SunBasket - February 2021

CUSTOMIZABLE SUSTAINABLE DELICIOUS IN ASSOCIATION WITH

SUN BASKET

DIGITAL REPORT 2021

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CUSTOMIZABLE SUSTAINABLE DELICIOUS

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SUN BASKET

Mike Wargocki and Michael Thompson discuss Sun Basket’s unique approach to delivering healthy, customizable, and delicious food

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he COVID-19 pandemic has had a dramatic impact on the way we all live, work, spend money and eat. Forced inside by wide-

spread lockdowns and social distancing measures, people are increasingly turning to online services to secure their basic needs. At a stressful time like this, 04

the value of healthy, convenient, sustainable food is more apparent than ever. For California-based meal kit delivery service Sun Basket, 2020 has been a year of unprecedented challenges and opportunity.

“Our business essentially doubled in three weeks during that initial spike,” says Michael Thompson, Vice President of Supply Chain and Business Integration at Sun Basket. “We basically found ourselves in a position where we suddenly stopped being a convenience and became more of an essential service for a lot of our customers.”

Sun Basket was founded in 2014 by award-winning chef Justine Kelly and Adam Zbar, Tyler MacNiven and George Nachtrieb – a trio of tech entrepreneurs looking to marry the convenience of on-demand, subscription-based food delivery with restaurant-quality cuisine tailored to suit every diet.

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Stafni that momov just-in-timo with you We rebuilt temp stafng to reliably yex with your business. With our nationwide network of 600,000 pre-vetted workers, get the labor you need, even on short notice.

Trusted by thousands of businesses like Š 2020 Instawork. All Rights Reserved.

Talent acquisition in trying times: T:e Cnsta9or8 met:oNology ike Bohnett, VP of Sales and Partnerships at Instawork, and Mike Wargocki, VP of Manufacturing at Sun Basket, discuss its staffing partnership.

At a time when workforce reliability, workplace safety and job security are all being afected by COVID-19, companies are starting to feel the pressure. Addressing these problems through technology that is revolutionising talent acquisition, Instawork ofers a centralised platform that connects businesses with proven professionals in real-time.

“Instawork is a yexible stafng solution for warehouse manufacturing, food production, and hospitality-based workers,” explains Mike Bohnett, Vice President of Sales and Partnerships. “At heart, we re a tech company that is aiming to rebuild how stafng works, to better meet the needs of both companies and today s hourly workforce.

Fundamentally, we believe that stafng g and speci+cally temporary stafng is broken. hrough the Instawork platform, workers can easily pick up shifts and get paid quickly afterwards, and they receive reviews from employers, which ups their credibility for any other potential gigs.”

An excellent example of Instawork in action is the company s close collaboration with Sun Basket, the San Francisco-based subscription meal delivery service. hey needed extra warehouse labour and found Instawork. Subsequently, Instawork was able to onboard Sun Basket in a matter of days and provide a 90% +ll rate for its warehouse staf, with an average worker quality score of 97%.

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Mike Wargocki, VP of Manufacturing at Sun Basket, contextualised that happens then operations teams are understafed and that proolems it can causee “ he frst thing it causes are mistakess hat’s a serious issue oecause, as te’re making orders for our customers, the key is making sure that quality remains as high as possioles. With understafng resulting in employees having to perform several roles simultaneously, people can quickly oecome exhausted and more susceptiole to illness, a core concern that Sun Basket, particularly during the pandemic, is diligent to avoid.

Despite that Wargocki calls the “uneven torkfot. of the company, even as demand in gret, he says that Instatork has alloted Sun Basket to meet its stafng challenges tith aplomos “ he Instatork team has oeen amazing oecause of the quality of torkers, as tell as the consistency of the fll ratess.” “ sing the Instatork platform, Sun Basket has counter intuitively lotered their overall stafng costs,. adds Bohnetts “By using a platform like Instatork, Sun Basket is actively empotering its frontline teams tith tools to make informed decisions, thich aggregates into a high return on investment I/ across the companys&

“Tht Insaawork atam has bttn amazing btcaust of aht qualiay of worktrs, as wtll as aht consisatncy

Learn More

of aht fll raatss.”

- Mike Wargocki, VP of Manufacturing at Sun Basket

instawork.com

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“ We have lots of great relationships with the farmers near us, particularly the organic operators, since 99% of the vegetables we buy are organic certified” — Michael Thompson, VP, Supply Chain and Business Integration, Sun Basket

“Sun Basket is a delivery-based meal subscription business, and our goal is to provide healthy food options to our customers using that model,” explains Mike Wargocki, Sun Basket’s VP of Manufacturing. “Whether our customers are eating gluten-free or vegan, or are on a Mediterranean diet, we find creative, delicious and healthy solutions for them.”

CREATIVE, DELICIOUS, HEALTHY “We like to think of ourselves as the Whole Foods of the meal kit industry; we’re offering a more specialized,

EX EC UTIV E PROFILE:

Mike Wargocki Title: VP, Manufacturing Company: Sun Basket

higher end and high-quality service,” Wargocki continues. Sun Basket’s premium, health-focused offerings extend across a staggering range of dietary requirements that make for a very broad, highly-customizable menu. Customers can choose from meal plans including Paleo, Carb-Conscious, Gluten-Free, Lean & Clean, Diabetes Friendly, Chef’s Choice, Vegetarian, Pescatarian, Mediterranean, or Quick & Easy. These meals are a part of a weekly rotating menu developed

by Chef Kelly and her team and shipped to tens of thousands of customers on a regular basis. The meal kits arrive

Mike brings 20 plus years of food manufacturing, quality and operations experience. In his current role, he is responsible for production and equipment buildout within the SunBasket manufacturing facilities.

Previously, Mike was the VP of Operations for DelMonaco Foods, a high end kettle cooking company.

Mike was also the Director of Operations for Penford Food Ingredients, running the food starch manufacturing facilities in the US and co-manufacturing operations around the world and prior to that the Quality Management Director for Penford Corporation overseeing global quality operations.

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“ One of the major benefits of the meal kit subscription business model is that the amount of food waste we create is so much lower than, say, a grocery store”

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— Michael Thompson, VP, Supply Chain and Business Integration, Sun Basket

cold-packed with instructions for the customer to prepare a two or four serving meal, sometimes in as little as 10 - 20 minutes.

In addition to its core meal kit offering, Sun Basket is working to broaden its scope across what Wargocki describes as its ‘share of stomach,’ branching out into snacks, lunch items and more.

“We provide the meal kits as our core product, but we’ve also launched our Fresh and Ready meals, which are readymade and just need to be heated up,” he says. “We’ll be further expanding those offerings in 2021, which is very exciting, as well as having a marketplace, which is a way of presenting a curated selection of snacks and juices to our customers.”

Thompson notes that, as far as a secret sauce goes, Sun Basket’s ability to combine quality, a large range of products and a high level of customizability is key to its success.

“We really want to personalize the experience for our customers. Some of our competitors will just offer two options - a basic and a vegetarian. We have 11 options to meet the different needs of different groups,” he notes.

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11 “We work hard to offer an ever-

EXECUTING ON THE VISION

changing menu every week. We take

Between them, Wargocki and Thom-

pride in providing a lot of variety to

pson oversee the operational side of

our customers, and many of our meals

Sun Basket. “Everything inside the

are made with unique components

four walls of the building, like labor,

like sauces that we develop ourselves.

manufacturing and packaging, that’s

We’re not just buying, for example, a

all Mike,” Thompson explains. He, on

romesco sauce off the shelf from a

the other hand, is responsible for the

third party. We’re making that romesco

company’s operations outside its prem-

sauce ourselves.” So, in addition to

ises. “Everything beyond these four

customization, quality and a broad

walls is my responsibility, from logistics,

range of options, sometimes Sun

procurement and supporting services

Basket’s secret sauce is also literally

like corporate IT, to food safety and

a secret sauce.

some of the other functions that enable

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SUN BASKET

E X E C U T I V E P R O FILE :

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Michael Thompson Title: VP, Supply Chain and Business Integration Company: Sun Basket Michael brings over 25 years of operational expertise with consumer product and subscription companies, building Direct-to-Consumer supply chain solutions. In his current role, he is responsible for procurement, inbound freight, last-mile delivery, food safety and corporate services for Sun Basket.

Previously, Michael was CSCO for NatureBox, transitioning the subscription service into an omni-channel food brand – servicing home delivery, office locations, food service partners, airlines and on-shelf retailers. Michael was also VP Operations for Bare Escentuals (cosmetics) where he managed North American Operations to support massive revenue growth and created an internal Program Management organization for strategic initiatives.

FROM FARM TO TABLE – A UNIQUE SUPPLY CHAIN In order to deliver on its promise of a rotating weekly menu that caters to all manner of dietary preferences and needs, the procurement function of Sun Basket’s business is all about smart, sustainable sourcing.

“We work with the company’s test kitchen about eight weeks before a menu goes out for delivery to make sure we’re taking into account the time of year and the ingredients that are in season,” Thompson explains.

From there, Thompson’s goal is to ensure that Sun Basket is sourcing the freshest possible ingredients in the right quantities. “We’re working to ensure we’re delivering as close as the work that Mike does within the

possible to a farmer’s market fresh

business’ premises. We work together

experience,” he says, adding that

on lots of different projects.” Together,

there are two major factors to con-

Wargocki and Thompson have the

sider when sourcing produce for Sun

unique challenge of sourcing, manu-

Basket’s meals: time and temperature.

facturing and distributing Sun Basket’s

“We’re trying to figure out how quick-

meal kits and other products across

ly we can shorten the time from harvest-

the United States, tackling extreme

ing a vegetable to delivering it to a

levels of customization in a way that’s

customer’s table. We’re fortunate

not only effective, but environmen-

enough to be sitting here in the mid-

tally sustainable.

dle of California, right next to the www.sunba sk et . com

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biggest produce-growing valley in the country. We have fantastic relationships with many farmers here, particularly the organic operators, since 99% of the vegetables we buy are organic certified,” says Thompson.

“These relationships with big farms and smaller scale operations all across the country mean that, when we can, we buy as locally as possible.” All of Sun Basket’s meal kits delivered to the East Coast, for example, utilize organic corn grown by the company’s supplier close 14

to its New Jersey facility when it is in season. Thompson notes that, “We do as much as possible to reduce the time between a vegetable coming out of the ground and coming out of the customer’s meal kit when they go to make dinner that night.”

Dealing with temperature is a uniquely difficult proposition. Sun Basket’s cold chain is an essential element of ensuring that produce not only reaches the manufacturing plant in the best possible condition, but also that the resulting meal kits arrive in the customers’ hands as fresh as they can possibly be. Thompson explains that, using individual temperature gauges on each pallet of produce

“Whether our customers are eating gluten-free or vegan, or are on a Mediterranean diet, we find creative, delicious and healthy solutions for them” — Mike Wargocki, VP, Manufacturing, Sun Basket

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SUN BASKET

“ We like to think of ourselves as the Whole Foods of the meal kit industry; we’re offering a more specialized, higher-end and highquality service” — Mike Wargocki, VP, Manufacturing, Sun Basket

16 received, his team can monitor the entire

When the finished meal kits leave Sun

journey of a piece of produce from the

Basket’s facility, ice packing plays an

supplier to Sun Basket’s loading dock.

important role. “We also try to be smart

“When that product arrives, I have

with how we pack out our products in

access to a complete readout of the

terms of ice, insulation and box size, tak-

temperature of that product over the

ing into account the length of the journey

course of its entire journey. I can see

and the temperatures at the destination,”

if a product that’s supposed to be held

Thompson says. “If you’re sending a

at 38 degrees was held for an hour at,

box to Phoenix, Arizona, where it’s 95

say, 55 degrees, and be able to know

degrees outside, you’re going to need

therefore that it isn’t going to hold up,”

a very different packout solution com-

he explains. “We use that information in

pared to, say, Chicago in the wintertime.”

addition to our quality inspection pro-

Using a sophisticated algorithm, Sun

cess to sort through our produce and

Basket’s fulfilment team can account for

ensure we’re only using products that

travel time, environmental conditions and

live up to our customers’ standards.”

the contents of each individual box.

have 25,000 different iterations in a 30,000-box run. We could conceivably have a situation where every single one of our customers orders a completely different combination of meals in their box. It’s really been interesting to work on developing our technology to allow for that level of customization,” says Wargocki, explaining that his own role focuses on finding the most efficient, highest-speed production options that are designed to support regular changeovers and refits with the least amount of downtime possible.

“We have a different ice configuration

“If we’re shipping those 30,000 boxes,

for, in theory, every single zip code in the

they’re going to contain 100,000 individ-

country, which gives me quite a fun chal-

ual meals, which means approximately

lenge,” laughs Wargocki.

300,000 individual ingredients. When you think about the touches that go into

EXTREME CUSTOMIZATION

that, it’s more than a million touches

The sheer level of customization that

every week that are completely unique

Sun Basket offers its customers cre-

to that cycle,” he explains. “Seven days

ates a uniquely complex challenge from

later, the whole process starts again

a manufacturing standpoint as well.

with entirely new products.”

“The big challenge from a manufactur-

Using advanced customer analytics,

ing point of view is how customizable

the Sun Basket team can predict with

Sun Basket’s service is. A lot of our

increasing accuracy which foods their

competitors might send out 30,000

customers will buy each week. “We

boxes in five or six different iterations.

know eight weeks in advance what

Sun Basket, on the other hand, might

we’re going to put on our menu and we www.sunba sk et . com

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INST AW ORK

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“Instawork is one of our suppliers of temporary laborers,” says Wargocki. “As the business grew, we needed a fair amount of people very quickly. Instawork is a tech-based solution to that problem that gives us a huge amount of flexibility.

“We have a very high demand for our products over the weekend, and then for the rest of the week we have a more level, predictable workload.

On the weekends, I need to be able to have a large enough team to ensure that all of our production and fulfillment gets done. Instawork is great for that.”

Instawork uses a web-based network of contractors that can sign up for particular shortterm jobs. “We can give priority to contractors we’ve had positive experiences with before,” enthuses Wargocki, adding that, “it also provides our contractors with a really good training process. We can upload our training materials, food safety and GMP requirements - everything those employees need to become certified to come in and work for us. It saves a lot of onboarding time for new temporary staff.”

use our analytics to predict how much

notes, is packaging. “Each individual

of each of those meals our customers

ingredient needs packaging, and then

are going to want. We can predict vol-

all those ingredients are put in a package

ume and location based demand, as well

together, which goes in a bigger box with

as which specific meals and diets people

ice and other insulation for shipping,” he

are going to order, and we can get very

explains. While the issue is a hard one to

granular in terms of one ingredient vs

get away from, Thompson adds that Sun

another,” says Wargocki, adding that

Basket has taken some significant steps

this is essential, not only to ensuring the

towards mitigating those issues.

company can meet demand, but also its sustainability goals.

“All of our packaging is either recyclable or compostable,” he says. “It makes our job a little harder, because

SUSTAINABILITY AT SCALE

sometimes it’s difficult to find recycla-

There are a number of factors unique to

ble and compostable solutions that

the subscription-based meal kit delivery

meet our needs regarding keeping

business model that impact sustainable

food cold, but we really stand by our

practice. “One of the major benefits of

commitment that while it is necessary

the meal kit subscription business model

to have a fair amount of packaging,

is that the amount of food waste we

we do as much as we can to reduce its

create is so much lower than, say, a

environmental impact.” Wargocki adds

grocery store,” says Thompson. “We

that, from a manufacturing perspec-

track our wastage for each week and

tive, finding ways to use recyclable and

it’s in the low single-digit percentage of

compostable materials in the manu-

our total food purchase, which is really

facturing process continues to be an

low. We try not to throw anything away

interesting challenge.

that’s still usable. If we don’t manage to sell something to a customer, we’ll

ONWARDS AND UPWARDS

donate it to a food bank.”

Thompson reflects that, had things

Where meal kit companies across the industry run into problems, Thompson

been different, the 2020 COVID-19 crisis could have gone in an entirely www.sunba sk et . com

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different direction for Sun Basket.

“We were growing very fast, like a lot of companies in the subscriptionbased food delivery space,” he reflects.

“Then, in 2019, the company made the decision to slow down a little bit and really make sure the economics of the business were sound. You can grow, pump more money into marketing, attract more and more customers, etc.

But if those customers aren’t staying for the long run as you had hoped, your company is going to burn itself out.”

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Sun Basket spent 2019 shoring up its business model. This year, the results have been spectacular. “Those efforts

“ We have a different ice packing configuration for every single zip code in the country” — Mike Wargocki, VP, Manufacturing, Sun Basket

put us in a really strong position coming into 2020, when COVID-19 started to happen and being in the business of sending food to people’s houses suddenly became a very good industry to be in,” Thompson recalls. “Had we not gone through all that work the year before to make the economics sound, we wouldn’t have been in such a good position to be able to help our customers and grow as much as we did.”

Now, Sun Basket is looking to broaden its offerings even further, finding new

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ways to take its core strength of

and diverse in terms of new ways to

making delicious, healthy food and

bring new foods to new customers at

find new channels to deliver it to its

all different times of the day, whether

customers. “2021 is going to be about

that’s lunches, dinners, breakfast or

taking those new offerings to a wider

snacks. The challenge for us is making

market through new channels,” says

sure that we not only do a lot of different

Thompson. The company is growing

things, but that we do all of those things

rapidly, with deals on the horizon to

well. Everything that we’re doing is to

sell Sun Basket’s food through partner-

figure out how to grow the breadth of

ships with on-line retailers, as well as

our offering while never compromising

some brick and mortar locations.

our quality standards.”

In closing, Wargocki adds that, “We’re looking to become very broad www.sunba sk et . com

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