Zero Grocery, a San Francisco-based plastic-free food delivery service, is expanding to Los Angeles, just a year after launching. The company is one of the first plastic-free grocery delivery services in the United States, with a mission to make cleaner, healthier and cheaper food convenient while tackling the impact of plastic waste from food consumption from its root – by only providing food in sustainable, plastic-free packaging.
“I started to live plastic-free because I wanted to challenge what happens when an ordinary working woman like me, with problems and life and issues and just the day to day, tries to live this lifestyle,” Zuleyka Strasner, founder and CEO of Zero, told The Plug. “I have seen the zero-waste movement growing and I’m mostly a lazy consumer. I want stuff now. I want stuff quick. I want stuff at the right price, and I’m busy. And I found it really hard to live plastic-free.”
Grocery delivery services have seen a drastic increase in demand following the coronavirus pandemic, and are expected to continue growing. According to market research company eMarketer, online grocery sales are expected to reach $129.72 billion by 2023, accounting for nearly 10% of total grocery sales, and were predicted to have grown by nearly 53% in 2020, reaching $89 billion in sales. But plastic-free grocery delivery services are scarce.
Since launching in 2019 Zero has amassed $4.7 million in venture backing. This includes the first $500,000 in pre-seed funding, led by Precursor Ventures, but it took Strasner over 250 investors meeting before her first check.
The initial investment allowed Strasner to launch a beta service in the Bay Area to test out sustainable grocery e-commerce. After six months in beta, in November 2019, Zero launched publicly across the Bay Area and grew quickly, securing an additional $500,000 in funding, including from new investors Chingona Ventures and Cleo Capital.
However, everything changed in early 2020 when COVID-19 hit the United States.
While the pandemic saw giant retailers struggle to meet the demand for specific items, Zero’s supply chain focused on bulk purchasing and plastic-free products, which is a different stream of suppliers from the individually plastic-packaged products bigger retailers normally work with, allowing the company to supply its customers with goods they would not be able to find elsewhere. The demand for Zero’s product grew exponentially.
By the end of March 2020, Zero saw an increase in demand, raising an additional $700,000 in funding, this time from Incite.org, Gaingels, Arlan Hamilton and MaC Ventures. To meet demand, the company grew from six employees to a couple hundred, now have thousands of customers in the Bay Area, most of which are subscribed members, paying $25 a month for Zero’s services.
Zero closed $3 million in its last round of seed funding, led by 1984 Ventures, with Arlan Hamilton, AVG Basecamp Fund, Bluestein Venture and over a dozen more investors contributing to the raise.
Strasner’s journey to Zero started when she traveled to Little Corn, Nicaragua, for her honeymoon. The small island of approximately 1,200 people, located more than 3,000 miles away from their home in the Bay Area, had a plastic problem—not from its local plastic usage, but from plastic that would wash up ashore.
“I’d seen a population of Black British, in a former British colony, English speaking population, on a beautiful island who themselves are pretty eco-conscious, who don’t have a lot, being swamped by plastic because of consumerism washing up on their shores,” Strasner said. “That disconnect just struck me”.
According to the United Nations Environment Programme, 1 million plastic drinking bottles are purchased every minute globally, while up to 5 trillion single-use plastic bags are used worldwide every year, with half of all plastic produced being designed as single-use. Today, about 300 million tonnes of plastic are produced yearly.
It is estimated that only 9% of all plastic is ever recycled, 12% has been incinerated, resulting in 79% of plastic accumulating in landfills or the natural environment. Approximately 8 million tonnes of plastic end up in the ocean every year, a significant amount affecting small islands like Little Corn.
Services like Zero’s can also have positive implications for other societal issues beyond environmental protection and justice, including food insecurity and access to healthy food for underserved communities.
“The lack of reliable and affordable transportation and access to healthful food is a key challenge that can be mitigated with online grocery delivery services.” Tawanna Dillahunt, an Associate Professor at the University of Michigan’s School of Information who has researched online grocery delivery services and food disparities in Detroit, told The Plug.
“With COVID-19, there are other issues that have arisen, for example, those with underlying health conditions might not feel safe in stores or traveling to them. So, online food delivery services are playing a key role,” Dillahunt said.
Tayo Fabusuyi, a research faculty at the University of Michigan Transportation Research Institute, and his team conducted a study in Detroit which found that an estimated 20,808 households are transit-dependent, Supplemental Nutrition Assistance Program (SNAP) recipient households and without access to the internet.
“The Covid-19 pandemic has really brought to fore the perilous situation food-insecure households are in,” Fabusuyi told The Plug.
At the height of the COVID-19 crisis, around April 2020, when public transit was running at about 16% of its normal ridership in Detroit, households were in a precarious situation, unable to use food delivery services such as Postmates, Grubhub, Doordash or UberEats, according to Fabusuyi.
One of the challenges for companies like Zero will be getting traction in smaller communities and what portion of the population would actually use the services. “The challenge is that it is really difficult getting data that passes the smell test on which these decisions could be made,” Fabusuyi said.
Focusing on Miami-Dade County, Fabusuyi and his team conducted a study to generate demand estimates of online delivery purchases by using the national household travel survey (NHTS) data and synthetic data from Southeast Florida Regional Planning Model (SERPM), finding that multiple imputation, a method that creates different plausible sets of data to account for missing data, leads to better estimates of demand for online delivery services. Additionally, regional metropolitan planning organizations (MPOs) are also carrying out surveys like the PSRC Household Travel Survey to address this issue.
The USDA Food and Nutrition Service agency is piloting a program that allows SNAP to be used for online grocery delivery services with providers like Aldi, Amazon and Walmart. However, Fabusuyi warned that purchases are typically restricted to eligible food items and delivery fees and tips are not covered by SNAP benefits, although states may have some flexibility as to how they implement the pilot. Equally important, options of ordering should go beyond the internet to voice prompts and via secured text messages, he added.
Strasner believes that tackling food insecurity also relates to the way the food supply chain system is architected, with the many players involved and the lack of technology currently in place resulting in people struggling with food insecurity.
“Price remains a huge determinant, and you, therefore, cannot affect the price if you buy a product from a middleman or a secondhand distributor,” Strasner said. Controlling the technology would allow control of who touches it, how they touch it and identify where the markups happen, according to Strasner.
“We have real problems on earth that we need to start by fixing, one of those is food, and how we get our food and how we consume our food, and that’s always been a big driver. Zero is becoming the largest sustainability platform in the U.S.,” Strasner said. “We are fast becoming one of the largest tech-enabled grocers in this country, not an ecommerce store, not an online grocery store, but a tech-enabled grocery solution within this country.”