Business is Boring is a weekly podcast series presented by The Spinoff in association with Callaghan Innovation. Host Simon Pound speaks with innovators and commentators focused on the future of New Zealand, with the interview available as both audio and a transcribed excerpt.
If you’re looking at companies in the last few years that have made a real impact in the local entrepreneur and general scene, you can’t go past My Food Bag. Pulling an idea in from overseas and making it work here in tiny, weird New Zealand was a passion for Cecilia and James Robinson. The idea was weekly delivered food parcels that contained everything a family needed to make meals for the week. They got Nadia Lim on board as a brand ambassador and next thing you know they’re making $100 million in revenue.
But it can’t have been that easy. In this conversation Simon talks to Cecilia about making the move from their earlier company Au Pair Link, approaching Theresa Gattung to sit on the board, creating a well regarded customer service operation, and living on Weetbix during the hard times.
I saw you speak fantastically at a Deloitte Fast 50 event and you mentioned that one of the things that you guys had done that’s a little bit different was you cannabalised yourself. So you’d bring out products that would eat away at your market share because otherwise other people would. That struck me as such a great idea but did people advise you not to do that? Was that not conventional wisdom?
I think Steve Jobs said something like ‘if you don’t cannibalise yourself, someone else will’. I actually banned ‘cannibalisation’ as a word internally. Our team wasn’t allowed to say ‘cannibalisation’ because we just talked about meeting our customer need. Yes, there was a lot of anxiety inside the business, particularly in the finance team, and their job is to be conservative. You don’t employ a CFO to be a radical change person. You want them to be conservative and to protect the business. So there was a lot of robust debate internally around what would make sense, but ultimately it just came down to listening to our customers. For doing that as a business we’ve got world class retention rates in our category. We’ve got customers who keep coming back and customers who feel as if they’ve got a choice within our product suite to go from product to product, and we want to meet that need. We quickly realised that trying to fit people into one box was never gonna work. So giving them the opportunity to swap and feel as if they have more choice was really important early on. Having that level of cannibalisation or migration was really important.
What’s an example of that? Is that like the more bargain-focused box that you brought out?
I imagine it’s biggest competitor would’ve been your major Family Box.
You’re absolutely right. You look at that from a business perspective and so many people would say ‘why would you change a winning formula? Why would you try to do something different with something that’s working so well?’ But we also did hear customers saying ‘we’re stretched on a budget and Family meets a lot of our needs but it’s not entirely what we’re looking for’. We didn’t only create a product that better met that customer’s need, we actually looked at the tastes of people and all of the different things they were coming back to us saying. Through that, we launched Bargain Box, which has been an outrageous success, to be really honest with you. It’s now constituting a really significant part of the overall My Food Bag brand. So we’re really proud of that and the way that we executed it.
It was a step-change in difference, wasn’t it? Less than half the cost a plate?
Yeah, it’s about $5 a plate. As a business, we’re really passionate about taking on the takeaway. We’re all about teaching people how to cook and giving them that opportunity. There are lots of businesses out there focused on giving people food, takeaway or whatever it is. For us it’s about really teaching people how to cook. There’s something incredibly empowering about looking at Bargain Box’s Facebook feed and you see these kids in the kitchen, cooking with their mums and dads. It’s truly changing the way that we eat. And we’re really proud of that because I don’t know many businesses in New Zealand that are changing the way people are eating to that degree.