“Whole Foods-type products at Costco-like prices.”
That’s how Thrive Cofounder and Co-CEO Nick Green, speaking to Fortune, describes his company.
Launching late in 2014, Thrive Market is an online-only retailer of natural and organic products, whose revenue stream comes mainly from its $60-per-month subscription fee. The idea, the Fortune story puts forth (and as Green stated directly in the above quote), is to cater to high-minded grocery consumers with the lower prices more traditionally aligned with conventional supermarkets (as opposed to those found, for example, at the aforementioned Whole Foods).
The subscription-based company, Green tells Fortune, currently has about 150,000 members, with 20,000 new ones joining per month.
“We can’t scale the infrastructure fast enough to service the demand,” remarks the cofounder, noting that Thrive is approaching a $100 million dollar run rate.
Thrive’s latest step to compete with brick-and-mortar stores is the introduction of its own private label. The first Thrive-branded product, coconut oil, was released in November; the second, organic tomato sauce, arrived on the site last month. Green told Fortune that Thrive plans to develop about 100 items in the first half of 2016.
The Thrive private label products — which will only be available online, not sold in stores — will, Green tells the outlet, primarily cover categories in which third-party brands don’t have the margin to cover the cost (be it that they cannot match the conventional supermarket prices, or the goods are heavier and, therefore, cost more to ship or the product is already low margin).
At the top of Thrive’s list to private label, according to Green, are flour and cider vinegar.
While Thrive’s catalog of products might be most similar to that of Whole Foods (albeit not when it comes to price), the Fortune piece notes that Thrive is also similar to Trader Joe’s in that the company limits the amount of SKUs it carries to the top few brands in each category.
Yet another way in which Thrive distinguishes itself from similar startups, the outlet notes, is that — rather than focusing on fresh items — it only deals in nonperishables. Green says that those products account for about half of a typical grocery bill.
“It’s where no one else wants to play,” he tells Fortune. “Fresh food is a blood bath right now. We said, let’s look at the part of the grocery that really shouldn’t be in the grocery store.”
Green predicts that, within 10 years, packaged goods will actually no longer be at the center of the grocery store, as they are today, instead going the way of books: purchased with far more frequency online than they are at rapidly disappearing brick-and-mortar bookstores.
“There will be a multi-tens-of-billion dollar eCommerce player in natural and organic consumer packaged goods in the next five years,” concludes Green. “It’s just a question of whom. We have a two-year head start.”