Business

The Produce Box takes a fresh approach to food delivery

The Produce Box home delivery service provides fresh vegetables to customers

VIDEO: The locally owned business has grown to be a statewide force in the nine years since Courtney Tellefsen brought her idea to fruition. Network of farmers and local delivery people gives customers option of fresh and locally grown produce.
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VIDEO: The locally owned business has grown to be a statewide force in the nine years since Courtney Tellefsen brought her idea to fruition. Network of farmers and local delivery people gives customers option of fresh and locally grown produce.

The Produce Box is in the business of making it easy for people across the state to support local farmers.

Last week, the Raleigh-based company delivered nearly 7,000 boxes hand-packed with a variety of fruits and vegetables directly to the doors of customers across the state. The Produce Box epitomizes the “buy local” movement, relying on about 40 North Carolina farmers for its goods as well as 90 artisans that make cheese, breads, sauces and other food products.

“The farmers market is the best way to support local farmers. We’re the next-best way,” said founder and CEO Courtney Tellefsen. “It’s just that most people can’t get to the farmers market every single Saturday. So we’re the alternative.”

Today, Produce Box, which was launched in 2008, has more than 10,000 members who pay an $18 annual enrollment fee that entitles them to purchase boxes that are stuffed with a variety of produce from A to Z – acorn squash to zucchini. The boxes – sporting the company’s logo and the admonition “Eat Your Veggies!” – are delivered weekly except for a six-week period from late December to early February. Members also can supplement the boxes by ordering cheese, breads, etc.

The boxes vary depending on what’s in season and range in price from $23 to $38 for the Grill Box, which includes local meats. But there’s no obligation to buy one of the different box configurations offered in a given week. Customers can skip as many weeks as they want.

“We have some members who have gardens,” Tellefsen said. “They only buy from us in the spring and fall.”

The Produce Box is part of a wave of companies whose business model relies on home delivery of food. Businesses such as Blue Apron and HelloFresh supply all the ingredients you need for a home-cooked meal. Amazon, Peapod and some supermarkets deliver groceries.

“There was no such thing as delivery to your door when I started,” Tellefsen said. “Now everybody delivers.”

But that hasn’t hampered the privately held company’s growth. In 2015, it generated about $7 million in revenue compared with $5.9 million the year before. Last year, it made the Inc. 5000 list of the nation’s fastest-growing private companies based on its 159 percent revenue growth over a three-year period.

This year, it will deliver more than 2 million pounds of food that are boxed at the company’s 40,000-square-foot warehouse and headquarters off of Tryon Road, where it employs 12 full-time workers and 40 part-timers. The company also has nine part-time drivers and more than 200 neighborhood coordinators across the state – many of whom are stay-at-home moms – who provide door-to-door delivery to their neighbors each week.

Produce Box’s members run the gamut.

“We have foodies that are very knowledgeable about product handling and preparation, and we have novices that want to support the local food system and have never cooked much in their lives,” said Kevin O’Connell, director of operations and a minority partner in the business.

Penny’s Produce, a 110-acre family-owned farm in Willow Springs, delivered nearly 6,000 pounds of squash, pickling cucumbers, spring onions, red potatoes and cabbage to Produce Box last week.

The farm has been a Produce Box supplier for five years, said Jonathan Penny.

“They’re consistent with what they want every week,” he said of Produce Box. “They use a large quantity every week.”

Another plus is that Produce Box pays cash upon delivery.

“It helps out a lot,” Penny said. “Less paperwork you have to keep up with.”

Face of the business

Tellefsen, 47, started the business after getting fired up about buying locally grown food for her family and discovering that a community-supported agriculture subscription, which calls for paying a farmer upfront for a weekly box of produce, didn’t work for her. For one thing, picking up her box at a local parking lot each week conflicted with swim team practice for one of her children.

Figuring that she wasn’t the only one who needed an alternative, she recruited about 25 neighbors in the Quail Hollow neighborhood of Raleigh who were interested in receiving weekly delivery of boxes of produce that were prepared by a local farmer. Tellefsen delivered them herself.

“They would tape a check to the back of their porch, I’m not kidding you,” she said. “I would pick up the check and drop off the box.”

When people in other neighborhoods began contacting her and asking whether they could get boxes too, she told them that she couldn’t deliver elsewhere but they were welcome to come to her house and pick them up. When they also started picking up extra boxes for their friends, she offered to pay them for their distribution efforts.

A business model was born.

The neighborhood coordinators are in many ways the backbone of the company, providing much more than just a delivery service; they’re the face of the company.

“We decentralize customer service,” Tellefsen said. “These are their customers. (The coordinators) do all the customer service and they do the marketing.”

Coordinators earn anywhere from $50 to more than $200 per week, depending on the number of deliveries, and also can earn free boxes of produce based on performance.

“Most of our coordinators were professional women before they had kids,” Tellefsen said. “They are looking for a way to use all of those great skills that they cultivated in their work life and have it be meaningful.”

Keeping busy

Dorsey Manning, 36, who lives in Raleigh’s Five Points neighborhood, is a coordinator who views her weekly deliveries as a welcome break from attending to her three children who range from 19 months to 6 years old.

“It’s nice to be out and about in the world with other adults again,” she said. “I feel like I’m a part of something. I like what this company stands for. It’s helping farmers, helping people eat healthy. And then I get a little money and food for myself out of it.

“They have all these marketing incentives if you want to make a little more money,” she said. “And that’s what my background is. I used to be a marketing director and that’s what my college degree was in.”

Jill Backstrom, 39, of Wake Forest, also is a coordinator and mother of three children. It takes her between 90 minutes and 2 hours to deliver an average of 45 boxes a week.

“I love the fresh produce,” she said. “I love delivering the fresh produce. I love spreading healthy eating to neighbors. I like the exercise as well. And I like meeting my members and talking to them.”

“I like to keep busy,” she added. “I’m a stay-at-home mom who’s never actually at home.”

She also appreciates that her delivery schedule is flexible enough that she can take a break in the middle, if necessary, to attend a school function involving one of her children.

Tellefsen credits O’Connell, a former executive chef and restaurant owner who initially joined the company to expand deliveries to the Wilmington area, with transforming the operation.

“He really made it more of a business,” she said. “He really put systems in place. He went out and talked to farmers and cultivated all of those relationships.”

Self-funded

Those systems include regularly surveying members about their experience and making changes based on their needs and wants.

It was at members’ behest, for example, that Produce Box began allowing them to opt to swap one item in each box for something else that they’d rather have. (Members also can build their own box from scratch, but only about 15 percent do.)

The Produce Box has grown to a statewide business without accepting a dime from outside investors. All the money plowed into the company has come from profits.

“I’m proud that we’re self-funded, that we’ve been prudent with our expenses and investments,” Tellefsen said. “I thought it was important to grow organically … to grow carefully and thoughtfully.”

Besides, she added, in the early days “I don’t know if I would have felt good taking somebody’s money back then because I didn’t know what I was doing. I had to sort of figure it out.”

Now that she has, she’s getting calls from people in other states who want to learn how they can set up similar businesses.

Tellefsen is interested in working with them and is looking at several options – including consulting, selling the proprietary software that Produce Box developed or even franchising.

But she hasn’t figured it out just yet.

David Ranii: 919-829-4877, @dranii

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