The founder of restaurant food ingredient company Natoora, Franco Fubini, explains how his company pivoted from B2B to B2C during the pandemic.
We spoke to Franco for the Courier podcast. Listen above or read the story below.
How have recent months been for Natoora?
We're present in a number of regions, so we had the benefit of foresight. Seeing what was happening in Milan led us to think very quickly that the situation wasn't going to be great for restaurants. And given that 60% of our revenue globally comes from restaurants, it was obviously a big concern for us. That was the first indicator. And then on the 11th of March, we took the decision as an executive team to repurpose our app and open it up to the retail consumer. That led us on the path of this pivot that we've taken.
It seems thousands of people have signed up to get food delivered to their home using Natoora.
Yeah, it's been incredible. Much better than we expected. We obviously had a number in mind, but ultimately now we're at 50,000+ customers in both London and New York that have accounts on our app. We have had to increase capacity in both London and New York. So, we've recruited over 15 people in London and about six people here in New York to cope with capacity. Ultimately, our revenues are now above budget. All the revenue is not 100% coming from home delivery, but home delivery has helped us recover the vast majority of the revenue to the point where we're over budget in both markets. In Paris, we took the decision to leave it dormant because of the government help there.
What are the biggest challenges right now to deliver ingredients from a farm to somebody's urban home?
It's mostly technological. Fortunately, we have our own tech team, and I think the investment that we've made over the years in building our own systems has paid off in a moment like this. The big challenge is not so much in the supply chain, but it's actually in utilising an app that's been developed for chefs and how we enable consumers to use that. There are a lot of quirks that are very chef-driven. The fact that you've got a basket that is live and you don't need to click on a button that says ‘place order’, or the fact that you don't have a delivery slot and so forth. The real challenge in getting good food out to consumers has been ensuring that the service becomes more and more retail-friendly as the weeks go by.
It begs the question, if this is such a lucrative and interesting model, why didn't you do this before?
It's a very good question! Someone else was asking me the same thing here at the office. I guess, you know, we started out as a home delivery business 15 years ago in London, and then we shut that part of our business about four years ago. It's a very difficult business to compete in. The future is very much about retaining this part of our business. I think that we're much more mature – we have a brand now that was in a very different place back in the day when we were doing home deliveries in London.
As to whether it's going to be lucrative, it's something we're actively working on to better understand our economic model. We have some experience, but we really need to understand our economic model. There are questions around delivery and the density of deliveries or how fast we can do deliveries once traffic resumes into the big cities. We really need to take the next month or two to nail down our economic model, make sure that it's viable for us, and that if we do retain it, which is what our intention is, we do so in a way that's sustainable for the business.