Misfits Market, post-Imperfect Foods acquisition, is tackling online grocery challenges by focusing on sustainability and tackling food waste. COO Corey Farrell details their strategy of partnering with farms and brands to sell otherwise unsellable products, expanding private-label offerings with upcycled goods, and optimizing fulfillment to offer a more complete and seamless shopping experience. This episode offers valuable insights into scaling an e-commerce business in a challenging market while staying true to a mission-driven approach.
Key takeaways
Misfits Market differentiates itself by focusing on upcycling food waste into new private-label products, offering a novel revenue stream and reinforcing its sustainability mission.
Scale is paramount in the online grocery business; Misfits Market achieves this through strategic acquisitions like Imperfect Foods, expanding geographic reach and fulfillment capabilities (first-party and third-party).
Instead of competing with traditional grocers on assortment size, Misfits Market focuses on a curated selection of ~700 items, emphasizing unique, sustainable products and a seamless customer experience.
Partnerships with farms and brands are crucial for sourcing "imperfect" products and for developing new private-label items from otherwise discarded ingredients.
Optimizing the supply chain for variable product availability and logistics is key to success in the unsellable products market, contributing to a more resilient food system.
A mission-driven approach, centered on reducing food waste, can be a powerful differentiator and driver of customer loyalty in the competitive e-commerce landscape.
Misfits Market thinks it has found a unique way to tackle the difficult business that is online grocery.
The company, which acquired Imperfect Foods over a year ago, has a pretty simple premise. It partners with farms and brands, and sells products that otherwise wouldn't hit major retail shelves. The name of the game for this type of business is scale, which is something COO Corey Farrell is constantly thinking about. But the ethos behind Misfits is sustainability.
"We wanted to be able to offer the consumer more complete shopping experience, to help us ultimately reduce more food waste," Farrell said on this week's Modern Retail Podcast.
The Imperfect acquisition has helped with growth. With the two companies combined, Misfits has a large presence on both coasts, and is growing both its first-party and third-party fulfillment. With this comes other areas of expansion -- namely, private label.
Misfits does not bill itself as a competitor to Walmart. "Our assortment is limited," Farrell said. Right now, it sells around 700 items, compared to the over 20,000 most grocery stores contain. But, by working with the right partners and being able to create new private-label products that wouldn't otherwise be sold, Misfits is generating new revenue streams. Farrell pointed to a product Misfits sells that consists of broken pretzels that would otherwise be thrown away, which are dipped in chocolate.
"That's an example of part of what we're trying to do with our private-label assortment that's very aligned with our mission," he said.
Ultimately, the idea is to grow Misfits so that it's available in the entire country and continue to work with companies that want to offload otherwise unsellable products.
"As we expand our assortment. We want to make the shopping experience more seamless for consumers," he said.
Get more from Modern Retail with the daily newsletter, sent out each weekday morning. Visit modernretail.co/newsletters to sign up.
Frequently asked about this episode
What does this episode say about supply chain & operations?
Misfits Market differentiates itself by focusing on upcycling food waste into new private-label products, offering a novel revenue stream and reinforcing its sustainability mission.
What does this episode say about brand & content?
Scale is paramount in the online grocery business; Misfits Market achieves this through strategic acquisitions like Imperfect Foods, expanding geographic reach and fulfillment capabilities (first-party and third-party).
What does this episode say about dtc strategy?
Instead of competing with traditional grocers on assortment size, Misfits Market focuses on a curated selection of ~700 items, emphasizing unique, sustainable products and a seamless customer experience.
What does this episode say about finance & fundraising?
Partnerships with farms and brands are crucial for sourcing "imperfect" products and for developing new private-label items from otherwise discarded ingredients.
What does this episode say about supply chain & operations?
Optimizing the supply chain for variable product availability and logistics is key to success in the unsellable products market, contributing to a more resilient food system.
