doors. In an attempt to stand out from the big ticket price work of organic grocery, Thrive is looking to undercut the grocery store when it comes to pricing. Thrive’s goal is to keep their prices at wholesale levels — 25 percent to 50 percent of the standard retail price for the foods and household goods it specializes in shipping to consumers. According to the firm, Thrive members pay back their membership fees in savings in about two orders.

Thrive members get their first month free, and, after that, membership costs $5 a month — around $60 per year. That fee gives consumers “unlimited access to the healthiest foods and brands that aren’t always available in grocery stores.”

Thrive wants to make organic eating broadly available, noting that it offers free memberships for low-income families, teachers or students for every paid membership. That offer is particularly important, especially in low-income areas where things like full-service grocery stores and farmer’s markets are few and far between and where food deserts begin to occur.

Those consumers end up doing their food shopping at local convenience stores, which means diets often have a lack of fresh, healthy foods and are more expensive than their healthier counterparts, because the retail mark-ups are so much higher.  Grocery stores may be having price wars to woo consumers, but for those outside the easy range of a grocery store, convenience store prices remain incredibly high.

Despite their drive toward altruism, Thrive faces a tough market, particularly in the era of Amazon-owned Whole Foods, which is rapidly expanding its grocery delivery program — a free benefit for Prime Members.

As the going has gotten tough, the Thrive team has gotten going, and upped the level of its operations game with a five-year deal with KeHe Distributors.

“We believe this partnership enables us to fulfill our value proposition and will better serve our end consumer. After extensive evaluation, it was clear that KeHE’s collaborative approach and focus on execution within the supply chain will allow us to deliver against our mission and vision,” said John Winkels, senior vice president of supply chain at Thrive Market.

KeHe will provide Thrive with category insights, supply chain expertise and access to its wider array of products. That tie-in follows a strategic partnership with RangeMe, a platform designed to help retailers and suppliers find  new products. RangeMe’s dashboard puts thousands of products in front of buyers, with the intent of making it easier to find and compare products from across the globe.

“Typically, merchants are inundated with emails from brands asking for distribution, but RangeMe allows us to decide how and when to respond to incoming brand requests,” said Julie Johnston, senior vice president of merchandising and chief merchant at Thrive Market.

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