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Business

How Goldbelly gained a million new customers during the pandemic




If you received a frozen Lou Malnatis deep-dish pizza or Juniors cheesecake in the mail – especially in the summer of 2020 – you probably have Goldbelly to thank.

The food delivery website was first launched nine years ago, with the aim of sending food from popular restaurants across the country to hungry customers, far and near. But as founder Joe Ariel says, the site was perfectly suited to the recent pandemic shutdowns: Many Americans confined to their homes experienced intense “food nostalgia,”[ads1]; just as restaurants across the country needed creative ways to keep the business alive.

“I mean, we were probably the fastest growing company in the country [that] years, “Ariel tells CNBC Make It.

Goldbelly added one million new customers in 2020, with annual sales of 300% compared to 2019, according to the company. Ariel refused to share specific revenue figures, but notes that Goldbelly – which currently employs a team of 160 people and works with over 1,000 restaurants in all 50 states – certainly got the most out of its pandemic popularity, raising $ 100 million from investors and May 2021.

Goldbelly has now raised more than $ 133 million from investors such as private equity firm Spectrum Equity and Shake Shack founder Danny Meyer. And Ariel has collaborated with world-renowned chefs and restaurateurs such as David Chang, Wolfgang Puck and Marcus Samuelsson.

Ariel’s efforts are that consumers want more than local deliveries from companies such as Grubhub and Uber Eats. Rather, he hopes, people will pay premiums for culinary things they usually cannot have.

So far he seems to be right.

The “magic moment”

Ariel was 25 years old when he started his first online startup, an online directory of local takeaway menus called Eats.com, in 2002. This website grew to attract 25,000 unique visitors per month when Ariel sold it to Delivery.com in 2009, for an undisclosed amount that Ariel describes as “a life-changing sum” of money.

Following the termination of the agreement, Ariel spent more than a year as CEO of Delivery.com. When he left in 2010, he had financial freedom and a desire to build something of his own again. Two questions ran through his head, he says: “What is the future of food? What are the things I love the most?”

At the time, Ariel lived in New York City, a foodie mecca with tens of thousands of restaurants. But he kept thinking about the southern cuisine he had enjoyed as a college student at Vanderbilt University. He called the eateries in Nashville and asked them to send him barbecue meat in New York. Sometimes he was successful – and receiving these FedEx boxes gave him a nostalgic satisfaction that no local restaurant could provide.

Most people, he realized, probably would not care about restaurants in other cities as he did. He says he discussed the idea with his wife, Vanessa, who told him: “This would be the first experience [in] food and it’s based on what you love, not where you live. ”

“It was the magic moment or the ‘Aha’ moment where it’s like ‘Wow,’ [and] If we could bottle this up and spread this joy and happiness and comfort through food – no matter what you dream of, no matter where you are – it’s a magical idea worth spending your life on, says Ariel.

“Millions of new customers”

Ariel, his wife, and co-founders Joel Gillman and Trevor Stow turned to friends and family for seed money, and eventually landed $ 200,000 to build a beta version of Goldbelly’s website. From there, Ariel’s first challenge was to convince restaurants to spend time and resources on freezing some of their most popular menu items and delivering them to Goldbelly to ship nationwide.

“They did not know who the hell I was,” Ariel says of the restaurant owners. “Nine out of 10 asked me to get off.”

That caution disappeared after Goldbelly was officially launched. Ariel got a place with the start-up accelerator Y Combinator in 2013, and Goldbelly was on Time Magazine’s list of the internet’s 50 best websites that year. In 2019, Goldbelly had a customer database of approximately 2 million people, which made it clear that consumers were willing to pay a premium for popular food from across the country – for themselves or as gifts to friends and family.

And make no mistake, Goldbelly is not cheap. A single 8-inch cheesecake from Junior’s in Brooklyn, New York, costs about $ 70. A four-pack of cheesesteak hoagies from Pat’s in Philadelphia will give you $ 110. Shipping, which is included in these prices, accounts for the majority of the inflated price tags.

“Our mission as a company is to deliver the world’s most magical dining experiences, [it’s] not to deliver the cheapest raw material experiences, “says Ariel.” It’s not to deliver your lunch in 15 minutes. We want to take advantage of something else. “

Yet Goldbelly was not exactly a household name before the pandemic hit. Many people became more willing to throw out fun or nostalgic culinary experiences delivered to their doors. And restaurateurs, who often grabbed straw, saw how the service could also allow them to reach new customers far from their local neighborhoods.

Ariel says that several high-profile chefs were reluctant to sign on pre-Covid, and thought it would feel more like a gimmick than a necessity. He quotes Momofuku founder and TV personality David Chang as a pandemic convert whose restaurant group joined Goldbelly in November 2020.

“I always knew about Goldbelly, and was maybe interested, but not interested enough,” Ariel remembers Chang telling him. “Well, cooks [have] had to throw out his ego and try new things. “

Ariel says he is well aware that Goldbelly’s pandemic growth will not continue forever. But as long as people are willing to pay for the food they love, he says, the company should be fine.

“There are a lot of people who love food,” says Ariel. “The way you can see if someone is a real Goldbelly [fan] is: Have they ever traveled for food? “

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