B Corp Certification Helps Businesses Define What’s Important for Them and Their Investors
When Dhruv Sood and Husein Rahemtulla drew up business plans on a napkin at lunch in 2014, they didn’t expect to find themselves five years later owning and operating Fresh Prep, Vancouver’s top meal kit delivery service, employing over 230 team members and delivering to thousands of customers across British Columbia.
In all honesty, they started Fresh Prep with fellow co-founder Becky Brauer for the challenge and the desire to do something they really enjoyed. They didn’t expect Fresh Prep would grow so rapidly to where it is today, completing their first round of funding in December 2018 for a total of $3.3 million with plans to expand to new regions in Canada.
Meal Kits: Fad or Here to Stay?
In the competitive meal kit market, companies rise and fall. One of the first meal kit companies, Blue Apron, was nearly delisted from the NYSE due to falling stock value, and Chef’d closed operations, while others have been acquired by category leaders and grocery stores. Are meal kits here to stay, or were they just a fad that disrupted the food industry for a few years?
We’re saying it here first: Meal kits are here to stay. The key to any business is to remain agile with an ability to innovate and address changing trends and customer needs. One way Fresh Prep is doing that is by addressing a major criticism of meal kits: the amount of packaging that comes with a delivery. Each ingredient is often packed in single-use plastic, arriving in large cardboard boxes with insulation and multiple ice packs. Customers find it overwhelming to deal with all the packaging and feel guilty about the amount of trash they’re left with. But Fresh Prep has a solution for that.
Growing a Big Idea
Fresh Prep started small and is still relatively small compared to the likes of Blue Apron and HelloFresh. Staying small is an advantage for Fresh Prep in this case, allowing the company to be nimble and make changes quickly.
One of the radical goals the Fresh Prep co-founders had from the start was to become the most sustainable meal kit on the market. Before a focus on single-use plastics, before grocery bag and straw bans, they believed there was a better way to deliver meals kits without excess use of plastic packaging. In their eyes, convenience didn’t mean sacrificing the environment. Although Fresh Prep offers the most sustainable meal kit on the market, that isn’t enough.
Fresh Prep is working to take its service beyond the borders of British Columbia. Growing quickly and sustainably has always been the name of the game, but one of our challenges was obtaining the needed capital to achieve this expansion. When the company set out for its first round of funding, it faced a few hurdles. First was the challenge of communicating that we had a business model with proven profitability and that meal kits remain a “safe bet” for investing. Secondly, when Fresh Prep was in the midst of applying to become a Certified B Corporation, we needed to make sure potential investors aligned with our values.
Finding the Right Partners
To find investors is the easy part. To find investors who understand and champion your vision is another task entirely. Fresh Prep partnered with First West Capital to lead the first round and found private impact investors in the local finance industry. Our investors understood our vision from the start and shared our belief that companies have a responsibility to improve society.
This also ties in with why Fresh Prep decided to become a B Corp. Our founders wanted to ensure that no matter who was a shareholder, the values were never in question. Having B Corp certification aligns the company’s values and defines what’s important, but investors also have to buy into this concept and know that we will work to serve all of our stakeholders.
One of our values at Fresh Prep is to always innovate. Another is to nurture the future. We cannot do either without having partners who understood the importance of putting our people, our community and our impact on the environment as a priority in all our actions and decisions. We want to build a valuable company while ensuring that short-term interests never come at the cost of sacrificing our vision and impact on society.
If you’re looking to scale your business, our word of advice would be to always stay true to your values and establish them early. Your investment partners will better understand why the business exists. They’ll also appreciate knowing how decisions are made and what’s of importance to you. This process also should match up with their values—and if it doesn’t, it’s OK for both parties to move on. Finding the right investment partners is a crucial part of growing responsibly, and we’re glad we found the ones we have on board while Fresh Prep works to become, officially, the most sustainable meal kit on the market.
B the Change gathers and shares the voices from within the movement of people using business as a force for good and the community of Certified B Corporations. The opinions expressed do not necessarily reflect those of the nonprofit B Lab.
Food for Thought: Growing an Idea with Partners Who Share Your Values was originally published in B the Change on Medium, where people are continuing the conversation by highlighting and responding to this story.
