The CQ | Great Food Doesn’t Scale…Until it Does: Wonder’s Big Swing at Reshaping the Restaurant and Delivery Model
Plus the Forerunner Team's Top Ten Reads of the Week
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By Kirsten Green, Founder and Managing Partner
This past week, Eater published a deep dive on our portfolio company Wonder, which is a fundamentally new model for great food at scale that’s helmed by the incomparable Marc Lore (formerly the Founder/CEO of Jet.com, which was acquired by Walmart, and Diapers.com, which was acquired by Amazon).
Using technology to scale great food is an unrealized pursuit our industry has danced around for many years. Delivery services (DoorDash, Uber Eats, Postmates, etc.) have become massive businesses because of the sheer demand, even though they are plagued by high consumer fees and, often, contentious relationships with restaurants who pay meaningful cuts for these services that can be disruptive to their core operations. Not to mention, most restaurant food is not optimized to travel and can look and taste less than desirable when it arrives at your door.
On the other hand, platforms that have attempted to vertically integrate and own the entire culinary operation have ultimately been unable to overcome the tough unit economics paired with the challenges of a highly sensitive production process. After all, food is arguably the most personal, subjective product that consumers pay for on a daily basis. The margin of error is severe.
Perhaps it takes someone as uniquely ambitious and visionary as Marc to take a swing at reimagining the restaurant and delivery model on a cellular level. Wonder's initial entry point is both very powerful and differentiated: a highly efficient platform for producing and distributing excellent meals, where chefs get to indulge the creative process and see their creations scale in ways they never thought possible.
As Eater notes:
“It’s tempting to lump Wonder into the space of ghost kitchen or delivery-only concepts that have come and gone since before the pandemic, but its partner chefs say this business is different. It’s the same selling point as the early days of delivery app Caviar, when it offered a premium product — takeout from higher-end restaurants — in a marketplace that’s otherwise about unlimited options, not curation.”
Here’s a snapshot of how Wonder works today:
It partners with popular chefs and restaurants from across the country to produce recipes (or even create new exclusive concepts specifically for Wonder’s model).
Alongside the chefs, Wonder’s team works painstakingly to develop and refine a menu down to the microgram of each recipe (quite literally, a millionth of a gram) to ensure creations are not just expertly balanced but completely repeatable at scale.
All items are designed to be prepared quickly using only a rapid-cook oven, a water bath, or a fryer. This enables Wonder tremendous efficiency: its kitchens can be as small as 750 square feet, with each location serving food from up to 30 restaurant concepts (indeed, everyone can order whatever they’d like).
A customer can opt for pick-up or delivery from one of Wonder’s 11 (and very soon to be 14) locations and choose from a seared salmon by Bobby Flay, samosas from Chef Meherwan Irani, a Sushi Nichi rainbow roll, Di Fara Pizza, a poke bowl, or paella by José Andrés.
Delivery is fulfilled by a mix of employees and third-party couriers to deliver within a tight radius, and the company’s recent acquisition of Relay will mean even more capacity for fulfilling orders quickly and affordably.
Wonder is still relatively early on its journey in the context of what it’s out to achieve. But if there were ever a signal of its positioning for success, it's the enthusiasm of critically acclaimed chefs, who have built and bet their entire careers on maintaining the excellence of their products for consumers.
Chef JJ Johnson, an up and coming name in New York’s culinary scene, notes, “I was shocked they got it to be that good. It’s going to be very successful, because they’ve done the groundwork. It’s something I talk to Bobby Flay about all the time. He’s like, ‘I wish I had a Marc Lore at your age.’”
Over time, Wonder’s proprietary format can expand beyond chef-prepared food halls into adjacent concepts that get the best quality meals into people’s homes. But for now, if you’re in New York or New Jersey, check out a Wonder near you: https://wonder.com/
What We’re Talking About on Slack:
Welcome to pricing hell: add-on fees, previously bundled items now sold separately, and charging different prices to different people at different times. The Wendy’s backlash brought dynamic pricing to the forefront, even though it’s been used for a while, namely by the airline industry and Amazon, reports The Atlantic. “The closer we get to personalized pricing, the more we inhabit a world in which everything in life is like paying for beer at the Super Bowl: Everything’s at your maximum willingness to pay.”
The hidden costs of homeownership are skyrocketing. According to a 2022 analysis by Fannie Mae, property taxes, maintenance, utilities and insurance makes up more than half of homeowners overall costs. And everything just keeps rising. The average property tax for U.S. single-family homes was $4,062 in 2023, up 4.1% from 2022. Home maintenance fees averaged $6,663 a year in the fourth quarter of 2023, up 8.3% from 2022. The average annual home insurance cost rose roughly 20% between 2021 and 2023 to $2,377—and another 6% increase is predicted in 2024. Almost 1 in 5 home owners said they couldn’t afford a $500 emergency repair without going into credit-card debt, and 42% said they’ve skipped home repairs or maintenance because they were too expensive.
The Economist sheds light on the rise of the remote husband, prevalent in well-educated, affluent communities. While women head off to work, their husbands stay home and log on to their jobs. A lot of this has to do with the fact that men and women tend to gravitate towards different occupations. More men are in coding, technology, engineering, and business industries, which commonly offer more opportunities for remote work, while more women are in the teaching and nursing fields, which can’t be done remotely. A McKinsey survey discovered that 38% of working men had the option to work remotely full-time, compared with 30% of women. About half of women say they are unable to work remotely at all, while only 39% of men say the same.
Welcome to the Golden Age of User Hostility: The Atlantic breaks down the ways companies are failing consumers these days—from smart TVs that collect your data then force targeted ads to inkjet printers that can be shut down remotely if you try to modify them. “The loss of meaningful ownership over our devices, combined with the general degradation of products we use every day, creates a generally bad mood for consumers, one that has started to radiate beyond the digital realm…In some areas, it means that quality goes down in service of higher margins; in others, it feels like being forced to expect and accept that whatever can be monetized will be, regardless of whether the consumer experience suffers.”
U.S. retail sales top forecasts as consumers keep fueling growth. New data from the Commerce Department showed that the value of retail purchases, unadjusted for inflation, rose 0.7% from February. “Consumers remain conscious of high interest rates but growing income continues to support their daily consumption. March’s retail data means consumption heading into 2Q will be stronger than we initially expected — suggesting the gradual slowdown in consumption we expected this year may be further delayed.”
The U.S. economy is expected to keep powering higher, with one economist saying, “We’re truly the envy of the world.” The Wall Street Journal’s most recent survey revealed that business and academic economists lowered the chances of a recession within the next year to 29% from January’s projection of 39%. “We think the American economy has entered a virtuous cycle where strong productivity results in growth above the long-term trend, inflation between 2% and 2.5% and an unemployment rate between 3.5% and 4%.”
Ready for a chatbot version of your favorite Instagram influencers? Meta is testing a program called “Creator A.I.,” which would allow influencers with large followings to use AI to interact with fans on Instagram and decrease their workload. “Some creators have been hesitant about automating their interactions with their followers, saying it could put words in their mouth that they don’t agree with. Others have balked that a chatbot could replicate the substance of their interactions with fans. Still, there is some precedent for the program — a number of creators already rely on outside agencies and tools to help respond to messages they receive across their Instagram and Facebook accounts.
The big new way to get rich: target bored young men who want to get rich. In recent years, gambling has become normalized in the U.S. in large part due to young men embracing tech-driven sports betting, online gambling, crypto, and trading apps trying to make money. In 2023, Americans bet $119.84 billion on sports, up from $93 billion the year before. “Maybe 40 years ago, a 28-year-old had a mortgage and a family to support. Now he can direct disposable income toward whichever stock he just saw recommended on Reddit or bet on whether the next pitch in a baseball game will be a ball or a strike.”
‘Carefluencers’ are helping older loved ones, and posting about it. A growing number of people who are taking care of an aging family member are sharing the daily realities—managing meds, driving to appointments, cooking meals, tending to bed sores—on social media. While some find the posts exploitative, several carefluencers have thousands, even millions, of followers.
The dumbphone boom is real, reports The New Yorker. As more people look for an escape from their smartphones, a cottage industry of dumbphones—that is, phones minus all the features that make smartphones addictive, like social media or streaming, a high-res screen, and video camera—is brewing. Interestingly, the people who are starting these “digital minimalism” businesses selling dumbphones are in their 20s, and many customers are Gen Z’ers and their parents concerned about the mental health effects of social media.
Portfolio Highlights:
Tally Health’s CEO Melanie Goldey speaks to Forbes about wellness, aging, and beauty sleep.
The Wall Street Journal highlights the ease of using a subscription lawn care service, including Sunday among their picks.
Forbes Entrepreneurial CMO 50 list recognizes Vineet Mehra, Chime’s chief marketing officer, and Brad Hiranaga, Cotopaxi’s chief brand officier.
Allure, Page Six, Marie Claire, and Coveteur detailed Caitlin Clark’s Glossier look, which included the newly launched Invisible Shield SPF 50 Sunscreen, at the WNBA Draft.