Brendan: Welcome to Episode 9 of the Australian Health and Safety Business Podcast. I’m Brendan Torazzi, the director of OHS.com.au and also the host of this program. We’re working towards building Australia’s first online health and safety marketplace. Today, I’m joined by Dave Malcolm from Marley Spoon.
Dave: I’m really good Brendan, how are you?
Brendan: Great, thanks. We’ve come out this morning to the DC Center at Strathfield. Tell us a little bit about Marley Spoon, what you do Dave?
Dave: Marley Spoon is a meal kit delivery business. What that means for customers is that we design 12 new recipes every week. Our customers and subscribers can go online and choose what they want to eat and then we deliver these fresh ingredients and recipes to their homes so they can cook meals at home.
Brendan: How long is the business been going for?
Dave: We launched Marley Spoon in Australia in the middle of 2015 as a sort of a true start-up so we’re quite young as a business and we've been scaling ever since so about three and a half years old.
Brendan: Were you first in the marketplace in Australia or tell us a little bit about you found out about this concept?
Dave: Marley Spoon actually exists and was sort of ideated in Germany. We operate in six countries globally including the US. Australia currently being the largest market. Over in Australia there are some other competitors in the landscape so we're essentially a fast follower. Our competitors launched maybe three years ahead of us and then we came into the market with a slightly different customer proposition.
Brendan: Out here this morning there’s lots of safety signs everywhere and it was quite strict in the way that we got the tour around the factory this morning. How has it changed over the last three and half years? Has it changed?
Dave: When you have a food business and you're developing a product which you're shipping into customer's kitchens week in and week out so food safety, quality assurance is of paramount importance in everything we do. It’s absolutely essential that customers trust us to deliver not only amazing ingredients, high quality produce that they couldn’t procure themselves and delicious recipes but everything has to be safe. When you're dealing with proteins like your chickens and things need to be shipped and maintained in a cool chain from the producer right the way through the manufacturing process into the logistical final mile to the home food safety is very important. It’s always been very high in our priorities. Apart from just the consumer food safety we obviously have a big facility here that you've just been around. There’s forklifts and racking and all of the usual things that you'd expect to see. Looking after our staff and employees is highly important as well. We take it very seriously and as I hope you'd expect from anyone that is supplying you food.
Brendan: You've recently taken the business into the public arena. In other words you've launched it on the stock market. What was the reason for that?
Dave: I think fast growth start-ups require a lot of capital. Food is expensive as anyone that goes and purchases groceries in the traditional way requires. When you're scaling a business obviously to reach profitability we need financial capital and you've seen the FC, the Fulfilment Center today. Automation and driving efficiency through that platform is critical and that requires investment. That is the main reason and of course funds will go into marketing and helping grow the business as well. It’s an essential part of growing a business.
Brendan: I’m not sure how many of the numbers you can share with us but tell us the year on year growth like you were telling me a story just now when you started just three and a half years ago you were personally hand picking the boxes and buying the stuff from Cole's.
Dave: It's nice to reminisce. We used to operate out a very tiny facility for a short period of time. When we launched the business, there was myself, Ralph Weber, my business partner, Chef Olivia Andrews. We sort of tasked with launching the Australian business. We went from shipping one box to 10 box to a hundred box to tens of thousands of boxes every month. The growth has been phenomenal. It’s continuing to move in the right direction.
Brendan: Customers as I understand have a complete flexibility over their meal choices. Tell me a little bit about how that works, how the customers choose what they want?
Dave: This is the magic really I think behind the scenes. What we try and offer, what we do offer is 12 new recipes every week to our customers and they can go online and select exactly what they want to eat from a variety, from a menu if you will. In preparing that there's obviously quite a long ideation phase from when the culinary team decide what they want to present to the customer. Then we have to procure that, forecast for it, obviously test those dishes in our test kitchen and then it comes in and gets produced and sent out. Every week we present to our customers what we believe they want and if they want to amend their dishes they can go online and simply select whatever they want to receive. It just turns up at their house and they can cook it. The idea from a customer side is it's incredibly simple but obviously from a procurement and production aspect it's quite the opposite. It’s very complicated.
Brendan: Do you find that customers would, do they supplement the Marley Spoon offering like for example it's kind of like eating out at home what you're doing like it’s something special but do the people do it night in night out or do they tend to do other stuff as well?
Dave: The majority of people who use Marley Spoon cook with it three nights a week. That tends to be the sweet spot. Families are a bit more. We’ve recently actually tried introducing breakfast options as well. The idea is to alleviate that mid-week cooking stress. Four o'clock every afternoon you’re trying to decide with your partner or housemates what are we having for dinner and we get rid of that problem for you. It becomes part of people's routine. We’re a flexible subscription business. The idea is that people use us week in, week out but of course when people are away they may pause.
Brendan: How many nights a week do you eat Marley Spoon?
Dave: I’m very lucky because I eat Marley Spoon all day at work because all the test dishes arrive at a table in the middle of the office but I subscribe three nights a week.
Brendan: I was going to ask are there sometimes some things outside of your control that maybe would affect I don’t know, the quality of the food or tell me a little bit about obviously things do go wrong sometimes for all businesses. Can you think of a time where how you had to change or react or modify the way you operate?
Dave: You're right. There are always challenges in every business. I mean there are easy ones to isolate. We might forget to put something in a box for example. We solved that with FSQA so and checking and automation but there's bigger things which I think are probably more interesting outside of the operational things to look at. In Australia we're currently having a drought and it's very important to forecast exactly how much beef we procure. We look at long range forecasting and pricing. It’s important that we also present the same price to the customer. There’s no variation in the product offering. These are challenges that we have to absorb within the business through really robust planning, forecasting and data analytics to understand how these external impacts such as the weather are actually going to affect our customer base. We would never ship anything that is below our standard in terms of quality of food. There’s very rigid testing when our producers ship to us in terms of temperature, quality in line with the expectations of our customers.
Brendan: I’m curious the team that come up with recipes you have a kitchen where they're whipping up this stuff in the background or how do they come up with the ideas and how is it tested before you release it to market?
Dave: We actually do that in another facility in Sydney actually in our support office which is where all the other business functions are. We do have a big kitchen in the middle of the office that also functions as a photo studio where we shoot all of our content as well for the recipe cards. We've got a team of very talented recipe writers who all work for Marley Spoon and they come up with great ideas and then they speak to the procurement team to insure that the ingredients they want are in season and can be sourced sustainably. They test cook them and we eat them. They get the thumbs and they get presented to the customers but that whole process can take several months.
Brendan: You’re planning how many months in advance on your meals?
Dave: On average maybe 12 weeks ahead of schedule. Then of course we plan the seasonality and sustainability. It’s very important that we have a business that is environmentally focused as well. We work with the cadence of the suppliers so for example with salmon, the fisheries will decrease supply in certain times of the year. We slot in to all of that to make sure that we're delivering a sustainable product from end to end so the whole supply chain is managed in that way.
Brendan: Does that mean that the supply chain is changing every quarter. Obviously you have people that provide staple ingredients but...
Dave: We develop very close relationships with key suppliers. That doesn’t change so much but the complexity of their business means that it's constantly in flux. Our procurement and culinary team have massive jobs.
Brendan: How many staff are you up to now?
Dave: I think we're just shy of 300 in Australia. Obviously a lot of that workforce is in the fulfilment centers. Then we have the other functions which work on what we call the promise side of the business, marketing, PR and all of those sort of in house functions. That has grown quite rapidly from the initial three over quite a short period of time.
Brendan: From three to 300 in three and a half years. You’ve got a lot of threes happening Dave.
Dave: It could be lucky.
Brendan: That is amazing. You were telling me or you were showing me about the Dinnerly brand. Tell me that is an offshoot of Marley Spoon or a sister or a cousin?
Dave: The easiest way to think about Dinnerly is that it's for the more cost conscious consumer. For an Australian reference it's kind of like Jetstar to Qantas if you want to make that sort of brand analogy. The way we achieve the low cost is that we have the same suppliers, the same produce so the quality is still top notch but we eliminate some of the niceties. For example we don’t back the dishes into individual dish bags. We save on cost operationally but again same product in terms recipes delivered to your door for you to cook at home just at a lower cost point which is significantly cheaper than you could procure those ingredients at the supermarket. An incredible offering particularly for families.
Brendan: It still gives you that creative outlet of being able to cook for yourself but you don’t have to do it. Someone else is doing the shopping and the sourcing for you.
Dave: We love cooking and it's not about delivering you take away. It’s very healthy for families to cook at home. People enjoy cooking. You still have to put it together.
Brendan: You’re not providing chefs yet.
Dave: No, unfortunately not but that is half the fun cooking with the family.
Brendan: What are the plans from here? You've obviously have this incredible growth story around food over the last three and a half years. What are the plans for the future?
Dave: I think obviously we have big aspirations in terms of feeding as many people as we can within Australia and the other territories that we operate in. I think the ambition is to continue to serve delicious food to as many people as possible whilst maintaining their supply chain for a waste free world. There’s still a small percentage of people that have used meal kits. A lot of people still shop at the supermarkets. My personal ambition probably more so than the company's is to move people away from this kind of archaic way of shopping which is very wasteful and delivers a lot of pre consumer and consumer food waste. I mean I don’t know if you know that one in five shopping bags that everyone purchases gets thrown away. The latest statistics from OzHarvest prove that. I think we want to continue growing our business whilst remaining waste free. We had zero food waste from day one due to the way we manage our supply chain. That is our sort of mission.
Brendan: We have listeners from all over the country. What areas do you deliver to?
Dave: We deliver all down the east coast, major cities. We’re not in the Northern Territory or WA. We’re not in Perth yet but we deliver down South Australia to Adelaide as well, Canberra, Sydney, Brisbane and everywhere in between. We’re not in Tasmania yet for you Tasmania listeners although some of our produce does come from there but we'll be expanding geographically as well over the short to near term.
Brendan: When you say major cities pretty much any one on the East Coast even if you're in a regional area?
Dave: The easiest way to check is to visit the website and punch in your post code. It’s pretty extensive so I think we cover about 65% of the population.
Brendan: Is that how it's all expanding? Is it word of mouth? Tell me a little bit about how you're growing.
Dave: We have a very talented marketing team. You might see us on TV or on buses. We market direct to consumers but I mean because people enjoy the product and when they change their way of living and they understand the kind of value proposition of getting food delivered to their home we get great word of mouth, lots of referrals and of course that is a great way to grow your business through word of mouth. We strongly encourage people to talk about Marley Spoon.
Brendan: I’ll just ask some questions to wrap up the interview. I did have actually one other question. Thinking about health and safety as the company grows do you think that it will change more or is it just more of human resources to manage? You talked about automation.
Dave: When it comes to food safety and quality assurance there are strict guidelines in place in Australia which we adhere to. We’re scrutinized as expected and we passed these tests. I think we want to be compliant and exceed all standards that would be expect from a business such as ours. We’re already there as a safe business but of course as you grow and add more people it's always a priority.
Brendan: Does that mean that you're getting regular visits say from New South Wales Food Authority to keep an eye on what you're doing and hopefully add some value wherever they can?
Dave: We want to work with people as closely as possible and like we said earlier when you have a business when you're asking for consumer trust you want to work very closely with the authorities to insure that you're delivering the highest quality possible.
Brendan: How old are you now?
Dave: I’m 42.
Brendan: What do you do to keep fit?
Dave: I love long distance running so ultramarathon running and going to the gym when I can.
Brendan: I mentioned to you before I don’t know how you sleep at night. How many hours sleep do you get per night?
Dave: I’ve really started to prioritize sleep actually. I’m not a great sleeper but I’ve got a nine year old son. I try to go to bed fairly soon after him. I work with an international team so I have lots of global conversations as well but I try and get eight hours.
Brendan: You talked a little bit about your personal goals but what are you looking to achieve personally in the next 12 months?
Dave: I think continuing to be a better entrepreneur, be more organized, be more efficient. There’s constant improvement that you can do on yourself as well as your business. I think the biggest challenge for people to work in businesses that are growing rapidly and all entrepreneurs as well is maintaining your health because it's very easy to get sucked in and work nonstop. Personally I think boundary setting would be a good one for me.
Brendan: Finally what business achievement would you like to be most remembered for?
Dave: I’ve never really thought about that personally because as you've seen by the volume of people we have here it's just a massive team effort but I really enjoy working with my team so I think anything around building high performance teams as well I’d like to sort of associate myself with.
Brendan: If people want to find out a little bit more about Marley Spoon and Dinnerly where can they find you?
Dave: I’m very easy to find online at MarleySpoon.com.au or Dinnerly.com.au. If anyone wants to reach out to me you can find me on LinkedIn quite easily.
Brendan: That is fantastic. If you're enjoying these podcasts make sure that you subscribe and share it around. We look forward to speaking to you next time on the health and safety podcast.