Starting a French food delivery business. Green pepper It will cease operations on Tuesday after one final holiday season in exchange for a 25% commission for local food businesses that have used the platform for nine years of business with its customers.
In a letter announcing the decision to customers earlier this month, Epicery's team said it was “the result of several months of economic and financial challenges that, despite our best efforts, we have been unable to overcome.”
By focusing on premium groceries and local deliveries; Epicery suffered when inflation caused customers to rethink their food spending. In some cities, this was even after operations had ceased. Negative Ebitda in 2023 on sales of €2.57 million – €4.69 million;.
But before those difficulties, the startup reached unexpected heights when France went into lockdown during the COVID-19 pandemic. That wave continued in late 2021, when Geopost/DPDgroup, the express parcel division of Groupe La Poste, which handles France's national postal service, acquired a majority stake in the company.
At the time, the corporate alliance made sense: Geopost was an investor in last-mile delivery service Stuart, and Epicery was a heavy user. But in recent months, La Poste has cut ties with several of its founders. Previously invested.in particular, Stuart was sold. at significant loss.
In an announcement shared with TechCrunch, Geopost said the decision was “decided after a detailed analysis of (Epicery's) financial and operational performance”, leading it to conclude that “the subsidiary's short-term and near-term profitability has been severely impacted”. developments in the food delivery market; Post-Covid, there is a gradual return to direct consumption from local shops, and competition in the food retail segment is intensifying.”
Food delivery in France in 2024 will be very different compared to the first years of Epicery (launched in 2016). At the time, its competitors included Take Eat Easy. It ceased operations in 2016.But Deliveroo and Uber Eats were nowhere to be found, and fast-paced commerce hasn't had its ups and downs. Cajoo, Flink, While Gopuff and the Gorillas It no longer operates in France.Their marketing presence is hard to escape for a moment.
Epicery's scale and visibility have always paled in comparison. After scaling back its national expansion, it had about 25,000 customers, mostly from 1,100 local boutiques in Paris and Lyon. It might make sense as a stand-alone lifestyle business, but less so as a VC-backed one. Numbers like these don't move the needle; Especially less so as part of a larger group where Stuart collaborations no longer exist.
Epicery co-founder and CEO Édouard Morhange could not comment on strategic aspects due to a non-disclosure agreement. But in a personal statement, he commented on Epicery's legacy. “We're very proud to have introduced e-commerce to local retailers over the last 10 years, and we're confident they'll continue to grow their digital sales in the years to come.”
Morhange says it is currently working on “an ambitious new model of the food industry” that will accommodate its digital transformation in France and abroad. As Epicery's employees, each of them will receive support from HR teams to discuss opportunities within the Group or help them find work, Geopost said.
French entrepreneur Nicolas Machard is a food marketer. Pudi Bon is Also a subsidiary of Geopost.Epicery's employees said they believe the new positions will be available soon. Geopost and Pourdebon fit; He also believes that the mission and business are still sound. Not only is Pourdebon a heavy user of Geopost's food delivery service Chronofresh, but it's on track to be profitable by 2027 and will likely work to reach that milestone sooner.
Epicery has managed to make the math not work on the profitability front, but it has sometimes been able to sell 10% or 20% to the local shops it works with. According to Elsa Hermal, who co-founded Epicery with Morhange and VC Marc Menasé; It is a very important milestone.
“What's amazing to me is that what took us (the store owners) so long to achieve what we promised from the beginning is now an important part of their business,” Hermal said. Now a business coach and impact investor. Climate Fund through Satgana.
As an investor, Hermal knows the Epicery operates in a complex niche, but doesn't think it's going anywhere. “Logistics operations are complex and challenging in terms of metrics, but that doesn't mean it can't be done.” Now that local businesses have had a taste of it, and in a situation where every sale counts, it wouldn't be surprising to see a model like Epicery make a comeback at some point.