Hungry Route, an online grocery store and meal delivery company, is letting artificial intelligence (AI) choose its customers’ next meal.
At Hungryroot, AI selects 70% of what customers buy. Since the company rebranded itself as an online grocery subscription service in 2019, Hungryroot has leveraged his AI to personalize customer orders. With 600 of his SKUs, the company offers a huge selection of groceries and recipes.
Over the last few months, AI and AI tools like ChatGPT have dominated the headlines due to their potential cost and time savings. For Hungryroot, AI can now deliver personalized shopping experiences at scale. The company said this helped push its 2022 sales to $250 million, up 50% from a year earlier, as its meal kit and online grocery competitors struggled to survive.
“Today, AI is 70% of our revenue. It is directly responsible for hundreds of millions of dollars in our sales,” said Alex Weinstein, Chief Digital Officer at Hungry Route . “We often hear from our customers that it takes hours to plan meals for their family, especially if they have dietary restrictions or picky eaters.” Hungry Route in Q1 Revenue was $93 million, up 84% year-over-year.
The current version of Hungryroot was released in 2019 to solve the pain points of planning healthy meals. The company was originally a consumer packaged goods company with six of his SKUs, including sauces and veggie-based noodles, when he founded in 2015. At Hungryroot you can buy typical groceries such as produce, condiments and bread. Recipes offered by the company include Lemongrass Tofu Curry Rice Bowl, Ginger Grilled Salmon Super Grains, and classic Chili Limon Chicken Tacos.
From the moment shoppers sign up for Hungry Route accounts, they are required to answer a quiz containing up to 20 questions, which helps the company identify their customers’ dietary preferences. The company then assembles carts full of groceries and recipes based on quizzes, which shoppers can edit to get exactly what they want. The company also asks repeated questions after receiving each box to figure out if they liked the recipes and groceries they received.
Hungryroot asks customers about their food allergies, health goals, and culinary preferences during signup. Weinstein said Hungry Root makes a big chunk of its grocery budget through the data it captures about its customers. The average Hungryroot basket size is $125 per box.
Weinstein said the company has made it clear that it benefits shoppers to share their eating information. “This is to make our communication clear and our customers understand our incentives,” he said. “When you look at our messages and quizzes, you can see that we’re open about helping our customers understand what we do and why we ask these questions. .”
The data Hungryroot obtains from its customers not only helps it make accurate recommendations, but also informs what recipes and foods to add. For example, Hungry Route learned that its customers were buying children’s food at another retailer and decided to expand its coverage to include children’s and baby products.
Nick Amabile, CEO and chief consulting officer of data consulting firm DAS42, said AI could certainly help retailers and markets with a wide range of SKUs. He added that AI can help present relevant products to consumers.
“Accuracy depends on how the model is trained and how the model is developed,” said Amabile. “Before letting AI run wild, it is very important to ensure reliable and accurate data in control.”
All of Hungryroot’s AI efforts are in-house, which Weinstein said is a competitive advantage for the company. The company’s digital team working on his AI capabilities consists of about 55 employees.
“We strongly believe that if you want to be the best in the world at something, you can’t outsource it,” Weinstein said. “This is very core to us.”
The company has already integrated AI into its business, but the emergence of natural language processing tools like ChatGPT could improve the customer experience, Weinstein said. He added that Hungry Route is already looking at ideas on how this could be implemented into its own operations.
“We are focused on better understanding our customers through data,” he said. “We have been on this journey for many years, but there is still so much to do and so much more value to create.”
