Year-old North American food subscription startup MealPal has marked its first foray into international markets by launching in Sydney this week and says there’s plenty of room in the Australian market for more food startups.
MealPal offers a monthly paid subscription service aimed at busy inner-city professionals, which provides subscribers with one dish per day at nearby partnered restaurants, which can be purchased at a cheaper rate than if it were ordered in-store.
The startup has already signed up more than 100 restaurants and food outlets in Sydney’s CBD, which will be providing MealPal members with lunches for less than $8 a meal. Among the brands already in the MealPal network are Guzman Y Gomez, Fratelli Famous and Zeus Street Greek.
MealPal co-founder and chief executive Mary Biggins, who co-founded fitness industry startup ClassPass, told StartupSmart while the service is aimed at making lunch cheaper and more efficient for customers, restaurants benefit from reduced preparation time and labour costs through receiving bulk orders for just one dish.
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“We buy meals in aggregate from our partnered restaurants, and it’s only one meal per day. Because we’re ordering a lot of those meals, they can make them more efficiently than if they were making individual orders for customers to purchase,” Biggins says.
Biggins founded MealPal with co-founder Katie Ghelli in January 2016, launching initially out of bustling Miami and expanding to eight other US cities. The expansion Down Under comes off the back of a $US15 million ($19.9 million) capital raise in February this year, which has been used to fuel the startup’s expansion into the Australian market.
Choosing Australia out of the hundreds of other viable international markets was due to the country’s “melting pot of cuisines”, says Biggins, who adds that a region’s culture around food is the most important choice for the startup when considering expansion.
“Australia has so many influences from Asia, Europe, and so many people who appreciate delicious food along with so many different restaurant options,” Biggins says.
Melbourne launch to follow
MealPal is already looking at expanding into other Australian capital cities, and while the company couldn’t provide a strict timeframe for when this will happen, Biggins says a Melbourne launch is on the cards for 2017.
“We’re first focused on expanding to different neighbourhoods in the Sydney region, like Northern Sydney,” she says.
With MealPal’s origins stemming from densely populated American regions such as Miami, New York, Washington DC, and Philadelphia, sparsely populated Australia could prove more of a challenge. However, Biggins is confident MealPal can benefit regional areas as well.
“Densely populated cities are certainly the easiest areas to launch due to the high concentration of restaurants, but we think Mealpal can help out more spread out regional areas too,” she says.
The Australian market is no stranger to food-focused startups, with the likes of Foodora, Deliveroo, Menulog, and UberEats dominating the delivery market. Biggins isn’t deterred by the level of competition, believing MealPal’s value to consumers is enough of a difference to not encroach on the market space of the delivery startups.
“We think the value the consumer gets from MealPal is really different to what they get from a delivery service. We think of it as a day-to-day solution at an overall cheaper price compared to spending on getting food delivered,” she says.
Making their first international expansion was a “fun challenge” for Biggins and her team, which took the approach of getting a strong local team established before pushing ahead. The company enlisted the help of two experienced executives knowledgeable about the local market, but the 14-hour time difference meant “a lot of Skype calls” were involved in the process.
“It’s definitely beneficial to hire a local team first and to spend a lot of time with that team and making sure both you and them understand the market well,” Biggins says.
“It’s been a challenge, but a fun challenge. We’ve found our product to be relevant to people all over the world, because everyone has to eat lunch.”