La Fourche is only seven years old, but it was a very roller coaster for a French startup. During this time, online grocery retailers experienced a global pandemic, followed by the rise of venture-backed quick commerce startups that promised to deliver food items within 15 minutes and promised to break down that vertically.
Speaking to Nathan Labat, co-founder and CEO of La Fourche, he doesn't spend much time living in Flink, Getir, Gopuff, Gorillas and all Q-commerce startups around 2021. The startup is also VC back, but I took another pass.
Most of La Fourche's stock is made up of long-life healthy, organic products. Think olive oil, diapers, cereals, shampoos, and coffee beans.
“I divide it into three purchase patterns. There is one purchase pattern. This is a simple refill. 'What will you eat tonight?' – that leads to a very low average order value: €20 to 30 euros,” explained Labat.
“Then you have a weekly pattern, where you plan more and go buy fruits, vegetables, fresh produce, etc.” he continued. “Then we have an inventory opportunity, which means filling the cupboard for a month and a half.
“These are three very clear patterns. And we are really clearly identified as a corporation.”
The company offers just a handful of options for each product category, covering the needs of its users wide range of users without overwhelming their options. We also offer our own branded products.
In a way, Lafechet is trying to distinguish its offering from what can be obtained from traditional supermarket chains and their delivery services.
“There's a lack of consumer trust,” Labat argued, “a overwhelming catalogue that includes terrible things, everything you already know as a consumer, and that led to the rise of Yuta.”
Headed towards 100 million euros revenue
With LA Fourche, customers pay an annual membership fee to sign up. It currently costs around 60 euros per year ($65.50 at the current exchange rate). Customers will then not pay shipping charges for orders exceeding a certain threshold.
On this front, Labat names Costco and Thrive Market as inspiration. (However, Amazon Prime is probably the best known user of the distribution membership model.) Subscriptions can create brand loyalty, increase retention, and even improve average order values.
Instead of firing out a subscription to get your diapers, customers can get all these products from La Fourche, as the other gets fresh coffee beans and the other is for personal care products.
“The subscription model is becoming more and more common,” Labat said. “In food, it's interesting because you can offer something like 'one subscription to control everything'. ”
Nathan Labatimage, Co-Founder and CEO of La Fourche Credit: La Fourche
La Fourche metrics tend to support these assumptions. The company currently has 120,000 members. On average, they order products worth around 120 euros once a month or every 45 days.
Overall, La Fourche says it is well on track to generate 100 million euros total goods in 2025.
The startup's unit economics have also been improved. “We went from -15% of the EBITDA margin to -9% last year. This year we're doing well at -2%,” he said.
Part of the reason why La Fourche's business model appears to be working is that it's a good measure. Most of La Fourche's customers come from referrals, so the company doesn't need to increase its marketing spend. The startup says it spends around 5% of its revenue on marketing.
Another big reason is that Rahulche only has one warehouse covering the entire country. It is now an automated warehouse and is built using Autostore's technology. “We have a relatively asset lighting model with a high recurrence rate,” Labat summed.
An additional benefit is that 46% of La Fourche customers live in the countryside. This is not a startup that serves customers who live in big cities as they already have many options for grocery shopping.
Second, Rahulche wants to grow its German customer base. So, they recently launched an online organic supermarket under the brand name Ackerherz. Additionally, further geographical expansions in the future could occur if the model could be replicated in various countries.