The Future of Food Distribution: Foodem
Once in a while there are startup companies that grab your attention from the rest. There are many different food startups like HealthyOut, a service that helps you find healthy dishes and restaurants to match your diet criteria. Another one is Instacart, which offers same-day groceries right to your door. This brings us to Foodem, a startup that sets itself from the rest. Foodem is an innovative food distribution website that connects businesses and food distributors in a marketplace. This is the first of its kind in the food distribution industry. It’s what sets Foodem apart from other food distributors because there is no central hub or marketplace for a list of distributors that sets it up like Foodem. An example of this would be a farmer who has a product that they would like to distribute but don’t have the marketing budget or outlet to sell it. This is where Foodem comes in and connects this farmer to restaurants, hotels, caterers and so forth in their B2B marketplace. Foodem caters to the $670-billion U.S wholesale food distribution industry and is focusing on metro areas in select cities in the United States. The founder behind Foodem is Kash Rehman. He gave us some insight into how this idea came about and some helpful tips for anyone looking to get into the food industry.
From Humble Beginnings
Kash was born in Karachi, Pakistan and has a passion for food, business, and creating something worthwhile for business owners. Kash graduated from the University of Maryland in Information Systems then he went to work for a consulting company called BusinessEdge Solutions. This took place around the year 2000 so jobs were tough for anyone working in the IT field (remember Y2K?). However, after working a year and a half at BusinessEdge Solutions he left to go look for another job. Kash says he was always interested in the supply chain. So he started looking into different supply chains to feed his curiosity. He researched clothing import/export to food and pharmaceutical supply chains. He realized that the food industry was his calling and decided that if he wanted to grow and make a difference he needed to start a company. Of course this comes with risks but Kash felt it was necessary to understand more about the business and supply chain.
Taking Small Steps and Giant Risks
“So you know when people say ‘overnight success’? There is no such thing as overnight success unless you hit the lottery. You have to work hard. There will be days like what am I doing here and other days where you say I’m glad I did it.” – Kash Rehman
Kash explains that when he used to work at a small company he loved the fact that he could branch out and try different things. It helped him seek out his strengths and weaknesses. He worked at Foodco USA for about six and a half years and at the end he accomplished a 600% growth or increased revenue from $2 million to $12 million. From this experience Kash started to think about how he could make it more beneficial for food suppliers and restaurants who do business with them. That’s when he first came up with the idea for a marketplace. He didn’t know what it would be called, how it would function or who it would cater to, but he knew smaller distributors had the hardest time getting business because most business comes through sales teams, which generally cost a lot of money. This is when it started to click for Kash. A solution to this problem could be to create an “Amazon marketplace” for food distributors. He worked a lot with the producers and then getting the product and selling it forward, but not so much on the supply side. He wasn’t sure if a restaurant would be interested in using his service. He needed to validate his idea somehow. So Kash started his own restaurant with a friend. This taught him how a small business works and revealed pain points or problems on supplier and buyer sides, which started to validate his idea.
Giving it Life
In 2009, Kash started developing his idea. He wrote up a business plan, financials and started raising money. He eventually created the website through a company in India and met the co-founder of AOL Research Labs Satyam Priyadarshy who became his new CTO at the time. Kash said “When you have an idea, it’s not enough to back yourself up with data and big names, you need an actual product that can be tested.” Kash put Foodem in beta testing for two whole years. The feedback helped identify the flaws of the product and possible solutions for them. Feedback is one of the most vital aspects of making your business successful. Validate the service, test it for as long as you can, and improve or innovate it. They also saw a huge demand on the farm side and soon realized they could bring in speciality manufacturers. The premise of Foodem is to help smaller growers and distributors supply local restaurants in their area. So it made sense to bring farmers and buyers together. Farmers could host their products on Foodem and have corresponding symbols that would help the client know what they were offering. Having a great product was only one aspect of the business, finding the right partner has its own separate value. So while version 2.0 of the product was getting built by his team, Kash went out and raised $75,000 in August 2012 then $600,000 in March. It would feel like a successful business for any owner to be able to acquire close to $700,000 from angel investors. However, Kash responds humbly to these investments and is focused on improving Foodem by providing an outstanding service. Foodem has a bright future and a lot of room for growth. There have been many requests to bring the service overseas as well as Canada. Only time will tell how far Foodem will go.
Words of Wisdom
Kash says, “So you know when people say ‘overnight success’? There is no such thing as overnight success unless you hit the lottery. You have to work hard. There will be days like what am I doing here and other days where you say I’m glad I did it.” Business-minded people are the ones who come up with great ideas. If you have a great idea and you don’t know where to start at least use the strengths that you already have. Do as much as you can until you are ready to get help from others. Don’t start begging people because you’ll seem less attractive. When you go raise funding it gets that much easier because you’ve taken most of the risk out for investors to invest in you. A lesson from this experience is to always dig deep into your passion as the information you extract can lead you to a unique idea.
It can take years for your idea to get off the ground and see the light but like Kash’s story it can pay off in the end. Furthermore, with a good product you’ll attract the right kind of venture capitalists as well as people who would love to work for your company. The food industry can be quite competitive and you’ll need to think outside of the box to set yourself apart like Foodem. Here are some final words from a famous Hindu monk called Swami Vivekananda who said: “Take up one idea. Make that one idea your life — think of it, dream of it, live on that idea. Let the brain, muscles, nerves, every part of your body, be full of that idea, and just leave every other idea alone. This is the way to success.”