Three companies with somewhat different business models are offering options for those looking for healthfulness and convenience.
In the wake of the multiple food scandals that have shaken Taiwan’s faith in its local food industry – and considering the oily, starch-laden foods that typify Taiwanese cooking – health-conscious consumers are hard-pressed to find nutritious, quality food on the go. Now, however, several startups are serving up healthy foods with the added convenience of delivery straight to the consumer’s home or office.
Green & Safe, EatSmart, and Nutrifresh cater to different segments of the health food market, with Green & Safe offering fresh, organic foods that require some preparation, while Eastsmart and Nutrifresh are serving up ready-to-eat meals. But all share a similar formula of subscription-based food delivery.
“We’re basically an e-commerce business,” explains Steve Ho, founder of Nutrifresh. “We’re a central kitchen and a delivery service.” This business model makes for a lean outfit. Every working day, a staff of just eight people produces two to four meals for some 250 customers throughout Taipei – 750 meals in all. “There’s no storefront, so we don’t need to serve and clean up after customers,” Steve says. The company employs a further eight drivers to deliver the meals to homes and offices in the Taipei metropolitan area.
Green & Safe operates in much the same way, as an e-commerce site that also delivers from a central kitchen and depot via their own delivery vehicles.
The exception is EatSmart, which is affiliated with Coda restaurant, where its gourmet meals for dieters, including the occasional celebrity, are prepared. Andrew Lunman, the owner of Coda and cofounder of EatSmart, says that “if I did not have a restaurant, Eatsmart could not exist.” Citing the synergies derived from the sharing of labor and kitchen facilities, he observes that EatSmart essentially “provides a new channel and maybe can help us to get into a little more premium product.” EatSmart contracts third-party food delivery service Foodie Express to deliver its meals.
The healthy-foods-delivered model is already well-established in many markets, particularly the United States, where market leaders Jenny Craig and Nutrisystem pioneered the business of delivering processed meals to dieters seeking portion- and calorie-controlled meals. More recently, startups such as Freshology, Hello Fresh! and Plated now deliver boxes of ingredients for the home preparation of meals that emphasize freshness, health, and convenience for health-conscious but time-constrained consumers.
The market is thriving in the United States, where new businesses seem to enter the market every day, some focusing on organics, some on localism, and still others on specific diets or processed foods. But in convenient Taiwan, where there is no shortage of inexpensive meal options for busy office workers, are consumers ready for or interested in these products and services?
Market players say demand has been generated by a disappointingly unsafe food industry. Longtime concerns about food safety have been acerbated by the recent waste oil crisis and earlier scandals involving dangerous chemicals added to drinks and other products. Ho Yi-chia, president of Green and Fresh, says the company’s business increased sharply in the wake of the most recent scandals, while Steve Ho of Nutrifresh says the scandals “did drive some customers to us, and when they were considering joining us, one of the first questions they had was ‘what kinds of oils do you use?’”
Many busy office workers subsist primarily on small restaurant and takeout foods such as biandang lunchboxes that tend to feature oily meats and vegetables and lots of starchy white rice. “Taiwanese food is not healthy,” asserts Steve Ho, saying that the cheap prices of the small streetside food stands should be red flags in terms of the quality of the ingredients and overall hygiene. “If someone is charging so little for their food, what kind of quality can they be offering?” he asks.
Daniel Wu, cofounder of Eatsmart along with Andrew Lunman, says that their customers are primarily “very health-conscious people who are sick of getting oily food every time they go out but don’t have time to cook for themselves.” EatSmart meals average between NT$150 and $250 – not cheap by Taiwanese takeout standards, but not very expensive either. However, the company does require that subscribers pay upfront anywhere from NT$10,000 to NT$20,000 or more to cover the cost of the next month’s meals.
“A lot of people are interested in the idea of healthy eating but don’t want to commit to NT$18,000 worth of meals a month,” observes Lunman. He says Eat- Smart’s customers “tend to be young and ambitious with a reasonably high disposable income.”
Lunman describes health food as “a premium product” and subsector of the “image industry,” alongside fitness and cosmetics and other luxury goods and services intended to make people look and feel good. “It’s nice to call it healthy and it is healthy, but I think people do healthy things not because they necessarily want to be healthy but because they want to look good,” he observes.
“This idea that we need to go the gym all of the time and that we need to have toned abs and girls need to work on their butts comes from the West,” Lunman continues. Consequently, “our market is primarily people with a lot of Western exposure. They’re either Westerners themselves or ABCs (American-born Chinese) or CBCs (Canadian-born Chinese), or people who spent a lot of time in the West.”
Another reason for the predominantly expat clientele may be that Lunman and Wu’s principles may differ from Taiwanese people’s basic concepts of nutrition. Eat- Smart “uses only fresh, natural ingredients – for example quinoa, guacamole, blueberries, Lunman says. “We try to tap all of the superfoods, and we use only lean proteins such as salmon. And we absolutely don’t use any processed food.”
Wu observes that these same ingredients are sometimes hard for local consumers to accept, as they are used to eating a lot of white rice, often in a biandang. EatSmart’s offerings are “higher in proteins and contain raw vegetables and different kinds of carbs,” he notes.
Steve Ho of Nutrifresh agrees that “Taiwanese culturally don’t like to eat raw foods.” He says “I hear that from customers a lot: ‘I don’t eat cold foods, I don’t eat raw foods.’” And while many in nutrition circles strictly limit the amount of “white carbs” such as rice, pasta, and potatoes, Steve says that “Taiwanese need rice with their meals.” Recognizing that reality, he developed an Asian meal box to cater to local tastes. He uses lean meats and lots of vegetables that are stir-fried (“we use tiny amounts of oil just so they won’t stick to the pan”) or steamed.
As a result, after four years in business, the majority of Nutrifresh’s 250 customers are now local nationals. In fact, Ho says that one of his biggest surprises has been the low percentage of expat customers.
Likewise, Green & Safe’s customers are almost entirely locals, and the company recently revised its target demographic income level downward from NT$3 million a year to $1 million, seeing a broadening trend in the market toward health consciousness. Ho Yi-chia describes her customer base as 35-50 year-old working parents who “need healthy processed food and don’t want to take their kids out to eat all of the time.”
The success of these varied strategies would seem to indicate positive conditions for future development of the market, but the sector is still in its infancy and faces a number of challenges that may constrain continued growth.
First, while subscriptions are considered essential to enabling these firms to leverage batch production and a steady revenue stream to minimize costs and deliver high quality, the pre-paid business model has faced problems in Taiwan due to strict regulations designed to protect consumers – some of them adopted in the aftermath of the Alexander Health Club scandal in 2007, in which the company continued to sell lifelong memberships until the day of its collapse. Banks in Taiwan are unwilling to provide support for subscription-based businesses.
While Nutrifresh was able to overcome this challenge, subscription plans may also run into problems with customer acceptance. Consumers might balk at spending between NT$10,000 and $20,000 per month for meals upfront, even though they are likely to spend as much or even more eating on their own. In addition, Lunman notes, eating is a social activity and subscription meal plans can be isolating. “If you’ve got a family and sit down with them, and you’re eating this and they’re eating something else, there’s a bit of a barrier there,” he says. “And if you’re working in an office, you don’t go out to eat with your friends, so it does take a lot of commitment.”
On the other hand, “if you’re really committed to weight loss, then you have to be committed to the plan,” he notes. “We’re results oriented. You’re not eating this cause you want tasty – although the food is tasty – you’re eating it because you want to be healthy. As long as we’re achieving that, we’re successful.”
Choice – or the lack thereof – can also present challenges. While the EatSmart meal plans cycles through 90 different meals, Lunman admits that “we found that around the three-month mark people start to say, okay, I’ve seen that enough.”
Nutrifresh counters tedium by offering more choices and making some compromises between nutritional ideals and what customers expect in their meals. “Whenever I plan the daily menu, everything is about balancing the calories, as well as the textures and the kinds of meats,” Steve Ho says. He concedes that he winds up using more “white carbs” than he would like “because people are not as idealistic as I am and they taste good – and that matters.”
Nutrifresh: Rescuing office workers from the biandang
Taiwan-born but Texas-raised, Steve Ho worked on Wall Street for years until the financial crisis of 2008. “When you’re a corporate (worker), the first thing in life is your work and the money,” he observes. “The wealthier you get, the more your health slips.” Then suddenly “I had no job and no apartment in a city [New York] that I didn’t love,” he recalls, so he went back to Taipei to take a break and restore his health.
After four months of working out and eating right, he felt better and decided he wanted to work in health and wellness. Noticing that no one in Taipei seemed focused on the diet-end of health, he says, “a lightbulb went off in my head.” Steve established Nutrifresh in 2010, and despite a year of research he was still unprepared for market realities and almost folded. But he held on, and through trial and error built his company into one serving 250 customers paying between NT$12,000 or more a month, depending on the plan. Meals are delivered twice a week, and subscribers can choose among Western, Asian, and “third choice” prepared meals, most of which can be eaten either warmed in a microwave or cold.
While Steve initially expected the business to cater to corporate managers, 60% of the meals are delivered to homes and only 40% to offices. He also notes that a surprisingly large number of customers are female, and that some subscribers use his service to provide for their children or elderly parents. “One thing that we learned is the importance of adaptability,” he says. “We’ve changed ourselves as we’ve figured out what the customer needs.” He continues to seek to expand the business, and aims to eventually offer service in Taichung and Kaohsiung.
EatSmart: Similar, but higher end
Imitation is the sincerest form of flattery, and Andrew Lunman and Daniel Wu, co-founders of Eatsmart readily concede that they owe their inspiration to Nutrifresh. Wu, a personal trainer from Australia, says he was looking for ways to help his training clients eat better when he discovered Nutrifresh. Client Andrew Lunman heard about the system, and suggested that they could partner on their own food production and delivery company, but with a menu more tightly focused on the fitness sector as opposed to the general community. The result is EatSmart, a boutique food delivery system that operates from Coda restaurant, serving fewer than 20 subscribers. EatSmart offers various plans in four- and six-days-a-week options ranging from the NT$12,000 Healthy Helper “supplement plan” to the NT$18,000 “Liquidator” full-course version.
EatSmart delivers two days’ worth of fresh meals in the evening, “so you have your food ready for you to take to work,” says Lunman. “We really want to make it accessible to people,” he notes. “You can eat it on the go, you can eat it at your desk, you can eat it cold.”
He says convenience is important to foster continuity in the program. “If this didn’t work, people wouldn’t stick with it.”
He adds that people in the upper-income demographic are demanding, making tastiness all the more crucial. EatSmart offers tastes from Taiwan and around the world: even a version of Taiwan’s beef noodle soup (niu rou mien). “We try to play with healthy flavors that are interesting on the palate, but our first and foremost goal is it’s got to work for your health.”
A longtime restaurateur, Lunman over the past more than 10 years has operated such Western restaurants as Bongos, Forkers, and Coda. But despite his long experience, the healthy-foods-delivered sector has brought some surprises. One is that single people comprise only around half of the clients, “not as high a ratio as I would’ve thought,” he observes. Another is that about three-quarters of the customers are men, though some couples go on the plan together.
One reason for the preponderance of males may be the availability of EatSmart through some of the new gyms in Taipei. “We want to provide pre- and post-workout meals for our clients,” Lunman says. He considers that gyms will be an increasingly important sales channel for the company.
Green & Safe: How Grandma would make it
With eight years of operation, Green & Safe is the oldest player in the market and the market leader, having some 2,000 subscribers who receive fresh, organic fruits and vegetables, as well as pledged organic meats (Taiwan has no organic certification for meats), wild-caught fish, and even frozen, prepared meals. Ho Yi-chia says Green & Safe takes pains to track the exact source of all its ingredients. For example, to ensure the quality of the extra-virgin olive oil they use, Ho and her team went to Italy to visit the 600-year-old farm that presses it. All of the farms that are Green & Safe suppliers are organic or pledged organic, and the company is careful not to push farmers to provide more than they are confident of producing for fear that organic standards may be compromised.
Green & Safe sells to more than 20,000 customers every month, but only 15% of them are on the subscription plan – the rest order a la carte. For NT$2,500, the smallest weekly plan provides two fully prepared meals and the ingredients for three more for a family of two or three people. NT$4000 and NT$6000 plans are also available. With its focus on organic farm-to-table foods, Green & Safe’s offerings vary by the season and include special items for some holidays. At Christmas, Ho says, “we give all the things that go with Christmas, including a whole organic chicken and organic chocolate cake.” For the Chinese New Year, Green & Safe provides a whole chicken and a large portion of pork, dumplings, mustard leaves – “everything for the prayer table.”
Catering to the local market by offering healthier, organic versions of traditional favorites has allowed the firm to grow steadily each year, and demand now exceeds supply. But Ho will not expand faster than Green & Safe’s ability to ensure the safety and quality of its suppliers. “If you grow too fast, you’ll lose control over quality,” she says.
Green & Safe: Tel: 0800-321-378 http://www.green-n-safe.com