Over the last six months, Weinstein noted, the company has focused more intently on its AI systems, “both operations research-powered and machine learning-powered systems to give customers better recommendations,” contributing to the company’s 40% YoY growth and strengthened customer loyalty.
When users sign up for Hungryroot, they are prompted to answer questions about their food preferences and dietary needs. By “asking the right questions,” Weinstein said, Hungryroot’s machine learning has a “powerful head start” to provide even more improved ingredient, product and recipe recommendations than the last.
“We’ve been able to improve [retention] dramatically over the course of the last two years. It’s up more than 50% in the first six months and customers tend to spend more than 50% with us now than they did two years ago,” Weinstein emphasized.
Weinstein credits two-thirds of Hungryroot’s sales revenue to its fine-tuned AI capabilities. The other third is driven from customized outrate which he defined as “what our customers didn’t like and replaced with their own recommendations.”
He also credits Hungryroot’s expanded variety of products and categories in three of its facilities covering 48 states—which include vitamins and children’s snacks—while simultaneously improving its AI-powered personalization capabilities.
“Our consumers come to us to fulfill a bigger set of needs around grocery and food, and the more categories we can cover … then this [AI] personalization system has more raw materials to pick from [to] leverage the knowledge that it has about the customer better,” he said.
Expanding variety for its core demographic: families
While the personalized grocery landscape continues to grow as consumers seek convenient and healthy food for a busy lifestyle, Weinstein explained that Hungryroot stands on its own for both its precision AI-capabilities and the variety of SKUs that allow consumers to try new products, which is particularly important to its core demographic of families, who “find tremendous value in both … convenience and dollar savings.”
“The vast majority of our customers tell us that they save money with Hungryroot because they’re able to eat in a healthier way very easily but still very much enjoy their food,” he explained.
Hungryroot works directly with brands, which Weinstein said creates value for its customers, particularly for brands that are unavailable in retail. In the future, Hungryroot plans to expand its SKUs from “hundreds” to “thousands,” with the added flexibility of swapping out ingredients and products that are impacted by external factors like weather and price changes.
He explained that Hungryroot’s model “allows for that capability to be able to, on a real time basis, respond to weather events, and also price changes, availability [and] vendor dynamics [to] make a good choice on behalf of each customer.”
