Tour Recap: Good Eggs Food Hub

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New York City–often portrayed as a world capital of takeout–has seen a boom in recent years in cooking at home as the “foodie” craze has ramped up. Still, New Yorkers have ways of keeping their favorite part of takeout–the delivery–as a central feature of home cooking. Grocery delivery services have become a major force in New York’s food distribution system, an increasingly crowded field dominated by companies like Fresh Direct, Amazon’s Amazon Fresh, Instacart, and Peapod.

On August 3rd, Open House New York organized a tour of Good Eggs, a Brooklyn-based online food delivery service in East Williamsburg operating at the opposite end of the scale. Good Eggs bills itself as a “farmers’ market meets online grocery,” and has taken on the mission of connecting smaller regional and local farmers and food producers to the urban market.

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Good Eggs’ Brooklyn food hub was located in a warehouse in East Williamsburg, near the Newtown Creek. (Photo: OHNY)

As Open House New York learned on an earlier tour to the Hunts Point Produce Market, the scale of operations at the city’s food distribution center in the Bronx is such that many smaller producers cannot compete; they simply cannot provide their products in large enough quantities to do business with the wholesalers that supply so much of the New York’s food. As Produce Market manager Myra Gordon lamented at the time, this is despite the fact that produce wholesalers are seeing soaring public interest in purchasing locally produced food—a greater priority for more people, Gordon observed, than organics.

Good Eggs was founded in 2011 to take advantage of the connectivity that the internet makes possible. After establishing a foothold in San Francisco, the company expanded, opening local food hubs in Brooklyn, Los Angeles, and New Orleans. The Brooklyn outpost had a markedly youthful feel, especially compared to more established, large-scale distribution centers like those in Hunts Point. The space, large and bright, was designed for maximum flexibility, with very few fixed features.

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The humble plastic bin is the central organizing unit of organization within Good Eggs’ distribution system. (Photo: OHNY)

The tour, led by Good Eggs’ marketing director Summer Rayne Oakes, began in the morning, shortly before deliveries began coming in. As things picked up, employees began to rearrange metal racks containing hundreds of plastic bins, rapidly transforming the open central area of the warehouse into a temporary repack room. Before long, the bins were filling up with everything from fresh produce to locally manufactured frozen foods. Good Eggs kept almost no food at the warehouse on a long-term basis; the facility served only as a distribution center, taking in perishable goods that had already been sold, packing items together to fulfill orders, and sending the food right back out as quickly as it came in.

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Over the course of the tour, employees rapidly transformed the open central area of the warehouse into a temporary re-pack room. (Photo: OHNY)

Oakes noted that Good Eggs’ model was very hands-on, and that the operations team at the Brooklyn food hub worked closely with the vendors that sold on the company’s online site to ensure that the platform was a good fit. Once a vendor had established an online presence, Good Eggs then helped them to expand their reach, both through the sale of new products and through growth beyond the immediate area. The company was committed to minimizing food waste, and a surplus or shortage at one food hub could mean an opportunity for a vendor to think bigger. “Every food hub goes through cycles,” Oakes said, “so we do trade things with other [Good Eggs] hubs. We also try to give food makers opportunities to spread their wings and test out expanding into different markets.”

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“The idea of moving from a technology company to a food distribution company, as the business evolved, was a huge shift,” explained marketing director Summer Rayne Oakes, center. (Photo: OHNY)

Face-to-face interaction is as a cornerstone of the food industry, and it was no different at Good Eggs. Even for a technology company focused exclusively on online sales, Good Eggs relies heavily on these same kinds of direct relationships with their vendors on the back end. “The idea of moving from a technology company to a food distribution company, as the business evolved, was a huge shift,” Oakes explained.

Sadly, despite its best efforts, Good Eggs had difficulties making this shift successfully—at least in New York. Just two days after the tour, the company’s founder announced the abrupt closure of the food hubs in Brooklyn, Los Angeles, and New Orleans, refocusing efforts on Good Eggs’ home market of San Francisco. According to founder Rob Spiro’s blog post explaining the decision:

What we didn’t fully understand when we started was that we were creating a new category that required a different approach to supply chains, logistics, and commerce – all of the pieces of getting food from local producers to the kitchens of our customers…The single biggest mistake we made was growing too quickly, to multiple cities, before fully figuring out the challenges of building an entirely new food supply chain. We were motivated by enthusiasm for our mission and eagerness to bring Good Eggs to more people. But the best of intentions were not enough to overcome the complexity. Today we realize that in order to continue innovating in San Francisco, our original market, in order to continue figuring out all the complexity that is required to achieve our mission, we cannot productively maintain operations in other cities.

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Insulated packs allowed Good Eggs to deliver food kept in its huge industrial refrigerator directly to customers’ doors without breaking the cold chain. (Photo: OHNY)

With Good Eggs gone, a creative link between customers and vendors has been severed, reducing access to locally produced food despite surging demand. This will inconvenience customers but, as Eater detailed in an article shortly after the news broke, it will have an outsize impact on the vendors that came to rely on Good Eggs’ platform—especially the small producers that scaled up their operations at Good Eggs’ suggestion. It further underscores the high level of risk involved in running a food business, especially at smaller scales.

For these businesses, the high costs of the ‘final mile’ in the urban food distribution chain can often prove prohibitive, and there’s not likely going to be a simple solution. As with many systemic challenges facing the city, the answers to the question of how to connect New Yorkers to local and regional food will necessarily be as varied and complex as the city itself.