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[7 comments]

Farm to trunk service succeeds nationwide

April 29, 2014

Meat lovers rejoice! Now you can get high quality beef, chicken, fish and pork delivered in bulk at low prices to a church parking lot near you.

Zaycon Foods is a direct-to-consumer service, which fills large refrigerated trucks with meat that is then placed in the trunks of consumer cars on a regular schedule. When a consumer shows up to get an order, they need only flip open their trunk as the Zaycon driver processes the order on an iPad. According to the company, it currently has 350,000 customers across the U.S. Zaycon says its has customers in almost every state in the union.

Customers, who like the bulk savings, swear the meat tastes better than what they can buy in grocery stores.

"The chicken breasts are fresher," Stacy Medrano, a Zaycon customer, told USA Today. "There's no smell, there's no foul taste or sliminess to them. They're bigger and juicier, just overall better quality."

"Our chicken is in customers' homes within just a few days after it is slaughtered, compared to 15 to 20 days for the typical grocery store," Mike Conrad, Zaycon cofounder, told Fast Company.

[Image: Zaycon Foods]

One goal of Zaycon is to eventually source all its products locally. Right now, the company primarily sources meat from larger farms in Florida, Georgia and Louisiana because it doesn't have enough customers in other markets to buy from local producers.

Zaycon, which doesn't maintain an inventory of the meats it sells, has seen demand for its deliveries steadily increase. The company had about 2,500 delivery events in 2012 and saw that number more than double in 2013. Sales over that period went from $10 million to more than $16 million. Mike Conrad, co-founder of Zaycon Foods, told the Journal of Business in Spokane, WA that the company is profitable.

Discussion Questions:

Do you think there is pent up demand for services such as Zaycon in meat and other fresh categories? What do you think other store-based and online retailers will take from Zaycon’s success?

While we value unfettered opinion, we urge you to show respect and courtesy for people or companies about whom you comment. Keep in mind that this is a public, professional business discussion. RetailWire reserves the right to edit or refuse the publication of remarks that we deem unsuitable. We may also correct for unintended spelling and grammatical errors.

Instant Poll:

How big an upside do you see for Zaycon Foods and similar services?

Comments:

Oh my gosh, I'm 12 again! How many times did my parents fill the basement freezer with a quarter of a cow, 26 chickens, 48 pounds of hamburger and goodness knows what else? All from some guy with a refrigerated truck.

I know it's not the same thing...but I love the idea! Almost like going right to the farm to get your food.

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Ian Percy, President, The Ian Percy Corporation

Zaycon is like Costco on steroids. The quantities are large, designed for families or for a group of people to share. If they can maintain the quality of their products and keep prices competitive, Zaycon could hurt grocery store sales, as customers move towards fresh foods that are locally grown.

Traditional grocers are feeling the pinch no matter which way they turn. Costco, Walmart, Trader Joe's, Amazon Fresh and now Zaycon are all challenging them for consumer wallet share. Grocers can go upscale with products and services or can compete on price. Those that choose the typical high-low middle will get hammered.

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Max Goldberg, President, Max Goldberg & Associates

There is demand for the Zaycon approach, but it will not replace the supermarket. There are restrictions like what item is being offered, once a truckload is sold out they don't accept more orders, and the product line is very narrow. The takeaway is fresh is better and it helps to reduce the supply chain time. Carrefour has a field-to-store program for produce that accomplishes the same thing.

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W. Frank Dell II, CMC, President, Dellmart & Company

Aren't we all looking for something new and exciting? Zaycon is tapping into the consumer's quest for a new shopping experience (even if it's in a church parking lot). I'm not sure this concept is scaleable to a large degree, but that's not to say that it's not a good idea.

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Kevin Graff, President, Graff Retail

Zaycon is a modern version of the freezer plan. With the requirements of prepayment, a minimum order quantity of 40 lbs., a wait time between ordering receiving delivery of typical of three to six weeks, and the need for a large enough freezer at store the order, I don't see this becoming the next big trend in food retailing.

It will definitely appeal to a segment of the population, but not enough to be disruptive to the supermarket industry.

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Steve Montgomery, President, b2b Solutions, LLC

The part of this business model I like is that it is a pure "produce to order" inventory management approach. If you have ever worked for a food manufacturer, and particularly a fresh meat or produce producer, you know this is the Holy Grail of profitability.

Add to the financial benefits of that the obvious appeal of "farm to table (almost) fresh," bulk savings, and the (assumed) fact that you "know where it came from" and this does have a lot of appeal and timeliness. It's not quite as good as managing the entire field to table process yourself -- but that just isn't a real possibility (or desire) of most consumers today.

As Steve Montgomery points out, the bulk storage requirements may be a deterrent for some. But I doubt these trucks are parking in downtown Chicago lots -- more like the near-in upper-middle class burbs or even the ex-urbs.

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Ben Ball, Senior Vice President, Dechert-Hampe

I'm sure I'm not the only one for whom this calls to mind the the "I Love Lucy" episode "The Freezer."

As far as "pent up demand," Notcom's Fifth Law of Retail Dynamics: The Bigger the quantities, the smaller the overall market.

'notcom'

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