Meallogix raises $1.7m for food prep ERP software

A lot of work goes into the prepared meals you order online and have delivered to your door or desk. From developing recipes and organizing orders to buying ingredients at the right price, it’s easy to miss out on cost savings or to identify efficiency issues, according to Meallogix CEO Ted Stearns.

“Most meal prep services are started with one or two individuals. The barrier to entry for them is very low,” he told AFN.

“They start out with a couple of hundred bucks in their kitchen. But they have so many challenges.”

Meallogix recently announced $1.7 million in pre-Series A funding led by Tech Coast Angels, with participation from Spark Growth Ventures. The deal brings the startup’s total funding to $3 million.

The San Diego-based startup will use the capital to enhance its front-end and back-end enterprise resource planning (ERP) software, while also reaching into new markets across the US. It also plans to launch an online learning platform specific to the meal preparation segment.

Meallogix’s founders started with a minimum viable product version of their meal prep ERP software in July 2020 that gained quick traction. Word soon spread, according to Stearns, eventually leading to a partnership with food delivery app DoorDash.

Fifty million people use a meal prep service — such as an online restaurant, dark kitchen, or partially prepared meal kit service — according to market research firm Nielsen. The sector was worth $1.6 billion in 2016, leaping to $4.65 billion in 2017. By 2022, Nielsen predicts it’ll be worth $11.6 billion. Some of the main factors driving meal-prep popularity are convenience and the ability to tailor your meals to specific dietary needs such as gluten-free, plant-based, and paleo.

The Covid-19 pandemic has also reinvigorated interest in meal kit delivery, as stuck-at-home consumers look to avoid the shops and expand their culinary skills. 

“Twenty-three million consumers in the US are buying prepared meals. If HelloFresh and Blue Apron and other big names have 7 million customers, where are the other 16 million getting their meals from? The answer is independently owned and operated meal-prep businesses,” Stearns said.

There are thousands of smaller companies pre-preparing meals across the US, and many of them lack the internal infrastructure to operate at their optimal scale. This leads to inefficiency, lost earnings, and other day-to-day headaches; this is where Meallogix steps in.

“They’re going from using sheets of paper and pencils, maybe spreadsheets if they’re sophisticated, to migrating it to one platform that handles all of the transactional components of the supply chain for them,” Stearns said.

Its primary customers are meal preparation companies with less than 10 employees, he added. Stearns views this demographic as needing Meallogix the most because they tend to be unable to access venture financing like larger outfits.

Prepared meals with a side of data

The heart of Meallogix’s offering is digitalization of every step of the meal preparation process. This includes many of the manual tasks that take time and are prone to human error – such as order intake, ingredient conversion, nutrition label creation, shopping list creation, recipe costing, and delivery options.

Meallogix provides a e-commerce platform where customers can place orders, plus a back-end platform that manages everything for the company that prepares the food they’ve ordered. The platform instantly creates shopping lists based on the number of orders placed, shaving substantial time off the traditional process.

It also operates as a marketplace for its enterprise users, putting them in touch with suppliers that can offer cheaper prices than traditional retail channels and saving them as much as 15% on ingredients costs. Stearns compared it to Priceline.com, which helps consumers find the cheapest airplane tickets and hotel stays possible by aggregating multiple options from third parties.

Another useful feature of the Meallogix platform is its ability to calculate how much profit each meal option is making for its enterprise users.

“What we’re able to do is say the chicken cacciatore profit margin was 72%, whereas the pulled pork sandwich was only 10%. We can give them the insights they need to actually run their business,” Stearns said.

“Right now we have more than 400 customers on the waitlist who are chomping at the bit to get on the Version 2.0 release of the platform, which will take place over the next two months. We’ll bring 20,000 to 30,000 customers onto the platform.”