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How one food startup is making the natural food supply chain more efficient
(and expanding nationally)

Pat Flynn, Co-Founder, Hazel Technologies
April 7, 2016 6:45 pm CST

How close is the nearest Whole Foods to your house? If you are part of the nearly 85% of Americans that do not live within a walking distance of a Whole Foods location, you probably don't even know.

Wholeshare is a software platform that translates how consumers operate into how wholesalers operate

Wholeshare is a software platform that "translates how consumers operate into how wholesalers operate", according to CEO and co-founder Matt Hatoun. The result? A more efficient food system that can bypass large natural food grocery chains, providing more access at a more competitive price.

Making our food supply chain more efficient
That's where New York and San Francisco-based food technology startup Wholeshare comes in. The company, originally founded by Brown University computer scientists Matt Hatoun, Peter Woo, and Miriam Goldberg, is an online marketplace where anyone has access to natural foods, even residents of so-called "food deserts".

"Wholeshare is essentially an online marketplace that enables people everywhere to access natural and organic food at wholesale prices by shopping together as a group," says CEO and Co-Founder Matt Hatoun,

"There's a couple different advantages to customers, there's two major value props in this model, the first is price, natural food stores on average mark-up 20-55%, Whole Foods on average marks up 55%. The second value prop is, which is more important for us, (is) access, access to natural and organic foods."

The problem
"Large natrual food chains like Whole Foods are really restricted in terms of where they can operate," says Hatoun, "they can really only operate in large, large cities and wealthy suburbs...The biggest issue that is restricting natural food stores is that they have really high overhead costs as a last mile solution for (food) distribution."

Grocery stores of all types, being so far down the food supply chain, are inherently wasteful. "You think about all the costs that go into running a grocery store, you've got spoilage, electricity, employees, rent, all that stuff," continues Hatoun.

Food insecurity in America is concentrated in rural, non-metropolitan areas.

Food insecurity in America is concentrated in rural, non-metropolitan areas.

The solution
The core innovation created by Wholeshare is its software platform. According to Hatoun, the software platform, "automatically aggregates orders from friends, family, and neighbors within the community to one group order".

The result? 10-20% savings for consumers who may not even have access to more expensive natural food stores.

There is also a benefit for food wholesale partners of Wholeshare: they gain access to new, totally unexplored markets for their product not accessible by conventional stores. The process of syncing their catalogues is also incredibly easy, involving just a simple excel upload.

"What were doing is kind of replacing that very costly infrastructure of a natural food chain with a network of much smaller lightweight drop off points."

A drop off point is defined as any communal location, like an office building, church, community center, or even coffee shop or home where everyone in a Wholeshare group can come and pick up their UPS delivered food orders straight from wholesale warehouses.

Whereas a grocery store requires thousands of supporting workers and customers to operate, a Wholeshare group only needs 5-10 people to get off the ground (see picture below).

Wholeshare aims to bypass an often times inadequate grocery system

Wholeshare aims to bypass an often times inadequate grocery system, creating access for more consumers and business for food wholesalers.

Traction and National Expansion
According to CEO Hatoun, the concept of Wholeshare has resonated deeply with the healthy eating movement in the United States: "People are moving towards eating healthier, understanding where their food is coming from...that trend has really penetrated all socioeconomic  classes, all different geographies throughout the country."

And it is not just talk, after originally operating a full food distribution supply chain with all types of natural food and produce distributors only on the east coast, Wholeshare has struck a deal with the largest natural food distributor in the country to begin operations nationally in 2016.

The rollout will begin with non-perishable offerings of over 15,000 different national food products.

For experienced co-founders Matt Hatoun and Peter Woo, software startup veterans who started their first company, a bus tracking transportation software, as college students,  food supply chain-disrupting Wholeshare is different than past companies.

"Our background has always been in consumer facing software, trying to solve problems for consumers, but this is a problem that we feel a lot more passionate about,"

More information on Wholeshare's expansion to a city near you

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