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Natural Foods Merchandiser

Virtual natural market Thrive is an 'online marriage of Costco and Whole Foods'

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Jeremiah McElwee, VP of marketing and merchandising for the new virtual market Thrive, likens the business model to an online marriage of Costco and Whole Foods Market.

The latest online marketplace for natural foodies launched in early November, and it’s already attracted thousands of customers, surpassing even its four-month initial growth projections.

The secret? Bargains.

Thrive Market sells annual memberships that allow shoppers to browse the online store and buy groceries—from crackers and protein powder to vitamins and facial oil—at prices well below typical retail prices.

Low prices + convenience + select products

Jeremiah McElwee, VP of marketing and merchandising for Thrive, likens the business model to an online marriage of Costco and Whole Foods Market. Customers buy a membership with the faith that the amount they’ll save by shopping there will more than recoup the $60 fee they paid to join. The company, which is a non-GMO operation, emphasizes organic food and non-toxic cleaning and has abundant options for varous dietary restrictions and preferences.

“We’re really trying to keep a very targeted offering in each category, where the items are the best of the best,” McElwee said. “You have this really nice, curated mix of products to choose from that are the best-in-class of organic, non-GMO, vegan, raw, paleo and gluten free. However you like to shop, you can go on and just get your mix.”

Paid membership stands at a little more than 3,000 people right now, McElwee said, although more than 40,000 people have registered to be able to poke around the site. Those people can also sign up for a month-long trial membership, which the company offers newcomers before they have to commit to the annual natural retailer Thrive Market

The login is the key to Thrive’s ability to sell at prices so far below retail. By not publicly advertising prices—other than to say they average 25 percent to 50 percent less than retail—and listing them only behind a firewall, McElwee said the online store can still honor minimum advertised price agreements and stay on good terms with suppliers. The company does not ask suppliers for any more of a discount than standard retailers receive, he said; Thrive’s markup to customers is just lower. The company plans to generate its profits through the membership fees and by simply churning out volume.

Thrive takes care of its own distribution, operating out of a warehouse in Culver City, California, where the company is based. The warehouse is a modest 4,500 square feet, but the company will move that to a 30,000-square-foot space next month. Orders are shipped via FedEx, and orders over $49 are free to customers.

A bigger mission

Most surprising is that Thrive is joining the one-for-one bandwagon: For every member that joins, it will give away a membership to a low-income family. For skeptics of the one-for-one model, McElwee said they’re making an effort to ensure the donated memberships actually do provide some real benefit. The company is partnering with the Boys and Girls Clubs of America to identify families who might be interested and eligible. As part of that work, they’re also doing outreach to communities and trying to provide health and nutrition education.

Thrive's larger goal is to make healthy food more accessible to everyone. In many low-income communities, healthy food is often more expensive, if it’s available at all. “Those are the groups that need access to healthier choices the most,” said McElwee. “They’re often on food stamps, or have very little discretionary income, and they’re buying the cheapest food they can find. And unfortunately in the standard American diet, that’s often high-sugar, high-fat, calorie-dense foods that are really unhealthy.”

MeElwee said they’re also working, albeit slowly, toward being able to accept SNAP (food stamps) benefits as payment for the online purchases.

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