Founder Spotlight: Matt Wadiak, Founder and CEO of Cooks Venture, Co-Founder of Blue Apron
Matt is the founder and CEO of Cooks Venture. Matt's goal is nothing short of building a food system for the future, changing industrial agriculture and creating a regenerative system to reverse climate change while providing consumers with food choices that are exceptional in both quality and taste.
Prior to Cooks Venture, Matt founded and served as the COO of Blue Apron, a trailblazing meal kit company that re-imagined the way that food is produced, distributed and prepared for home chefs. Matt developed and managed Blue Apron's supply chain, leading a team of 5,000 manufacturing employees at 6 national centers and built a network of over 250 farmers, ranchers and others.
He served on the board of Goodwill International, one of the largest NGOs in the world, which works to educate and develop better employment around the country through a diverse workforce development and social programs. Welcome, Matt!
I've shared a little bit about you, but introduce yourself and tell us a little bit about how Cooks Venture got started and the mission behind it.
Well, it's kind of funny. When a new business sort of emerges out of nowhere, there's always a long story behind it. Like many companies, the story goes back to when I was a young cook and went to culinary school, moved out to California, started working in great restaurants. I actually did an internship in Italy, and I have grandparents that live north of Milan, and worked there. What really shocked me going over to Europe and working as a young cook in my early twenties in Europe was that the quality of food was so high for such a low cost, and that generally speaking, the access to great ingredients and great food in a lot of parts of the world is far superior to what we have access to here.
The funny story is, when I came back to the States and I was cooking in all of these restaurants in San Francisco, Chicago, New York, cooking for people and preparing a meal for like $100-$200 a plate back then, which was relatively expensive, seemed to me to be a sort of a paradigm that didn't make sense and didn't check out in terms of how food supply chain worked globally and access to quality ingredients that were grown with the consideration to the anthropology of the local culture. Accessibility of great ingredients was an issue.
That translated into a lot of my work throughout the years and how I worked with farmers and how I worked with other food entrepreneurs and my consulting business and eventually Blue Apron and now Cooks Venture. One of the things that I learned throughout many years of working with farmers was that even though you can make change in the vegetable space, growing better crop rotations for things like lettuce and tomatoes and carrots and celery and different families of vegetables, 97% of America's agriculture are row crops, things like corn, soy, wheat, oats. If you really want to change the way that food is accessed and grown in America, you have to change the majority of the agricultural system.
The biggest consumer of agricultural row crops in our country, our nation's biggest category of crops outside of cattle are actually chickens. Chickens consume 9% of America's corn, a huge amount of landmass. It affects millions and millions of acres. We're at a point where the industrialized food system has generated an economy that subsidizes feed for animals through things like tax dollars, ethanol and feeding cattle off of huge amounts of row crops when they should be eating grass on permanent pasture.
Fundamentally, when I was out there looking at supply chain and what I can do and how I can be impactful in my post Blue Apron days, the way to create better food access for people and the way to change supply chain, and the way to create better jobs for farmers in a better food economy while also working in regenerative systems, which basically means sequestering greenhouse gases and carbon into soil, so fighting climate change, is to grow chicken. Chicken is a conduit for those things. The problem with chicken, fundamentally, is that nobody really grows slow growing pasture raised chickens in our country. I learned that there's only two genetics companies in the entire world, which are owned by Tyson, that grow all essentially the same breed of bird.
I met this guy Blake Evans, who had been a generational poultry guy, about five years ago, and we partnered up. He had sold his company and we bought it back. It's the only independent genetics breeding company in the world. We partnered together to build this incredible slow growing chicken that is better for the land, better for the food supply chain and consumes grain. All of our grain we contract grows in a regenerative system to sequester carbon and put it back in the soil. It took them 10 years to put this breed together. That was sort of the foundation of Cooks Venture and how we got there, but it really did start 10 years ago in starting to identify problems with supply chain and problems with how farmers are making a living sort of on the dinner plate, and then worked up from there. This was sort of the unsolvable problem. It's the last key to the puzzle. We thought that we had a social responsibility to get out there and try to do something about it.
Yeah, that makes a lot of sense in terms of the impact that it has on the world. For individual consumers, when they're in a grocery store or out looking at different types of meat, what's really the benefit for the consumers eating or purchasing something that's pasture raised versus something that's not?
Well, the one thing that I'll say is that unfortunately there is not a good definition for pasture raised in our country. You really have to do a little bit of digging to understand what that might mean because you could say pasture raised on certain kinds of meats, chicken, pork, beef, and it wouldn't meet what I would qualify as pasture raised. The USDA standard for that doesn't meet my definition. I don't know if you've seen the new movie Super Size Me 2, but they show what free range means. It's essentially like one square foot of space outdoors for an animal in a conventional livestock facility.
Pasture raised is really important, but what's more important is pasture raised done right. Beyond that, the food has to taste good, right? I'm a cook by trade. I was a chef for many years. When you treat animals well and you have the right breed of animals, that's what makes you a farmer. That's what makes food tastes good. It's the same thing with our breed of chicken. Our breed is called the Pioneer. It's evolved from a heritage line of chickens that actually go outside, and because our animals have better health and we actually open our doors to the outdoors, they go out by the thousands and thousands every day. I would say as a consumer, know what your food is, know where your food is coming from.
You can actually look, there's a poultry inspection number on a USDA label on the front of every package of meat, or a USDA inspection number in the case of pork and beef. Take a picture of that and Google it when you get home and find out where that food comes from, because a lot of times what people don't realize is that food can be white labeled and produced by one of these really big industrial manufacturing food companies. You might think you're getting something that you're not. Do a little research. It's worth knowing what you're putting in your body.
Yeah, absolutely. You've been involved in the journey of Blue Apron, which has been completely disruptive to the way that really busy folks live, so you have a lot of time and experience in E-commerce. What innovations or changes do you foresee in the space within the next few years?
Well, that's a really great question. It's fascinating because shoppers still have a connection with going to the grocery store and the interaction with going to a bricks and mortar establishment. However, I think that you see in Generation Y and Z, the paradigm really changing as people become less attached to bricks and mortar in their daily lives and more attached to their phones and their devices. I don't think that retail will die completely, but I do think that when you think about retail hubs in the future, they're going to increasingly become pick and pack centers, unless large retailers that have huge swaths of geography convert to local hubs where they're able to quickly fulfill orders. Starting in the next few years here, I mean, I think we've already seen some of the change happening with local delivery companies.
It's sort of evolve or die. We certainly saw that demand at Blue Apron. I think that demand is just increasing. Over the next few years, retailers are starting to build their stores with pick facilities. There's good reason for it too. When you look at the efficiency imprint, the COGs, cost of goods associated with a grocery store, you have essentially what is a very efficient warehouse that's meant to keep food cold and people warm. The most efficient way to distribute food to a big population of Americans or people worldwide is to build refrigerated centers or temperature controlled centers where you're only picking what you need and then efficiently putting all of that food in parcels in an aggregated system and then delivering along a highly efficient route, as opposed to a single person taking their SUV to the grocery store buying some milk and eggs and maybe some greens or something and then driving all the way home.
The evolution of the system will change for a few reasons, for the shopper because that's where the shopper is going, and also for the margin affiliated with grocery. There's a myth out there, and I want to dispel this, and I'm going to just keep saying this over and over and over, that the margin affiliated with grocery is a poor margin, and that it's not a good high margin business. Grocery can be an excellent business in terms of variable margin. The problem is infrastructure. Creating lean systems of distribution is what will help good retailers in the future receive multiples on revenue as opposed to percentages of EBITDA in the future and how their companies are looked at and evaluated. Driving that efficiency and driving that customer base is what will create that, but also lean economics and lean systems in food distribution. Also, direct sourcing of food is important for how we think about food in the future and how people will interact with their phones to buy that food.
Yeah, that makes a lot of sense. We're already seeing the early days of much of that, it feels like. In the local Whole Foods that I go to, it seems like 50% of the people who are there are Prime Now pack and deliverers. We're even seeing checkout cashier-less technology starting in early days, but starting to get tested on a wider scale. You were involved in 2012 on an early venture called Blue Apron, pick packing your first 30 orders yourself in a commercial kitchen in Long Island City. Scaling that demand, what are the biggest lessons that you learned along the way and where were the challenges that you saw along the way?
Every day is a challenge. I mean, we went from distributing those first couple dozen boxes to, within a few years, in the neighborhood of over 100,000 boxes a week. I don't even know where to begin. It's all about, I think, identifying what problems are and seeing in your head, knowing where you want to go but not knowing how to get there is a little nerve wracking, identifying really great operations people to partner with, understanding how automation can help, how packing technology can help. You have to remember that it's almost commonplace now that food is packaged and delivered locally to individuals. You just said that half the orders at your local Whole Foods are picked up in Prime Now boxes. None of that existed when we started the box, the insulation, the how to keep it cold, the temperature testing, the little bottles, the tiny bags. All of the engineering that went into packing the food to keep it fresh in those containers didn't exist.
In addition to that, the environmental studies associated with that, which now we know as a fact because they've been independently analyzed by a number of different sources, are more efficient and less wasteful than shopping at a grocery store because of the aggregation and use of materials that are used prolifically in grocery stores. None of that existed and we had to figure it out. I guess the learning along the way is that there is no challenge that is not surmountable, and that when you take things in steps and work quickly, you can accomplish pretty much anything. The world is going to be evolving at that kind of pace moving forward in the food sector.
Look, every other technology, every other sector from mining to pharmaceuticals to other areas of e-commerce have evolved dramatically over the course of the last 10 to 15 years. Food is really lagging in that category. I think staple industries that support our civilization, our sort of anthropology as Americans, are slower to change because they're such necessities. There are embedded people in supply chain that have been doing it for so long the same way, but that will no longer exist in the coming years as we see the consumer demand for faster, better food delivered to their door increase exponentially. What happened with us at Blue Apron is going to happen across the whole supply chain. We're talking about a trillion dollar market that's still up for grabs and nobody's really taken the cake yet.
Yeah, that's absolutely right. The consumer drive over the course of the past couple of years on just transparency on what you're putting into your body and what you're purchasing feels like it's been more under a microscope as of late. You said that a lot of that infrastructure that you're talking about in terms of delivery didn't exist. I quickly did a Google search and I realized Blue Apron founded the same year that UberX launched, which very early days in much of the infrastructure that's used for delivery now. What's in store for Cooks Venture as you grow? You recently secured 12 million in funding. How is that going to drive growth?
Well, a few different ways. I think you hit the nail on the head when you said that consumers are looking for more transparency. All of the research about shoppers suggests that categories involving higher transparency in food will become more important in the coming years. Some of the green- washing that I was talking about earlier, labeling things as, quote unquote, organic or free range or farm sourced or natural, I think some of those claims are going to have to hold up to more scrutiny as time goes on.
What we're really looking to do is create more transparency in our supply chain, starting with what we think is the hardest nut to crack, and then proving that, publishing real data and white papers about how we do that and the science behind that, and then moving on to other items in the value chain, other meats and eventually produce and foods. Our goal in the long run is to be a large e-commerce retailer that can deliver great food to people's houses with diverse ingredients, not in the form of a meal kit.
We're not necessarily interested in giving people 40,000 SKUs. I just don't believe fundamentally that consumers need to choose between 500 different kinds of rice. I think that our goal is to give people the best of what we can find and then deliver it to them at a cost that they can afford, much in the way that I was implying earlier when I was talking about my experience as a young cook. How do you create really great foods that are affordable to everybody in America? How do you limit your SKUs to create efficiency in supply chain and deliver those goods in an efficient pick and pack system?
You said Cooks Venture will be an eCommerce site where consumers can just get really great products at a really fair price. How do you think about your different channels? We've seen Beyond an Impossible kind of started out and seating high end restaurants. They've gone to mainstream restaurants. Now they're starting to get into a wholesale business. How do you think about those different avenues and channels for cooks in the future?
I think that building a diversified funnel for revenue is important. Being solely reliant on a subscription based or e-commerce model isn't necessarily our goal. I think that it's also limiting, especially in the early days, in the frontier days of the ecomm food industry. I would consider us to be really more of an ag tech company at this point than an eCommerce company. You talked about Monterey Bay Aquarium and why they were great earlier and how they make complicated things simple. It's because they have really great scientists and they use that science to drive a paradigm and educate consumers through transparency and choices.
In that same vein, we have incredible geneticists and agro- ecologists and agronomists who work for us. When you can provide that science along with an option to buy something better, that really drives the consumerism. Whether that's coming from a B2B relationship or a direct to consumer relationship, it doesn't really matter. There's obviously different revenue thresholds associated with those different channels, but having a really solid base of B2B makes a whole lot of sense. Then not having to worry about cost of acquisition on every customer as your sole source of revenue can create a healthy business because you can optimize your CAC on ... For people who don't know what that means, that just means how many dollars you spend to acquire a customer. You can optimize it on the right kinds of customers and really drive the high margin business because your base is already covered.
I think that future platforms will be smart about how they do business. Look at Amazon as a model. What's their base? You have Amazon Web Services, you have Amazon retail services, then you have Amazon Fresh. You have all of these different channels. I think that new, smart businesses that want to be successful need to drive multi-channel revenue streams and build big funnels.
Yeah, that's absolutely right. So many businesses now are seeing rising customer acquisition costs through digital marketing that they're really looking at other channels in terms of being able to expose consumers, educate consumers, and really start building a longer term relationship with those customers versus the one time purchase of the CAC through potentially not a great fit for a longterm customer. We're in the customer service space, so a question that we always like to ask, what's your favorite customer story at any of the ventures that you've worked at?
It's an interesting question. We've had so many great customer service stories, obviously, at Blue Apron. We heard from people every single week. I'm getting the same kind of feedback at Cooks Venture with people cooking a meal with their family for the first time. For me, cooking at home is really what defines our anthropology as a nation. The choices that we make as consumers of food impact us not only in the moment but in generations to come.
Just for those who weren't listening before the podcast, we were talking and you were showing me some pictures from your meal last night and I showed you some pictures from my meal last night. That defines who we are as people. We're going to look back at that and our families are going to look back at that sometime in the future, or maybe our grandkids or whomever will have those memories. Much in the same vein that I have that experience working in Italy and cooking with my family and how nations built their culinary anthropology, we're figuring that out everyday as Americans, how we cook, how we interact with our food, and then how that translates into how we interact with our farmers.
Outside of like all of the great customer stories that we have, my customers are my vendors. Working with a farm and seeing a farm convert from a conventional growing system to an organic system for the first time, and seeing the impact on that farm and seeing that family's life change and develop a better economy and seeing life in an enterprise that formerly was struggling economically and had difficulty finding a market. Interacting with our farmers and interacting with the people that supply us, to me, is my greatest customer story and how we can change the food landscape in America and how we can develop a better farming system to serve us as Americans in building a better food anthropology.
Cooks Venture is founded on the well-documented scientific principle that sequestering 1% more carbon in the soil on agricultural lands can reverse climate change. Matt, thanks so much for joining us. To learn more, checkout CooksVenture.com.