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Freshly CEO Mike Wystrach joins Yahoo Finance’s Zack Guzman to discuss the demand his meal delivery company is seeing amid the coronavirus pandemic.
ZACK GUZMAN: The way that Americans continue to spend their money has shifted quite considerably. Here in New York as indoor dining remains closed for the time being, a lot more have been either getting delivery or cooking at home. We've seen that play out here, and it's been one of those companies that we've discussed before, Blue Apron, down a shocking 95% since it's 2017 IPO, showing a little bit of how much excitement there was around the meal kit space. But now in this pandemic, giving new life to the idea that meal kits and cooking at home have become much more popular and here to discuss the idea that more Americans continue to shift.
I mean, you look at the statistics, and it's true there that more Americans do want to be cooking at home through this if they can't get to their favorite restaurant. And here to discuss that with us, the CEO of Freshly, Mike Wystrach, joins us now. And Mike, I mean, talk to me about what you've seen on this too, because if not delivery, seems like cooking home would be the only alternative out there. So what have you guys seen since the pandemic hit and how Americans continue to shift their eating habits?
MIKE WYSTRACH: Yeah, I think, well, first of all, Zack, thanks for having me on. I think what we saw is an acceleration. The pandemic drew forward the acceleration of trends that were happening largely across food, which is kind of this transformation from food delivered through brick and mortar to online. And you see that, whether it's Instacart, meal kits, Grubhub, Uber Eats is people generally are, as we see with Amazon, is people are ordering more things online to be delivered to their house.
And meal kits, you know, we're different than meal kits in that those are fully prepared and cooked meals. I mean, I'm sorry, their meals are, you know, you're cooking the meals, and ours are fully prepared delivered to your house. So we kind of sit closer to the Grubhub, Uber Eats, from a use case, as our customers are looking at, but I think it's broadly a massive acceleration of food going online. It's a $1.4 trillion market that has literally tripled online in the matter of four or five months.
ZACK GUZMAN: Yeah, em you get them shipped out. You can do plans there. You throw them in the microwave, heat them up, three minutes time, you've got a fully cooked dinner there from Freshly. I mean, when you look at, I guess, some of the shifting dynamics in the demographic front too. Because before, I imagine it would have been more your college kid who doesn't have much time here to cook. I mean, now, you've got people who just don't want to leave the home because there might be health risks associated with it too. So did you notice any demographic changes here and who might be turning to a meal kit or meals like yours?
MIKE WYSTRACH: Yeah, I mean, we saw kind of pre-pandemic, we saw a pretty broad index of consumers. Tended to be more urban populated where we really made a bigger penetration, because those customers tend to be really busy. I think one of the things that we saw while we pre-pandemic had about 20% of our customers over 60, we saw that accelerated. As you saw, and I think you hit on earlier in one of the segment that the pandemic has negatively impacted age groups differently. So there has definitely been older demographics have wanted to stay home more. And traditionally, those older demographics where the later to come online on kind of e-commerce platforms. So we definitely saw an acceleration across all users, but that user was definitely larger.
ZACK GUZMAN: Well, it's interesting, because I mean, you guys have been doing this since 2012, so you've seen the way that this space has evolved. You saw the way that Blue Apron's gone, competitors popping up. Your last funding round, money came from Nestlé. I'm curious to see just real quick before we let you go, what the end game looks like for you, because a lot of people might say that, you know, this kind of model makes sense if you have a grocery store like a Kroger coming in, as they brought Home Chef for about $200 million before. So what's the end game look like in your mind for Freshly?
MIKE WYSTRACH: Yeah, I think, first of all, it's important, I think, people have referenced Blue Apron and the challenges they've had. If you look at their nearest competitor, HelloFresh, they're currently trading about seven billion, and they went public about two billion right around the same time. So I think the market's big. For us, is look, as we continue, our biggest focus is on how to solve our customers' challenges and pain points, and that's bigger now than it ever has been. And so we're going to stay focused on that, and, you know, the end game is we try not to think too much about where we end up and how those things play out. We just want to focus on delivering the best product we can to our customers.
ZACK GUZMAN: Take it one meal at a time, one tasty meal at a time. But Mike Wystrach, appreciate you taking the time to chat, the CEO at Freshly. Thanks again, man. Be well.
MIKE WYSTRACH: Thanks.