THE STORY

Digital reimagination of an existing Edmonton-based meal prep business with the intention to scale throughout Canada and ultimately the US.

Muscle Meals was an Alberta-based meal preparation company focusing on healthy meals. The company operated its services from a community-center kitchen after hours. The agreement with the community center was that the company would prepare meals for the community center clientele during the day and could use the kitchen after hours for its business.

The company was operated by two owners where the chef was the primary owner and the CEO was a minority shareholder. The company was generating $800K in revenue but was unprofitable.

Discovery work conducted by the BoCG team revealed an unbalanced revenue-to-cost structure. Annual revenue was around $800K with food costs of $500K and salaries of $300K. Once all the overhead was accounted for, Muscle Meals was losing $100K per year. In addition to being unprofitable, the company also had a considerable tax debt.

THE SOLUTION

Muscle Meals was an unsustainable business in the long run and required a total reboot. The first order of business was to reorganize the operations under a new entity called Mealife. A new management structure was put in place and the original founder was bought out and the tax debt was paid off.

With a new entity, the BoCG team set about cleaning up the operations of the company. The main area of concern was the food cost at 50% of revenue. By consolidating the menu around key ingredients, and centralizing manufacturing in a state-of-the-art industrial kitchen, the cost was lowered by 80% to below 10% of sales. This new food cost structure was able to support a $9.99 per meal price with free shipping.

A key part of the plan to scale Mealife across North America centered around the efficiencies around industrial kitchens. To ensure the ability to deliver on the company’s value proposition “fresh delivered meals” franchise industrial kitchens would be strategically established to service customers within a 100 a mile radius. The franchise option allowed Mealife to scale its business through the combination efforts of sales representatives and franchise kitchens. To prove the profitability of the idea, the plan called for Mealife to set up the initial kitchen in Edmonton, Alberta.

Mealife wanted to create scale by implementing a direct selling model around the $9.99 meals. The BoCG teams designed a compensation plan that compensated the sales representatives for referring new customers. The team outlined a roadmap for a complete technology backend to facilitate order taking, meal delivery and commission payment. A front-facing e-commerce website was devised to facilitate a swift and efficient order-taking and delivery scheduling process.

The buyout of the original founder, the initial buildout and setup of the corporately-owned industrial kitchen, direct selling setup and technology integration required funding. The BoCG team, in conjunction with Mealife management, raised $1.1M in capital to fund the project. The team also recruited a 120-person strong sales representative team to conduct the initial company launch.