In a former Chevys Fresh Mex restaurant in San Francisco, the kitchen staff at Sprig headquarters burns the midnight oil braising pork shoulder. In the morning, another batch of cooks packages the pork, black rice, and sesame-ginger greens in compostable containers in an assembly-line fashion, before chilling them for dinner service.
At night, a fleet of drivers delivers the dinners to offices and residential towers across San Francisco. This is how more and more meals come together in the on-demand era.
Founded in 2013, Sprig is a food delivery startup that aims to make eating well an easy option. Each dish is developed and prepared in one of the company's kitchens (there is one each in San Francisco and Chicago) and costs between $11 and $15, plus a $2.75 delivery fee. The company caters to a health-conscious consumer who can afford a pricey vegetable wrap for lunch.
It's one of those good ideas that have come under more scrutiny recently, as funding dries up in Silicon Valley.
Rival SpoonRocket shut down in March because it couldn't cover the cost of operations. The shutdown came on the heels of Uber rival Ola ending its food-delivery service and organic grocery delivery startup Good Eggs implementing layoffs and leaving several cities. Meanwhile, larger on-demand competitors— like Postmates and Uber, which both launched standalone food delivery services recently — have a big advantage in established user bases.
Still, Sprig hopes its mission-driven focus on making healthy foods accessible to the masses will save it.
"We believe if we make this type of food as convenient as fast food, that more people will [eat it] and we'll be bettering society," says CEO and founder Gagan Biyani.
The idea for Sprig sprung from the personal life of Biyani, a Lyft alum who previously helped launch the online education marketplace Udemy. After college, he gained 25 pounds and could no longer run a mile, but the demands of working in Silicon Valley left him no time to cook healthy meals.
Today, Sprig delivers thousands of meals in San Francisco alone daily. With menu items like the shredded raw zucchini bowl with shrimp and basil-walnut pesto, and the ever-popular lemon-Parmesan kale and quinoa salad, the company dominates other food delivery startups in terms of quality of ingredients and transparency in nutritional value.
"At this point, we're kind of the last one standing in terms of food-delivery companies that make their own food," Biyani says. "I think that's telling because it shows if we can win in San Francisco, we should be able to win anywhere in the country."
Food fight
Biyani takes a window seat in the company's kitchen headquarters. Behind him, employees type away at a bar that now serves as a desk. It's not hard to imagine a "real" restaurant here.
"We are at an intersection of value, convenience, and quality in a way that no other food business can be," Biyani says.
Because Sprig is vertically integrated — meaning that it's responsible for both preparing and delivering the food, unlike a traditional delivery startup — it earns more on every dollar the customer spends compared to a company like Postmates. That allows Sprig to price its fine-dining meals at a casual-dining rate. It also ensures quicker delivery.
The ingredients are sourced as local, as organic, and as sustainably as possible, and in some cases, the chefs have inspected them in their place of origin.
In many ways, Sprig's direct competitors don't measure up.
Munchery delivers refrigerated, ready-made dinners across San Francisco, New York, Los Angeles, and Seattle, but its dishes — ranging from chicken parmesan to a French dip beef sandwich — lack Sprig's originality. New York-based Maple, backed by Momofuku's David Chang, offers balanced, beautifully crafted meals, but it doesn't include nutritional information on its website despite promising it would back in January.
SpoonRocket, a former favorite among Bay Area college students, distinguished itself in the food-delivery space by offering meals under $10 in under 10 minutes, but the food was sub-par, as evidenced by the brutal Yelp reviews.
The company even published a "goodbye" blog post citing "intense competition from competitors like Sprig" as the source of its downfall. Sprig reportedly entertained the idea of acquiring SpoonRocket, but later passed.
Meanwhile, Postmates launched a food delivery service called Pop this week that promises "highly curated" meals delivered in 15 minutes or less. Uber unleashed a standalone food delivery app in March, leveraging its existing user base. But the company already killed off the instant option in New York City, showing it's just as hard for the big guys to stay afloat in the on-demand space.
Sprig, at least, has data on its side. It knows exactly what customers want, and because the company makes its own food, it can tailor the menu to keep them on the hook.
Just as much a tech company as a food one
As the company's first employee back in 2013, Jessica Entzel sort of doubles as the staff matriarch. She hails from the kitchens of celebrity chefs Wolfgang Puck and Gordon Ramsay, and leads the R&D development team responsible for creating and curating Sprig's menu.
Each week, a team of data and market researchers and operations managers in each of Sprig's three cities presents a theme for a dish that they think would perform well based on past user preferences. It might also "complete their catalog," or fill a gap for a certain type of eater in their market.
A proposed meal goes through several rounds of testing to ensure it can be produced in large quantities. A cook runs the ingredients through a nutrition calculator app to make sure that it appeals to a health-conscious consumer, and a staff photographer shoots it in the studio.
By the time a meal hits the Sprig app, at least a dozen eyes have seen it.
Entzel reads customers' ratings every week. If a dish performed lower than her expectations, she digs deeper to figure out what went wrong. Maybe a handful of people said they loved the chicken dish but wish it had more sauce. Entzel challenges her team to correct it and she throws it back into the rotation.
The operations managers also organize the menu week to week to satisfy customers trend and maximize sales.
"At lunchtime on Mondays, things that are really clean do really well, like a kale and quinoa salad or a raw root vegetable salad with chickpeas. I think people feel like they need to detox from the weekend," Entzel says. "On Fridays, we have the highest volume of cookie sales. People want to indulge a bit."
From a consumer perspective, the process for ordering from Sprig feels simpler than ordering from many competitor sites. The website is clean, and you order from the home page. A pared down menu ensures you don't go down a rabbit hole of options, which tends to happen when I use Postmates or Seamless since they partner with thousands of restaurants.
I placed my first order — a hot Mediterranean lamb and beef wrap with zucchini, eggplant, and roasted peppers — earlier this month in just three clicks, which is fewer than half the number of clicks it would take for me to make a similar transaction on Postmates.
Rather than conceal the meal's ingredients and nutritional value in a difficult-to-navigate site map, Sprig displays those factors in plain sight. It's presumably a lot easier for a vertically integrated company like Sprig to access that data than it is for Postmates or Seamless, which picks up food from third parties.
The biggest hassle is sometimes just ordering in time. Sprig sold out in my area before noon that day.
While that may be a sign of success in San Francisco, it's hard to tell how Sprig will fare outside the city.
Eat or get eaten
"The on-demand economy is starting to show its cracks," Business Insider's Biz Carson wrote at the time of SpoonRocket's departure, "and companies are falling apart in an environment where funding is suddenly hard to find and low-to-no margin businesses are facing tighter scrutiny."
For Biyani, these indications of the crowd thinning are unsurprising. He explains that most mature markets in the technology sector experience growing pains.
"If you look at social, there was a major shake-up and eventually only one was left standing. The same was true in search," Biyani says. "There are other B2B businesses that tend to have two to three winners, but it's very unlikely that there will be eight to 10 winners in a specific space. So honestly, to me, this is exactly what we expected to happen."
What comes next is more difficult to forecast.
Right now, Sprig serves a community that lives in the most expensive rental market in the US, mostly works full-time, and cares about the food that fuels them. (The company also operates in Chicago, but has fewer customers there.)
"We're popular in the Mission. We're popular in the Marina. It's pretty amazing how diverse the Sprig community is," Biyani says. "The Sprig community largely represents a segment of the San Francisco community."
Still, not every city in the US is so densely populated with tech-savvy millennials who can afford to cough up upwards of $13 — about a dollar more than minimum wage in San Francisco — to have sesame-tamari soba salad with egg and shitake delivered to their doorstep.
Ted Maidenberg works as a general partner at Social Capital and sits on the startup's board. He describes Sprig as a "simple everyday luxury," where for a few dollars more than the cost of take-out, consumers can experience a tasty meal that is sourced responsibly.
As the company scales to other locations, Maidenberg suspects the startup may widen its appeal by offering smaller portion sizes at a discounted rate or pricing meals based on the protein used in the dish. When a community grows dense in Sprig users, the drivers cover less ground and make deliveries with more efficiency, which might also help reduce operational costs.
Biyani points to Chicago as evidence that Sprig can succeed outside the Bay Area. It's a foodie capital, but for people who want to eat clean, the options are few. Sprig is currently experiencing user growth in Chicago at three times the rate of San Francisco.
Sprig plans to launch in more cities, though Biyani would not name markets.
Looking ahead
An on-demand startup like Sprig has access to limitless data so the kitchen can assure consumers get exactly what they want. Based on the company's stronghold of repeat users, it seems this system pans out well.
"Ultimately, we are a service for people who do not have the time to cook because they're busy working and providing to society in that way. Second, they care about what they eat," Biyani says. "Those are really the only two things that tie our customers together."
But in order to find success, Sprig will have to come up creative solutions for attracting people who aren't on a Silicon Valley salary.
