AI Is Whipping Up Your Next Meal, and Hungryroot Is Cashing In
Imagine this: you’re tired of planning meals for your picky family, and you can’t seem to find the time or energy to accommodate everyone’s dietary restrictions. Well, enter Hungryroot, an online grocer and meal delivery company that’s letting artificial intelligence (AI) take the reins and choose your meals for you.
Since its rebrand in 2019, Hungryroot has been using AI to personalize orders for its customers, selecting 70% of their purchases. With a whopping 600 SKUs on offer, this company has a vast selection of grocery items and recipes. And guess what? This AI-driven approach has caused its revenue to grow 50% YoY to $250 million in 2022.
Hungryroot’s AI: The Secret Sauce to Success
Alex Weinstein, Hungryroot’s chief digital officer, credits AI for being “directly responsible for hundreds of millions of dollars in our sales.”In Q1 alone, the company’s revenue rose 84% YoY to $93 million.
Launched in 2015 as a CPG company with just six SKUs, Hungryroot transformed in 2019 to solve the problem of planning healthy meals. Nowadays, customers can find typical grocery items and creative recipes like lemongrass tofu curry rice bowls or gingery roast salmon super grains on its platform.
So, how does this AI magic work? It all starts with a quiz. As customers sign up, they take a 20-question quiz to help Hungryroot understand their meal preferences. The company then assembles a cart of groceries and recipes based on these answers, which customers can edit to their heart’s content.
Weinstein explains that the company is very clear about the benefits of sharing dietary information with them. As customers offer more data, Hungryroot is able to take a bigger slice of their grocery budgets. In fact, the average basket size is $125 per box.
Data-Driven Decisions and AI Advantages
This customer data not only helps make accurate recommendations, but it also informs what recipes or food products to add. For example, when Hungryroot learned that customers were buying kid’s food elsewhere, they expanded their offerings to include children’s products.
Nick Amabile, CEO and chief consulting officer at data consultancy firm DAS42, believes AI can be especially helpful for retailers and marketplaces with a wide array of SKUs, as it can help surface relevant products to consumers. However, he emphasizes the importance of accurate and trusted data before letting AI “loose.”
In-House AI: Hungryroot’s Competitive Edge
Weinstein sees Hungryroot’s in-house AI development, handled by a team of 55 employees, as a competitive advantage. He firmly believes that outsourcing isn’t the way to go when it comes to being the best in the world at something.
And they’re not done yet. Weinstein reveals that Hungryroot is exploring the potential of natural language processing tools like ChatGPT to further improve customer experiences.
In short, Hungryroot’s AI-driven approach is a prime example of how technology can revolutionize the way we shop, plan, and eat. It’s safe to say that AI is cooking up something big in the world of grocery shopping and meal planning.
