Making food accessible to the over 80% of the US population that doesn’t have a Whole Foods or Trader Joe’s is quite a task. Which is why we’re giving people direct access to the wholesalers that sell to these big name retailers. As a result, healthy eating gets a whole lot more affordable. In this episode of Super Human Radio, Wholeshare’s cofounder Matt Hatoun chats about how Wholeshare is playing our part in the future of the food movement. Have a listen here or read the full transcription below.
Carl: Welcome back. We have an epidemic today of disease and obesity that’s completely avoidable. But first, two things have to happen. People have to truly understand what is really healthy food, and the second thing is then they have to have access to it, and quite frankly the second thing is more important than the first, because there’s a lot of people out there who know what is healthy food, but they just can’t find it! I’ve had these discussions with Kahn Santori Davidson, a blogger and a writer for several newspapers up in the Detroit area. He says, “Carl, Whole Foods isn’t coming in here! Trader Joe’s, they’re not coming in here!” So even if we enlighten people on how to eat better, what ancestral diets are, how to make more intelligent decisions about what they should eat, how are they gonna do that if they can’t buy the food? And hence, the term “food desert” has evolved. And there are a lot of food deserts all over the United States today, but there’s a group trying to change that. My next guest is Matt Hatoun. How you’re doing, Matt?
Matt: Great! Thanks a lot for having me on Carl.
Carl: You guys really are on a mission here, to give people access to the foods that they want, regardless of where they live. But this is an amazingly huge undertaking. It’s so huge! How did it start? Where’s the genesis of Wholeshare?
MH: Yeah, I’ll give you a little background on how we got started. It’s actually, it’s a company and website founded by me and Peter Woo and Miriam Goldberg, my two co-founders. And we all went to Brown University, we all studied computer science there together. And after school at some point we were living in Providence, and we were part of a buying club there. And, you may be familiar with this model, it’s a model for buying food that was popular…
Carl: CSA! A CSA, right, A CSA?
MH: Well, it’s kinda like a CSA. It’s like a CSA in that it’s a bunch of people organizing, grouping together the purchasing power. It’s also sometimes just called, a small scale food co-op. Essentially like a food co-op.
Carl: A food co-op, okay.
MH: Yeah, and we were part of this co-op, or buying club, and it was a really great model. The key to the model is that it allows consumers to basically pool their purchasing power together and basically bypass grocery stores. Like take retailer grocery stores or supermarket out of their supply chain and go directly to the wholesalers. So we’re talking about whether consumers buy directly from the same wholesalers that are out there selling to natural food stores, or selling to restaurants? And obviously, there’s a couple of huge benefits in that. The first is price. You’re taking grocery stores out of your supply chain, you’re saving a ton of money, like Whole Foods on average, marks up 55%.
Carl: Whole Foods is crazy. I looked at fish oil in Vitacost, and fish oil at Whole Foods, they’re a block away from each other. And the Carlson’s fish oil at Whole Foods was literally, $27 more per bottle.
MH: Yeah exactly, and it’s the same thing, right? So there’s these giant mark-ups, and then the other bigger piece is what you were touching on, which is really about access. These large, natural food stores, like Whole Foods, they can’t really go into huge areas of the country. Like Whole Foods is really restricted, based on where they can operate. They need to be in really large cities and in wealthy suburbs, and so that leaves huge areas of the country out to dry, and that’s… Whole Foods can really only service about 15%, maybe 20% of the US population. So that just gives you a sense of how much of the populations out there are unable to access a lot of this food. So that’s what we really loved about this buying club model, is that it allows consumers, in their community, in their area, to kind of pool their purchasing power and get the food they want into their community really quickly. Like you were kind of mentioning, these large natural food chains are really slow to respond to the change in demands where people are learning more about eating healthy, learning more about the kind of food they want to eat, trying to change their eating habits, but they just can’t get access to the food. So that’s really the problem we’re trying to solve.
MH: We were in this buying club, in this co-op, and we looked at it, we loved the model. The thing is about it is that co-ops are notoriously hard to organize and manage. It’s just a lot of people kind of writing checks back and forth to each other, ordering from physical catalogues from the distributer. So it’s a lot of work to manage a co-op, and that’s where we thought, we can solve this problem. We can make a website that kinda makes this whole process a lot easier. It makes it very streamlined, very simple, automatically aggregates orders from friends, families and neighbors within a community, so that they’re shopping directly from the wholesalers, but it’s really a simple process, and it feels like they’re just shopping for themselves. And that’s the problem we really trying to solve, and in that way we can kind of bring this existing model that’s already out there to new demographics and new people who have never even really heard of this model.
Carl: Now the really unique thing about Wholeshare is while, you give a buyers both access and buying power, which they’re gonna save literally… I mean, when I was a young family, with three children, we were spending more on trips to Krogers than we were on our mortgage every month. We were spending an average of $1,400 a month at Krogers. When I realized that I thought, “Oh my god, no wonder why these grocery chains are so popular, so powerful.” Krogers here in Kentucky, twice a day, the money trucks come and pick up the cash, twice a day! It’s like casinos, you know what I mean? And so, not only are you leveraging buying power, but one of the other things that it appears that you are now really starting to do in a grander scale and growing every day, is actually giving people access to perishables from farmers.
MH: Yep, exactly. And that’s really where we wanna be. What we’re trying to do is really be a full replacement for the grocery stores. So you can get the full selection of products that you would get if you go into Whole Foods. You can get the perishable, you can get the nonperishable. And like you said, a big part of that is kinda going directly to the farmers. Directly to the farm co-ops. And that is a big piece of what we’re doing.
Carl: So talk about how it works. So if somebody goes to your website… Your website is wholeshare.com, right?
MH: Right. Exactly.
Carl: Okay. They go to your website, do they have to pay for a membership fee?
MH: No. No membership fee. The way it works, the way we really try to design it, is that it’s kind of similar to a grocery store experience. Shop whenever you want. You don’t have to yourself have an order minimum. You don’t have to have a frequency. You don’t have to have a membership. You don’t have to have a subscription or anything like that. The way it works is… What we really try to do on the website is kind of translate consumer behavior to wholesaler behavior. So when you come to the site, a regular website, just like you’re used to. You have your own cart. You shop for yourself. You just put the cart items you want in your order and you just pay with your own credit card. But you’re part of a group. So you can kinda see, “Hey this is the group that I’m in.” And your group has to meet an order minimum in order to get products delivered from wholesalers.
Carl: Yeah. But that order minimum is so low that one person could probably eat that…
MH: That is true.
Carl: They could meet that order minimum by themselves?
MH: Right. It is very true. So the order minimum, depending on the supplier, they usually… For most people, it’s gonna be about $330. ‘Cause when you come to the website, we’ll connect you to the suppliers in your area. But for most people, it’s gonna be about $330. Yeah and that means you can select from 20,000 products from that supplier. So you’re getting a huge selection of products from that supplier and as long as you buy $330 worth of products, you can buy by yourself if you want. Or for a lot of our people, it is they’ll split it with a couple of neighbors, couple of friends, form a little group around it. But you can definitely do it by yourself.
Carl: And really you don’t have to… So the other thing I wanna be clear about with people. We’re all so busy. Nobody wants to have to start corralling their neighbors. “Hey, are you gonna place an order this week, ’cause I… ” But the beauty of this is this, if you tell your friends about it, they will go there. And if they just order passively, they’re already part of the group. You don’t have to say, “Oh well, you gotta join the group. You gotta be part of the group.” ‘Cause for me, when I first started buying raw milk, we were part of a buying group. Every week, we were like seven families, and every week we rotated who drove out to the farm and picked up the milk and brought it to their house. And everybody had to come to your house to pick up their milk. It was fun in the beginning. But then it became a burden.
Carl: That’s not what Wholeshare is. What Wholeshare does is go to the website like you’re an individual, chances are there’s a group already forming or there are people in your area that are buying now. And you’ll become part of that group already. The other thing I wanna make really really clear to people. This is not a buying club like all the other buying clubs out there that are buying from the wholesalers and becoming the retailer instead of your local Kroger. They’re saying, “Hey, you can save 30%, to 40%, to 50% off retail by buying from us.” What Wholeshare does is they connect you directly to the wholesaler that Kroger’s buys from, that Gristedes buys from. You cut out the middleman. They don’t become the new middleman. You cut out the middleman. This is unbelievable, folks. The prices are stupid, stupid. When you look at these prices, you go, “Oh my God, that’s what I could be buying that for right now?” It’s unbelievable.
MH: Yeah and that’s exactly right. You see a lot of people out there right now saying, “Oh, you’re getting wholesale prices.” But they have their own warehouses, they have their own delivery, or whatever. They’re adding a component on top of the wholesale. We’re literally connecting you to wholesalers. So you’re getting wholesale prices.
Carl: You’re website acts as a clearing house, basically of order processing. It’s almost like an EDS system where people place orders and the wholesalers get the orders and the wholesalers ship directly to the end user. And there’s nobody in between. This is unbelievable. We have to take a break. But everybody in the audience needs to go this website, Wholeshare, W-H-O-L-E-S-H-A-R-E.com. This has to be the future of the way you buy your products. You’ll not only save money, but you’ll have access to things that you don’t have access in your local market because the guy who does the buying for your local grocery store doesn’t wanna order that. Which is silly. You gotta check it out. Wholeshare.com.
Carl: I just started a group during the commercial break.
MH: Okay great.
Carl: This is how easy it is. You go to Wholeshare.com, and it asks you if you wanna… I forget the what the very first page was, but basically, I clicked the link, and it said, “Would you like… ” Oh, it asks you to find a group in your area. It said, “There’s no group in your area. Would you like to start one?” There’s no commitment necessary. I said, “Yeah.” I used my Facebook profile to start my group. So that it’ll probably reach out to some of my friends as well and let them know that I’ve started this group. And then it said, “Put your zip code in so we can show you some of the wholesalers that supply to your area.” And I clicked it. And it’s 950 different brands. I’m looking at it right now. I just messaged Elisa, because we buy Dr. Bronner’s Castile Soap at Trader Joe’s is $2.92 cents a bar. I’m almost positive that Trader Joe’s sells it for $4 a bar.
MH: Wouldn’t surprise me, yeah. Pretty possible.
Carl: And this is just like the first hit. I’m just looking at some of these things, I’m like, “Wow! This is amazing.” And again it connected me with the wholesaler, it even says on their website, I went to Honest Green Pantry.
MH: Right, right.
Carl: They supply E-retailers and grocery stores with products. And I’m gonna buy direct from them now.
MH: Right. And Honest Green is actually a division of UNFI, so you’re getting the same, you maybe familiar with UNFI, it’s basically the biggest natural food distributor in the country. They supply… If you go into Whole Foods, 50% of the products you see come from UNFI. So we’re talking about the exact same product you get at the Whole Foods.
Carl: Now here’s the other thing, the question, right? Everybody knows that when you order stuff online you get great prices but then once the shipping is added in it’s not so great. What about the shipping for these products?
MH: Shipping is free. So when you get to the minimum, the $330 minimum, zero shipping charge.
Carl: That’s amazing.
MH: Yeah, it’s all built in and that… You’re totally right, that’s where a lot of sites try to get you on the… You get great prices and then at the end you check out $20 shipping.
Carl: I think where really a lot of these new sites get you, and I’m not gonna mention any names, but there’s quite a few of ’em now that are popping up.
Carl: A one very, very aggressive one.
Carl: But they charge you a monthly, a membership fee, now they give you the free membership for three months, to get you into the program, but then Alica check them out, and I’m not mentioning names and it’s like, “Wait a minute, these products are cheaper from other sources that we’re buying now, why would we pay $20 a month to belong to a club to pay more for product and pay shipping on top of it?”
MH: Yeah. I think there’s a lot of other folks out there right now that are trying to figure out new models in the industry, but they’re all building their own infrastructure. There’s people building their own warehouses, doing their own deliveries, which means their prices have to be higher than wholesale. You know what I mean? Like they’re building extra layers on top of the supply chain.
MH: Whereas we’re talking about going directly to the wholesalers. We were talking about prices just before the break and we’ve done price comparisons with about 15,000 of our SKUs, compared to Amazon and we’re 25% less on average than Amazon. So there’s a lot of…
Carl: Then Amazon, and Amazon is always the cheapest on everything.
MH: Right, exactly. It’s an interesting thing, because the way we’re doing pricing right now, a lot of stores like grocery stores and like Amazon, those sell… You’re probably familiar with this idea of stores selling products as loss leaders?
Carl: Yeah, yeah, to get your goods. Because they know if you buy one thing, you probably buy all the other things you need as well.
MH: Right. Like so for example, most grocery stores super discount their bananas. So they’re actually losing money on bananas, ’cause people tend to go into grocery stores, look at the price of bananas and then say that’s a gauge for the whole pricing model in the grocery store. When the reality is, they’re just selling at discounts just to give you the sense that it’s really cheap. So we don’t do any of that loss leader stuff right now. So what that means is that, you might go on the site, you might see something on Amazon that’s a little cheaper, but the reality is on average our products are… We’re giving you the exact prices we get from wholesalers, the same level across the board. So when you come in, you might find some products that are cheaper on Amazon, but the reality is they’re marking up a lot of other products a lot more.
Carl: Now what areas of the country are you now still, are you doing perishables right now?
MH: Right. Right.
Carl: People who live in different areas of the country ’cause I know that’s a growing process right now.
MH: Right. So that’s a really great point. So the way we’re set up right now, is we have nonperishable products, 20,000 nonperishable products available throughout the whole country and that’s through this partnership with UNFI, where we’re shipping products directly out of their warehouses, like via UPS, they’re shipping directly out of the warehouse. So that’s really throughout the whole country, like I said 20,000 products, but 25% less than Amazon and what we’re doing though is we want to be, our ultimate goal is to have the full selection of the grocery stores. So we’re partnering with more regional and local distributors, like you said and also some farmers from farm co-ops. We’re starting in the northeast, so if you go on the site right now and you join and you’re in New York or New York state or New England or parts of Pennsylvania and New Jersey, those areas you’re gonna also get connected with local fresh produce and fresh meat as well. And that’s the goal is to expand throughout the country get the fresh products available throughout the country. Right now we’re starting with the nonperishable stuff, it’s kind of a backbone, but our ultimate goal is to have everything that’s fresh and local as well.
Carl: So I have a farmer that I do business with, that I buy beef, chicken and eggs from and they’re amazing. Should I refer them to you so they can reach out to you and say, “Hey, we can service this region here if you need any of these products?”
MH: That would be great. That’s exactly what we’re looking for. Our goal is to expand via the nonperishables and then see where we get interest, talk to our group, see what kind of products they want and work with the suppliers they know, to get the products they want.
Carl: Okay. We all know… Well, not everybody knows this, but anybody who’s ever produced a product for resale knows if there’s something called a MAP, the Minimum Advertised Price.
Carl: Are you guys bound by the minimum advertised price? When I go to Wholeshare is it really wholesale or we do have to… Or you honoring the MAP of a product and saying, “Look, we’re not gonna advertise this price any less than that” and if that’s the case can you guys do coupons, so you can actually get it down below the MAP. ‘Cause I know that manufacturers, as long as your not advertising below the MAP, you can sell below the MAP, if you use a coupon or some sort of special offer.
MH: Right, exactly. So that’s a great question. And I would say, MAP is kind of an issue for us, because we’re generally trying to sell product prices so low. But the MAP, it doesn’t affect a ton of our products. I would say that maybe under 5% of our catalogue actually has a MAP right now. But there are products, there’s sometimes products that we can’t show the price until you sign up, because of the MAP, but once you sign up we can say, “Okay, this is the pricing.” Sometimes we actually… We had once had a line that we just couldn’t carry at all, because our price was too low. They wanted us to just sell it at retail prices and we said no, we’re just not even gonna show it, if we have to sell as retail prices.
Carl: Yeah, that’s against your mission, you can’t do that.
MH: What’s the point? Yeah, so we have one line that we haven’t even shown, and then other times like you said, we can just say, “Hey, here’s a discount on this product, even though it looks like the retail price but it’s always on sale.”
Carl: You know what would be the most logical thing for you guys to do? Do Wholeshare of pennies, so when they buy a certain product, it qualifies for money to be put in their Wholeshare account so when they come back and order next time, that can be used as a discount and that’s how you can get the prices down closer to the wholesale without destroying the MAP.
MH: Right, right. So you’re right, there’s sometimes kinda thing you can do to get around it, but that’s exactly right.
Carl: Yeah, very very cool. So, how long has Wholeshare been around now Matt?
MH: We’ve been around for about four years. So it’s been an underground process for a while, but now that we have this partnership with UNFI, we’re able to service the whole country. So really excited about getting more people on there now and having these products available to everybody.
Carl: Do you have any kind of membership goal drives right now? Are you looking to sign up a certain number of people every month or something like that that we can inspire people, they can jump on board, or any call to action that we have right now?
MH: Well, we’re always just looking for people to start, to get on the site, start new groups in their area, we internally try to get 20 or 30 new groups signed up every month, but it’s actually been ahead of that recently, but, I think we’re just now basically coming out with these products that are available for the country so we’re doing a whole lot more publicity and doing a lot more reach through out the whole country so…
Carl: If I place an order with my group, and it’s four people in my group, does the order get shipped to each individual household or does it get shipped to one place and then…
MH: Yeah, so that’s… It’s through usually a communal location, so it’s either somebody’s house, or you can get it shipped to your work, we have a lot of places that have it shipped to their work, or your church or some place that’s gonna be convenient for everybody and that’s how you save, is by sharing all the shipping cost.
Carl: But when it’s shipped to one location, are the orders already broken out by this belongs to Geneen Jones and that one belongs to Terry Wilson, or do people have to go, “Oh, I ordered one bar of soap, that’s mine, I ordered one… ”
MH: Yeah, usually the way we have it set up, is there’s somebody usually in the group who organizes that process once it gets delivered, so somebody will usually do that splitting process when the order gets delivered at the group location.
Carl: So this really sounds ideal for families to me, a mom, a dad, they got a few kids, everybody gets together and signs up because they’re all gonna see each other during the week anyway, this sound to me like The Friends and Family Program from one of the cellular companies, just create a group with some family members.
MH: Yeah, exactly, you were talking about earlier, trends in the food-based people, learning more about the food that they’re eating and trying to eat healthier and how that’s growing, and I can’t tell you how many times we see families, people, who’ve just recently had children and that’s when they start to really think about their food, start to think more about what am I eating, what am I putting in my body and now I gotta give this to my kids. And so yeah, we see a ton of young families coming on the site trying to act as better food gurus just starting to learn about it and starting to think more healthy and sustainable of their eating practices.
Carl: And I think organizations that wanna build engagement with their clients should start a Wholeshare group at their location, for instance gyms.
MH: Yeah, we have a couple of gyms.
Carl: Yeah, because you want people to come in and train, you want them to be healthy, you want them to learn about nutrition, then start a Wholeshare group at your gym and get gym members to sign up because they’re gonna come to the gym Wednesday morning to do their cardio, they can pick up their food.
MH: Exactly. It’s like the community service it helps make your service more sticky, because people are coming… It helps people get in the door. Say, “Hey, come back, you wanna pick up your Wholeshare orders?” “Well, yeah.” And then you come into the gym.
Carl: Yeah, that’s a no brainer, that’s great. Okay so the website is Wholeshare.com, W-H-O-L-E-S-H-A-R-E.com, go there and start a group, it’s painless, and then let’s see what happens. I’m hoping that… So, now I started this group, how do my friends know I started the group if I don’t tell ’em? Do you use social media? Since I use Facebook to sign up?
MH: Yeah, you’re gonna have like a unique URL that you can share with your friends if you want and you can do it right through Facebook, there’ll be a button, once you’re in the site it will say, “Invite friends.” And it will say, “Post this to Facebook.” And you’ll have your unique URL for your group and people can got there and join, and it’s a seamless process and we sometimes will reach out to you, and help you, and say, “Hey, this is how you do it, here’s a couple of tips for getting people in your group.” But it’s pretty seamless.
Carl: This is awesome, I think people in Super Human nation ought to start groups in their area and let’s give this a whirl, because I think that we all wanna save money, that’s for sure, but we also wanna have access to products that a a lot of times… I’m finding this out myself, the buyer at this local whole foods for instance doesn’t carry something that they supply at another whole foods, because whatever reason, he doesn’t wanna buy that.
MH: Exactly, and now you’re going a step above and getting access to their whole catalogue, what they’re buying from.
Carl: Yeah, exactly, I’m gonna buy from their buyers, from their providers so I don’t even… I’m not a hostage of his any longer.
MH: Exactly, and then you take that to a whole another level where you don’t even have the stores in your community, you know what I mean? Where you can’t even decide what stores are available in your community, so it’s really about improving that access.
Carl: The website is Wholeshare.com, W-H-O-L-E-S-H-A-R-E.com, it’s a fantastic opportunity to help people become healthy and have access to healthy food, and do it at a cost savings as well. Matt, thanks for being on the show today.
MH: Yeah, thanks a lot, and if your listeners, if they sign up and they let us know they came in through Super Human Radio we can connect them with all the best products, make sure they know all the best stuff that we think your listeners will love.
Carl: There you go, you’ll get VIP treatment if you said you found out about it on Super Human Radio. Matt, thanks a lot man.
MH: Yeah, thanks a lot, great chatting with you.