“It’s kind of funny,” muses Orazio Buzza, founder of Fooda. “I always told friends that if I wasn’t doing a startup, I’d be running the best hot dog stand. I’ve come full circle.”
Buzza doesn’t sell hot dogs--at least, not exclusively hot dogs. His startup, Fooda, which expands from Chicago to New York this month, is rather in the business of bringing a range of food options to people who toil in cubicles. Fooda creates what Buzza calls a “virtual cafeteria” for companies wanting to bring diverse food options to their employees, something it achieves by partnering with local restaurants. After finding success in Chicago, and with high hopes for New York, Fooda plans to expand to more U.S. markets in the coming year.
The glimmer of the idea first came in 2007, when Buzza was President of Echo Global Logistics, something like a Kayak for commercial shipping. That startup was rapidly growing, and had a “trading-floor mentality,” recalls Buzza, with “not a lot of time to get food.” Someone at the company came up with a great idea: Why not get local restaurants to come into Echo and sell their food directly in the office?
As the company, which IPO’d in 2009, grew, so did the food program. Word soon spread throughout the entire building--which housed a number of companies other than Echo--that good food could be gotten affordably in its offices at lunchtime. There were lines out the door, and Buzza soon had to make the decision to post signs declaring that only Echo employees could use the program.
A seasoned businessman, Buzza knew demand like that required a commensurate supply. Why not develop Echo’s in-house food program into a business of its own? He and some colleagues began to do so, beginning by serving the need within Echo’s own building. Soon, they expanded to the rest of Chicago.
Fooda works with companies to create a rotating cast of restaurant options in their offices; only one restaurant per day comes, and that restaurant won’t cycle back for a few weeks (though if employees have favorites they want to see more often, that can be arranged). Fooda wants to make sure it’s selling food at or below retail; a Fooda-sourced Chipotle burrito shouldn’t cost more than one bought at the restaurant. Fooda works with restaurants to pare down menus to make them work for Fooda clients; it has even been able to convince some fancier restaurants to carve out a more affordable swath for lunchtime menus. Fooda earns its money largely by charging restaurants a fee of $100 to $300 to serve food--the idea being that they'll be bringing in revenue during normally slow hours and exposing their restaurant to a new customer base that might stop by for dinner or order takeout another time. Depending on the size or location, Fooda may charge businesses for certain services, like creating a branded “café” or using specialized equipment like steam tables. It has partnered with several hundred restaurants to date.
One thing Buzza has learned since getting into the food business is that a healthy kind of unvarnished feedback reigns supreme in that space. When initially running taste tests of restaurants he was considering partnering with, he found that some restaurants wanted to keep a representative present while Buzza was evaluating the food. “I found it really uncomfortable. It was like telling someone their baby was ugly,” he recalls. Over time, though, he came to learn that this Top Chef-style tough love--or tough hate--is exactly what separates the winners from the losers in the highly competitive food space.
“It’s not uncommon in their world to go through 20 to 30 iterations of something before they add a new item. That process that I initially thought was uncomfortable now seems more professional,” Buzza says. Fooda decided to embrace this strategy with its own product, and asks for brutal direct feedback from the businesses it works with. It feeds that data back into its own quest to create the perfect rotation of lunch options.
So far, Buzza hasn’t encountered an overwhelming demand for an in-house hot dog stand anywhere. That particular dream will have to remain just that, for now.
[Image: Flickr user USDAgov]