Entrepreneur delivers farm-fresh goods to 20k customers, helping restaurants and farmers
4 Minute Read
At Jamestown Fish in Rhode Island, where Matt Tortora was a chef, customers demanded fresh, premium ingredients. The restaurant typically bought them from distributors. “I could pick up the phone, give them a call, and in some cases, same day, get what I needed,” Tortora says.
But the distributors the restaurant worked with were sourcing food from all over the country. The ingredients were rarely local and often not as fresh as they could be.
Tortora and co-founders Erin Tortora and William Araújo set out to solve this problem. Their business, WhatsGood, launched in 2015 and matches restaurants with local farmers. It also recently started offering regular consumers a delivery service of farmers market goods and now has 20k consumers signed up, with a monthly growth rate of about 30%. The company recently closed its seed round of funding at $6.9m, with $5.8m coming recently and $1.1m at launch.
- Tortora’s business idea came from solving a problem for two groups of people: Restaurateurs wanted fresh, local food; farmers wanted more opportunities to sell their goods. Neither group had the time to develop relationships with the other. So WhatsGood built a platform that brought them together.
- WhatsGood grew by leveraging existing networks: On the restaurateur side, Tortora used his connections to find people to sign up for WhatsGood. For producers, he knew many of them would be at farmers markets and built relationships there.
- Flexibility is key: The biggest part of WhatsGood’s business, the delivery of fresh foods to consumers, was not part of the original business plan. That idea came naturally as the business grew. “I think if we had just been beholden or tied ourselves to this is what we’re going to do and only what we’re going to do,” Tortora says, “I don’t think we would have found the successes that we’ve found.
How’d you come up with everything?
I started as a chef. I was a young chef here in Rhode Island and really struggling to find a way to connect with producers of food in my community. I lived about three or four miles from the restaurant that I was running in Jamestown, Rhode Island, and was passing four or five farms on the way every day.
But just being a busy chef and running a restaurant, I didn’t have a whole lot of extra time. Being a busy farmer and dealing with everything that farmers deal with, they didn’t have a whole lot of extra time. The initial idea for WhatsGood really began with that thought of how to potentially use technology to bridge that gap and find a way to connect chefs to farmers.
Basically there were distributors who acted as go-betweens for the restaurants and the farmers?
Some of them had local sources, but most of them did not. Most of the distributors we worked with were sourcing food from all over the world –– if not, then definitely all over the country.
As I started working with farmers and local food producers, you get your eggs from one vendor or one farmer. You’ve got to get your veggies from a bunch of different farmers. So the distributors were easy but didn’t have the local food I wanted. The farmers were there, but I didn’t know who they were. And, if I did, I had to work with 20 or 30 of them individually.
So you thought of the idea, then what did you do to make it happen? What were some of the first things you did?
Nothing about it was, “Hey, let’s start a company and build this thing.” I was like, “How do we have our cake and eat it, too.” We wanted the convenience of working with distributors, but we also wanted the food coming from local farmers. What we did was we put a process in place that actually ended up being the first version of WhatsGood.
We created a very simple way of locating all of the different farmers and food producers in one place using basically an Excel sheet. It took me going to farmer’s markets around this area and meeting some of the different food producers there and finding a few for each category of products that we needed: A couple of meat producers. A couple of seafood. A couple of artisanal products. Different veggie growers.
Then we trained them to work with this system. Over the course of a season, here, in Rhode Island, we’re highly seasonal in terms of the food service business. Most of our business happens between May and September. We lined it up in an off-season. We talked to farmers and food producers. We already had some networks that we could tap into. We got them to start using what was, at that time, the first version of WhatsGood.
Through that season, we found that some of my friends and some people that were also chefs wanted to also be able to buy local. We started letting them use it. Then we had more farmers come on board. It just manifested on its own. We decided that we would really try to build some technology to make it really a usable product for others. At that time, it was just as best as we could put it together with some bubble gum and duct tape.
Were you doing this yourself in a pretty low key fashion or did you have some friends who were maybe involved? Who could put together more of a technical plan in this very early stage?
One of the chefs I was working with at Jamestown Fish had a son who was, I think he was only 20 at the time. He is now one of my co-founders, William Araújo. I met Will at the restaurant. I had already had this idea to make it easier to work with the local producers.
We put together what we could ourselves and then we actually had a friend of ours that had this coding background and technical background to help us build a first version of it from there.
It seems like the idea became such a win-win because, like you were saying, restaurants want local, fresh food and farmers want to be able to sell their product in as easy of a way as possible.
Right. The problem was just that the farmers want to farm and the chefs want to cook. Neither one of them really wants to be a salesperson or a forager, let’s say. I loved going out and meeting the farmers. Don’t get me wrong. In the restaurant game, especially during the type of seasons we have, I just don’t have that extra time. I mean, I’m running my restaurant until 2 AM in the morning. I’m back at work at 10:30, 11:00 the next day. Where am I fitting in time to go to a farm?
On the other side, it was the same thing. The farmers just don’t have that extra time to go around trying to get new accounts. Every once in a while I’d have a farmer show up at the back door and say, “Hey, I grow tomatoes. Do you want to buy some?” That was great, but it wasn’t many of them. It certainly wouldn’t help us source an entire menu.
We were after really holistically changing our menu to be entirely local. The value proposition was really based on that. The idea ultimately was a wholesale eBay for local food.
When you built it out and really started to focus on it, how did you get funding? I saw you got about $1m.
One of the investors at Jamestown Fish, one of the owners, heard and saw what we were doing while I was at Fish, and really encouraged us to go out and build WhatsGood. He invested some early seed. We raised…about $1.1 million in our initial seed funding, and we were able to get, really what we call our MVP, we were able to get that out in early 2015. By spring of 2015, we had the first version of WhatsGood that was ready for outside users to try.
How quick did you get people to get involved and sign up for it? Both on the producer side and restaurant side?
We had that first version in May of 2015. I think by just before the fall of 2015 we had over 100 farmers and food producers already on the platform and in the marketplace. We were connecting about 50 different wholesale buyers to the platform at that time. It moved fairly quickly.
How did you figure out what was the best way to grow and scale in those early days?
The best way was by leveraging the networks that already existed. The networks on the farmer/vendor side primarily existed, and we found farmers markets to be a great way to really meet and recruit groups of farmers and food producers. They were all there at one time. So I was going to a lot of farmers markets.
Then the process there was we wanted to ensure the integrity of where your food was coming from. That was a very important reason why we visited and still visit every vendor that comes onboard WhatsGood.
Then on the buyer’s side, it was more or less learning how to market directly to wholesale food buyers, other chefs like me. I found that fairly easy because I was really trying to get in touch with myself and find other chefs out there that were like us. We geared our marketing strategy towards that.
How did you reach out to the other chefs? Was it a lot of cold calls, cold emails, or things like that?
Not at first. We started outreach, really that process, maybe a year later. At first, it was really just leveraging my network. I had gone to Johnson & Wales and I had a good network of young chefs that had come out of the school. The food community and kitchens just are really well connected.
About how much did you make in revenue that first year?
It wasn’t much. We weren’t even really charging anything at all to get the platform out there. Then, our model was heavily based on transaction. That’s how it was set up. Farmers could come on for free and buyers could come on for free. Then we would collect a small percentage of the transaction.
I think it was in the first two years we booked about $1m in revenue.
Is that how the business model still works? That y’all make money essentially on transaction fees?
That’s correct. We’ve got a variety of other things that are in there now, but that’s the meat and potatoes primary way.
About how many people are on the platform now? About how many do you have in terms of the producers and buyers?
Today we’ve got about 2,000 farmers and food vendors on the platform now. We’ve got about the same amount of wholesale buyers. From the beginning of connecting those two groups, we evolved within that next year to also work with institutions like colleges and public schools and universities and things like that.
Then we grew further in the past two years to work with consumers as well. Today, WhatsGood really is a virtual farmers market and delivery service. We connect about 20,000 consumers to the platform currently. We’re actively doing deliveries in Boston, Rhode Island, and the Virginia-D.C. markets.
It sounds like you’re a virtual food share program.
Yeah. The CSA boxes and those types of services evolved on their own with individual vendors for the most part over the course of the last 15 years. I would say the difference is that we don’t have an autonomous box per se. You order a la carte. You order what you want. You could order a dozen eggs or you could order 50 pounds of produce. It’s up to you really what you want to buy.
We take the Instacart model where you could go online and you could buy your groceries and have them delivered and we pair that with the farmers markets. It’s really taking the e-commerce and delivery services of today’s consumer expectations and pairing them with the farmers and food producers’ model that really exists at farmers markets.
Deliveries can happen in people’s homes or offices. Then we also partner with community locations like gyms and breweries and Crossfit and yoga, where consumers can choose to have their product to and go pick up there.
What is your percentage of revenue between individual customers and wholesale buyers like the restaurants?
It’s constantly changing. Wholesale buyers, they generally represent much larger volumes of purchases at one time, while consumers are obviously not purchasing nearly as much for their families or themselves. In terms of overall breakdown, we’re at about a 75% to 25% split at this point, with consumers being 75%. But that’s really changing. A couple of months ago, it would have been more like 50/50. But the consumer segment is growing faster than the wholesale segment right now.
You started out with the first idea of pairing farmers with wholesale buyers and with the larger restaurants. Then you moved on to also getting public schools and universities. Then you moved on a little bit more to have more of the individual consumer segment. It just seems like it was a pretty smart growth plan. I wondered did you have this grand vision at the beginning or did it just kind of happen gradually?
No, it definitely wasn’t where we saw it going in the beginning. At least I didn’t really consider the consumer element, the retail element, to begin with. What started to happen was, number one, we saw the need for logistics and distribution to aggregate all of the products for the buyer.
On the wholesale side, this is particularly difficult because of, not only the volume, but the licenses and the elements that go into wholesale distribution. The volume just means that you need really big warehouses and you need trucks and you need all of those things that go into that model.
On the consumer side, at the same time, I was a consumer myself, and so was most of my team. We were all about buying local products, but found that the current model for consumers was not inherently aligned with our lives and how we do things. As much fun as it is going to a farmers market on Saturday morning, I’ve got three kids. My wife and I both work with the company. We’re real busy. On Saturday morning, we can’t always make it. We had that inherent feeling throughout the team.
What do you see in the future? What do you hope to do more as the company grows?
We’re planning on launching in many more cities in the coming year, two years. That’s the plan. We’ve developed a warehouse-ish club and aggregation model that can operate just about anywhere. It doesn’t require an expensive warehouse or a fleet of trucks. It’s a model that we’ve been perfecting here in Rhode Island. We tested it for growth in Boston and then we further validated how we would do that with the Virginia-D.C. market expansion.
In the future, I see us really leveraging our network through partnerships to launch more WhatsGood delivery hubs in more markets. We have quite a long list of what markets it will be. Over the next 12 to 24 months, that’s the primary objective.
When you look back, what do you think has been the biggest key to growth and your success?
I think it’s probably not having set-in-stone operating guidelines. I think staying fluid and dynamic in our approach, with an open mind to how things might actually work is a pretty big element of that and the reason why this has been successful so far.
I think if we had just been beholden or tied ourselves to this is what we’re going to do and only what we’re going to do, I don’t think we would have found the successes that we’ve found.
And bringing technology to a group like farmers and food producers is not an easy thing to do. Getting them to adopt it and use it is definitely not an easy thing to do. I think it’s probably the most distinguishing attribute that we have is that we’ve been able to do that.
Some of it is a bit of secret sauce, but most of it is just being honest and trustworthy and upfront with the farmers. I think having the element that we’re coming from the industry ourselves has really helped us a lot in that arena.