Meal-delivery startup Munchery has been in the news a lot lately, predominately for a host of reasons unlikely to please its many investors and employees — think millions of dollars in losses per month and an ongoing effort to replace CEO Tri Tran. However, the company finally had a moment of good news yesterday when it announced it had landed on a new CEO. But that reprieve was to be a temporary one, as the hire was quickly overshadowed by a report from Bloomberg that for almost two years roughly 16 percent of the food produced at Munchery's San Francisco kitchen went unsold — and employees within the company are crying foul.
We first learned last month that Munchery was looking to replace then-CEO Tran. His tenure at the company has coincided with allegations of questionable food safety practices, neighbor complaints, and code violations, and it was perhaps hoped that a new CEO could address these problems while making the company profitable.
The new CEO, James Beriker, was previously CEO of job site Simply Hired, and in a statement promised to grow the company. "[Munchery's] unique end-to-end model, integrating the complex chain of customer acquisition, food production and delivery, and bolstered by having direct relationships with customers, will provide ongoing opportunities to learn and refine the value proposition and drive margin expansion as we grow the business," said Beriker. "Tri, Conrad and team have built a robust platform— and I'm honored to lead the company through this next growth phase."
Beriker's sunny corporate-speak belies what may be a more troubled reality, however, as Bloomberg tells us that Munchery is aggressively pressuring cooks to lower costs and spending huge amounts of money on marketing all the while consistently overproducing food in hopes of being ready for an ever around-the-corner onslaught of new customers. Between September 2014 and July 2016 alone the SF kitchen reportedly made roughly 653,400 extra dishes that, according to employees, ended up being tossed or donated. That number comes from leaked internal documents obtained by the publication, and is higher than the standard restaurant food waste of approximately 4 to 10 percent.
Munchery, for its part, denies that it wastes food. "Munchery doesn’t waste food," a spokesperson said in a statement to the Business Times. "Anything not sold is donated at the end of each day to organizations that deliver them to the homeless and other residents in need. We take deep pride in this."
Meanwhile, former Munchery's Chief Customer Experience Officer Pascal Rigo told Bloomberg that things at the company aren't really as rosy as executives present to investors and employees. "It was very difficult to be part of a company [where] I felt some members of the executive team were not telling the entire story to employees or investors," he said. "I'm very surprised that some statements from some large investors or members of the executive team are not challenged by anyone, including the press," he added. "Being a private company does not force you to show your actual numbers, but I do not believe that it is a ticket to embellish them either."
This sentiment was echoed by current employees who wished to remain anonymous, suggesting that Beriker has his work cut out for him. However, if he can't make the company profitable, it may soon go the way of one-time competitor SpoonRocket — rendering the entire conversation around food waste and employee satisfaction moot.