Hundreds of millions of people around the world now shop online and buy the food and drink they need to feed their families more cheaply and efficiently than ever before. Australian start-up Freshoannouncing a $10 million Series A investment today, believes professional chefs in restaurants, hotels and other venues should be doing exactly the same.
“There is a huge opportunity to digitize the supply chain for the food industry,” said Huw Birrell, president of Fresho, who co-founded the company with James Andronis. The company started working with the food sector in Australia and New Zealand, but was launched last year in the UK and also has a fledgling operation in the US.
To date, Fresho has signed up 38,000 hospitality outlets in these four markets, giving them access to an online food ordering platform that works in much the same way as online supermarket websites, but is tailored to the needs of professional buyers, with a focus on fresh foods. .
Chefs can access current suppliers’ prices, full details of their inventory and information about special offers, then place an order for their exact requirements, due the following morning.
“Chefs work incredibly hard and under very stressful conditions,” says Birrell. “Often they come off shift at the end of the evening and then place their orders late at night for the next day.” Emailing orders to suppliers is standard practice in much of the industry, he points out, but many chefs still work by fax or even leave suppliers a voicemail message. The opportunity for face-to-face contact is very limited, as the working hours of chefs and suppliers – who start early to fulfill their customers’ orders – barely overlap.
The result is frustration for everyone involved. Chefs often have little idea of what suppliers have available; they also over-order in the event that some products turn out to be unavailable, keeping food waste at 30-40% in some parts of the industry. For suppliers, the challenge is to process hundreds of orders received in multiple formats. Plus, they don’t have the ability to offer special deals to increase value in other ways, such as highlighting seasonal products or paying off excess inventory.
Birrell says Fresho can solve all these problems. “We take the stress out of both the location and the supplier,” he says. “The chef gets live access to prices, availability and special offers, while the supplier doesn’t have to go through hundreds of orders placed manually through different channels.”
The effect should be lower costs and greater efficiency for both the site and the supplier. And with locations able to place much more precise orders based on a real-time view of what’s available, waste should also decrease; this has clear advantages from a sustainability perspective.
Until recently, the food sector has been slower than other industries to embrace new technology, but this changed during the Covid-19 pandemic, Birrell said. Fresho saw a rapid rollout of its platform in Australia and New Zealand, before launching in the UK last year to target a market three times its size.
British food companies appear to be enjoying the opportunity. Southampton-based supplier Adams Wholesales says its customers have been looking for online solutions for some time. “In just a few months, 60% or more of my customers order on Fresho,” says owner Ali Ahmet.
Now Fresho believes it could have a huge impact in the US. “Like our other markets, restaurants and suppliers in the US are eager to be more progressive, but still operate with outdated processes,” says James Andronis. “B2B food supply chains are changing at a rapid pace around the world with an increased focus on efficiency and reducing waste.”
Hence the fundraiser, with investors’ money earmarked for further improvements to the company’s talent stack, expansion in the UK and a big step in the US. The $10 million will come from new investors, including venture capital funds Capital Zed and Second Quarter Ventures, and angel investor Andrew Sypkes, as well as the company’s existing investors, including Primorus Investments.
Looking ahead, Birrell points to the magnitude of the global opportunity, as the foodservice business in the company’s four target markets is worth $412 billion. And Fresho also sees opportunities to expand its services. One area of interest is data analytics — by tracking market-wide information about what chefs and venues are buying, the company will be in a strong position to alert suppliers to emerging trends and new areas of demand, Birrell emphasizes.