29 Juin Why we invested in La Fourche: something about price, availability, taste and tribe
We are very proud to announce our investment in La Fourche, Five Seasons Ventures first investment in France. Even more so as we completed our due diligence and closed the legal documentation during the Covid lock-down period (the due diligence visit to the warehouse done over Zoom was definitely a first!). Nathan, Lucas and Boris are three great founders: smart, open minded and committed to make better food accessible to anyone (in France for now). In a little more than a year they laid the foundation for a great foodtech business and we are excited to share their journey going forward joining like-minded investors at Heartcore and Founders Future. Together we can change the organic food distribution system for the better.
Food consumption is driven by three historic variables: taste, price and availability. If you add the social endorsement (what we call the “tribe”) and the ambition to change the food system for the better, it starts to look like the kind of opportunity we like to invest. When we met Nathan, Boris and Lucas, the three co-founders of La Fourche, a new kind of online retailer with the mission to make organic food affordable to anyone, we found ourselves aligned to their strategy and direction as it is solidly based on these three pillars.
1st pillar: Price
Organic food is becoming mainstream. In France it weights already €9.7bn a year (5% of food grocery) and growing by 15% YoY (vs 1.1% for the conventional grocery market). The Covid-19 crisis accelerated this pre-existing trend, as people directed more of their budget for food from restaurants to better-quality food to be eaten at home.
Though, price remains an important adoption barrier, often appearing the number 1 reason not to buy organic food. Organic products are perceived to be too expensive to be mass market, but La Fourche figured out a way to offer 30% to 50% discounts on a curated fully-organic offer. A 50% discount moves the market, and this resonates with consumers not only in Paris but everywhere in the rest of France, where almost 80% of their customers come from. And they are not just millennials. La Fourche makes organic food accessible to everyone, and especially families with young children. In times of crisis or economic recession, value-for-money food has proven to be resilient and perform well.
2nd pillar: Availability
E-commerce means availability and convenience. If you want something, a few clicks and you get it delivered to your door or to a “point relais” where you can drive and collect your products on your way home. French consumers started to adopt online grocery options well before covid, as the value of food purchased online was already €6bn and growing at 27% for organic products. We already exposed our point of view on the impact of covid-19 crisis on foodtech here.
La Fourche offers 3000 SKUs from the best organic brands and delivers it to your door or to a network of hundreds point relais throughout France in a couple of days, which is perfectly acceptable for dry products and pantry stock-up. The high level of satisfaction and high NPS scores confirm the appreciation thousands of weekly customers have for the service and products of La Fourche.
3rd pillar: Taste
La Fourche lists only the best brands and best products of the organic market in France. They use technology to track the performance (rate of sale) on the online store for each SKU on a daily basis and use that data to define the optimal assortment strategy. Data analysis is also used to identify new brands and products customers love to eat. There is a lot more correlation between great tasting products and frequency of reordering, but we will leave that to another post.
Bonus pillar: the Tribe
What we were impressed by La Fourche is that their customers feel it is more a club than an online food retailer. Similarly to the successful model invented by Costco in the US, customers actually become members and pay a yearly membership fee after a free trial period. Members can shop and access the attractive discounts, with the logic that the more you buy, the more you save (and amortise the membership fee). An average French family can save over €300 per year on groceries, compared to the same annual basket purchase at a specialised retailer. Again, in times of crisis, this becomes even more valuable. La fourche community is growing fast: 70k followers on Facebook with La Tribu La Fourche user group with 6000 members already, often sharing autonomous tips, recipes, happy pictures and the occasional groan.