Online Grocers Capitalize on Subscription Box Trend to Sell ‘Ugly’ Produce

Two major grocery shopping habits became more completely ingrained among consumers over the past year: online food delivery and a desire to promote sustainability. Both online grocers evangelize a similar mission: Help eliminate the 80 billion pounds of annual food waste in America by purchasing produce that would likely be dumped. The boxes contain food purchased directly from farms that would be tossed because traditional grocers deem it unsellable. Online grocery shopping became more popular during the deadliest days of lockdown when going into a physical store was scary for many Americans. About 54 million households purchased groceries online in August 2019, according to data from Brick Meets Click. That number skyrocketed to 72 million in June 2020 and a year later it’s at 64 million. Carrefour’s ‘Act for Food’ Wins Cannes Lions Creative Business Transformation Grand Prix Misfits and Imperfect are capitalizing on that trend by expanding offerings beyond produce. And Misfits is doubling down on its growth. In April, the nearly three-year-old company announced an infusion of $200 million in funding, earmarked to create a warehouse in Dallas and a western headquarters in Utah. The moves enable the online grocer to serve every zip code in the lower 48 states by year’s end. Now, Misfits is taking its message on the road with a branded van that embarked on an 18-city tour last week. “A true omnichannel marketing strategy is the key for long-term success,” Abhi Ramesh, Misfits’ founder and CEO, told Adweek. “You still want to see, touch and have interaction with a food brand, so that IRL component is a critical part of strategy.” The beauty of selling ugly Selling “ugly” produce is a mixed bag. When Walmart, the nation’s largest grocer, piloted a program in 2016 with 300 stores selling weather-dented apples, it failed. But French grocer Intermarché found success in 2014 with a cheeky ad campaign about “Inglorious fruits and vegetables," that encouraged consumers to buy the produce at a 30% discount. Otherwise, the ad said, it would contribute to the 300 million tons tossed annually by the European Union. It was extremely successful and was something of a primer on how to create the market for “ugly” produce. “You’d argue marketing should be aspirational but these companies' campaigns fly in the face of traditional marketing,'' David Bishop, a partner at Brick Meets Click, an agency that helps companies understand the way technology impacts grocery shopping, told Adweek. “It’s almost anti-marketing. It’s the perfect, imperfect food. They’re being honest and transparent and it’s a breath of fresh air.” Imperfect Foods took the lesson to heart. When the service launched in 2015 in San Francisco, leadership believed that success was predicated on educating the public about food waste’s impact on farmers’ livelihoods and the environment. The company launched a “simple” digital campaign that literally put a face on ugly produce—the ads featured misshapen peppers and carrots with googly eyes and explained why grocers won’t buy disfigured produce. Sure, the company could sell misshapen oranges to juicers, but it would make significantly less profit. “There was a gap in knowledge,” Reilly Brock, Imperfect Food’s associate creative director, told Adweek. “Once we raised awareness, we didn’t have to do much to raise demand. Sometimes it's the simplest tactics that are the most effective.” It worked. During the pandemic, Imperfect Foods’ customer active customer base grew by 40%. Two DTC merchants used humor, content and partnerships to drive growth and reduce waste Storytelling builds empathy Both companies tell the stories of the farmers they buy from. “Sharing their stories has been a very powerful tactic,” Brock said. “When we're able to show what it takes to grow something as simple as an apple, beet or potato, and show how razor-thin the profit margins are—even in a good year—and how many different variables these farmers are juggling, that helps build empathy.” The same goes for Misfits. It highlights supplier stories and telling customers about inefficiencies in the food chain. For instance, it recently added stroopwafel cookies in a co-branded partnership with the manufacturer Belgium Boys. The company takes the cookie bits lost in the production process and form a new cookie. It has a similar partnership with 88 Acres’ seed-based crackers. It took the thousands of pounds of edges that come off during production to create cinnamon maple edge ’nola snacks. To share these stories, Misfits is changing its marketing strategy. Its ratio of online to offline spending has shifted from 75-25 in favor of digital, to 60-40 and will ultimately remain about 50-50. “Digital channels are a little less effective than they were two years ago,” Ramesh said. “I think there's also a lot of important things that we can do offline.” That includes real-life activations like the bus tour. In April, Misfits partnered with Urban Outfitters for a pop-up activation at a Williamsburg, Brooklyn event space. Visitors received a free 10-item starter box and branded Urban Outfitters tea towel. It led to another pop-up at Anthropologie in Fort Worth, Texas. A touch of class Both brands lean heavily on content to drive engagement. Imperfect Foods features thought leadership on its blog on topics like sustainable farming, how to get involved in reducing food waste and what expiration dates really mean. The Whole Carrot content marketing platform features long form articles and recipes and their podcast, Unwasted, shares best practices and changemakers. Misfits Markets’ blog also features news, recipes and how-tos. But it’s the content partnerships on social media, such as chef Bobby Flay’s, that really drive engagement. The celebrity chef films videos of himself unpacking his Misfits box and discusses the recipes he’ll make to give viewers ideas on how to use their bounty. His content increased the number of subscriptions driven by Facebook advertising by 38% in the first three months of the partnership. Misfits is leaning into the cooking class concept. It's co-hosting a three-session virtual cooking class series with Food52, an online platform for home chefs that offers content, instruction, retail and recommendations, beginning in late August. “The whole goal is to be seen in places you wouldn't expect,” Holly Eagelton, Misfit’s vp of marketing, told Adweek. “Because we are not your average brick and mortar grocer, we want to be where people who have a sustainability mindset are going to be.” Fast-Food Brands Look at Reusables to Attempt to Solve Container Waste