Abstract
In her quest to elevate Manzana Verde to the esteemed status of a Unicorn, Larissa Arias drew inspiration from triumphant Latin American precedents, notably Rappi, valued at a staggering 3.5 billion. With the unwavering support of a venture capital firm committed to both social impact and scalability, Larissa ardently pursued this ambitious goal.
The Teaching Note to this Case Study is available on request via e-mail to ifamr@ifama.org.
1. The firm
Manzana Verde, a collaborative platform, emerged as a culinary business delivering daily fresh, delectable, and nutritionally balanced meals to discerning consumers in far-flung locales such as Piura and Lima in Peru; Guadalajara, Mexico City, and Monterrey in Mexico; and soon to gastronomes in Colombia and Brazil.
At the helm of a multi-firm value co-creation system, Manzana Verde orchestrated a harmonious convergence of nutritionists, local chefs, restaurants, and couriers. A pivotal driving force behind this collaborative symphony lay in the ingenious utilization of spare production capacity from diverse collaborators, akin to the operational paradigms of industry giants Uber and Airbnb.
While Manzana Verde mirrored certain aspects of Uber’s model, particularly in managing the complexities of perishable goods, it had distinctive nuances inherent to the realm of fresh and perishable culinary offerings (Figure 1).
Comparison of Manzana Verde with Uber. Source: Manzana Verde.
Citation: International Food and Agribusiness Management Review 27, 2 (2024) ; 10.22434/ifamr2023.0028
Their trajectory was undeniably exponential, yet the imperative to hasten towards Unicorn status remained unabated.
Nestled in Piura, Peru, Manzana Verde unfurled its business by delivering affordably priced, nutritionally curated meals daily to the doorsteps of consumers, eschewing any additional delivery fees. Satiating the palates of thousands across Piura and Lima in Peru, Mexico City, Guadalajara, and Monterrey in Mexico, their culinary creations promised freshness, nutrition, and gastronomic delight — a gastronomic synthesis underpinned by a sophisticated proprietary business platform.
Larissa Arias, Chief Operating Officer and co-founder of Manzana Verde, envisioned a grand expanse from Piura to Lima, Mexico, and, ultimately, on the global stage, aspiring to inscribe their culinary legacy in the annals of Unicorn lore based on the increased health concern (Table 1).
Health-conscious consumers market
Citation: International Food and Agribusiness Management Review 27, 2 (2024) ; 10.22434/ifamr2023.0028
The operational epicentre of Manzana Verde manifested in a culinary coordination — ingredient acquisition, “uberization” of local kitchens from independently owned restaurants during the hours of 8 am to noon, strategically aligning with low-demand periods across diverse neighbourhoods. The baton of delivery seamlessly passed to local independent distribution companies, orchestrating operations within 2-kilometer mini-hubs catering to local markets. This culinary symphony was deftly directed from a platform based in Lima, Peru.
Embarking on the ambitious venture, in January 2021, Manzana Verde, fortified by a $1.5 million infusion from a visionary venture capital firm, made its grand entrance into the bustling culinary landscape of Mexico City. Aspirations soared to serve a staggering 18 000 clients daily, though by December 2021, the tally stood at a commendable 5000. Larissa, with discerning foresight, contemplated the strategic channels for future efforts and resource allocation.
1.1 Background
Before co-founding the culinary phenomenon, Larissa Arias charted a trajectory as an auditor in one of the illustrious “big four” firms. Initially on a trajectory to follow in her sister’s esteemed footsteps in a prominent Washington-based consulting firm, Larissa pivoted towards the commercial sector. Her foray into the online domain commenced with Zrii Amalaki, an enterprise specializing in a nutritional drink product for weight control.
Inspired by her experiences, Larissa envisioned unfettered entrepreneurial freedom. Choosing to embark on this transformative journey with a kindred spirit, she found alignment with Carlos Andrade, the present CEO of Manzana Verde. Their shared vision coalesced after Carlos encountered a company in Barcelona delivering vacuum-packed “home-cooked” food at a more economical price than local restaurants.
Together, Larissa and Carlos started Manzana Verde in Piura, Peru, a city of 300 000 inhabitants. Their culinary offerings, initially vacuum-packed and later transitioned to recyclable sugarcane bags, bore fruition from an initial investment of $17 500. In 2017, sales reached $11 500, yielding profits totalling $1560.
1.2 Evolution and financial support from the entrepreneurial ecosystem
Buoyed by local acclaim, Manzana Verde traversed the entrepreneurial landscape, securing initial investments from esteemed entities such as the Entrepreneurial HUB of the University of Piura, in collaboration with the Regional Government and the Telefónica Business Foundation.
Subsequently, the UTEC Ventures Accelerator, extending a financial lifeline of $15 000, catalysed the expansion into Lima, Peru, an urban tapestry teeming with 10 million inhabitants. After eight months, daily deliveries burgeoned to 80.
In the face of financial constraints, Andrade and Arias tactically pivoted towards developing their online platform. The labour-intensive facets of culinary preparation and delivery were artfully delegated to third-party entities across diverse neighbourhoods. This strategic manoeuvre shielded them from substantial capital outlays and extensive infrastructure investments.
Embarking on a trajectory marked by success, Manzana Verde garnered support from a consortium of investors led by MatterScale Ventures, contributing a formidable $1.5 million. MatterScale, in a gesture of strategic alignment, relinquished active participation in the company’s board of directors and pivotal decisions. True to its nomenclature, MatterScale Ventures champions socially conscious enterprises, epitomizing a shared belief in scalability.
Empowered by this infusion of capital, Manzana Verde expanded its culinary dominion into Mexico. Envisioning daily sales surpassing 18 000 lunches, an investment of $500 000 in advertising, primarily in social media, constituted a calculated financial strategy. This approach adhered to a doctrine grounded in zero fixed costs and the foresight of positive cash flow in advance.
Within the expansive culinary landscape, giants such as the Atkins diet, tested by millions worldwide, and the Keto program, boasting 300 000 users, held sway. Both diets mirrored each other in their emphasis on reduced consumption of high-carb, moderate-protein, and high-fat content foods. Distinctive to Manzana Verde, however, was its departure from the mere provision of suggestions and recipes; they embarked on the noble endeavour of delivering meticulously crafted, ready-to-eat meals to homes or offices daily. This culinary symphony catered to an array of palates, tailored to meet the individualized nutritional requirements of each gastronomic plan (Figure 2).
Samples of meals in different markets. Source: Manzana Verde.
Citation: International Food and Agribusiness Management Review 27, 2 (2024) ; 10.22434/ifamr2023.0028
1.3 Operations
The operational ethos of Manzana Verde constitutes a complex interplay of B2B and B2C dynamics, elegantly christened B2B2C. The firm orchestrates a daily coordination with producers, couriers, and customers, intricately managing the production and delivery of highly perishable goods. This intricate dance is seamlessly directed by an undisclosed central platform meticulously designed Manzana Verde executives themselves (Figures 3 and 4).
Operations flow description.
Citation: International Food and Agribusiness Management Review 27, 2 (2024) ; 10.22434/ifamr2023.0028
The cloud and mini hubs.
Citation: International Food and Agribusiness Management Review 27, 2 (2024) ; 10.22434/ifamr2023.0028
1.4 Product
Manzana Verde specializes in offering personalized meal plans meticulously prepared and delivered to consumers’ homes or offices on a daily basis. Tailored to cater to diverse health objectives such as weight loss, muscle mass building, or weight maintenance, these meals are not only palatable but also affordable. Crafted by a collaborative effort between nutritionists and renowned local chefs from leading restaurants, the dishes distinguish themselves by being both low in calories and high in flavour. An exemplar of this fusion is found in the popular items in Lima, such as the turkey demi-glace and chicken in passion fruit sauce.
Beyond the culinary and nutritional facets, Manzana Verde stands out for its commitment to delivering convenience, comfort, and valuable free time. Monthly subscribers curate their dietary journey from a menu featuring an expansive array of 200 dishes, from which 15 are selected for each week. Subscribers engage in an upfront payment for their monthly plans, ensuring a seamless and pre-planned gastronomic experience.
Under the visionary leadership of Carlos Andrade, an algorithmic was conceived to discern an optimal custom diet plan for individual consumers. This ingenious application correlates client data, including weight, height, and body mass, with the nutritional content of the food, offering a bespoke culinary journey. Another software solution efficiently manages the influx of orders from thousands of clients, seamlessly orchestrating deliveries through diverse restaurant hubs.
Each personalized meal plan is meticulously crafted by nutritionists to align with the precise proteins, fats, and carbohydrates required to meet the health objectives of the consumers. To augment the experience, clients are also provided with access to a digital coaching program.
From its inception, Manzana Verde has positioned itself not just as a virtual nutritionist but as a revolutionary entity that goes beyond conventional dietary advice. Unlike generic guidelines from traditional nutritionists, Manzana Verde prepares specific foods tailored to individual goals, presenting them in delectable dishes designed by esteemed restaurant chefs. Responding to the culinary landscape, menus in Mexico and Peru incorporate both local and international delicacies, a testament to the culinary diversity inherent in the program.
1.5 Sales
Customers engage with Manzana Verde through a user-friendly app, selecting from a prepaid monthly program priced at approximately $4 for lunch alone or around $7 for both lunch and dinner, inclusive of delivery. These prices mirror the cost of noon lunch menus in city business centres. The pricing structure, offers a compelling 70% invoice payment to restaurants, further incentivizing their involvement. In the strategic expansion into Mexico City, Guadalajara, and Monterrey, all operations remained centralized on a platform in Lima, Peru, with Andrade in Lima and the COO in Mexico City. Figure 5 shows the evolution of revenues, Table 2 the cost-revenue structure and Figure 6 impact of scale in the cost structure.
Evolution of revenues in US $ and entrepreneurial environment support. *COVID-19 pandemic starts. Source: Manzana Verde.
Citation: International Food and Agribusiness Management Review 27, 2 (2024) ; 10.22434/ifamr2023.0028
Estimated impact of scale on % contribution margin. Source: Manzana Verde.
Citation: International Food and Agribusiness Management Review 27, 2 (2024) ; 10.22434/ifamr2023.0028
Costs, prices and margins 2021 (in $)
Citation: International Food and Agribusiness Management Review 27, 2 (2024) ; 10.22434/ifamr2023.0028
1.6 Meal preparation
The culinary business is brought to life through collaborations with select restaurants, chosen as the best large and medium kitchens in each city. These establishments pay a fee for exclusive rights within their geographical radius and access to Manzana Verde’s culinary expertise. Restaurants receive a 70% remuneration based on the meal price, creating a symbiotic relationship. Each neighbourhood in every city features a designated kitchen acting as a mini-hub, streamlining logistics and ensuring the freshness of the culinary creations.
1.7 Delivery
Customers engage with the online platform to select meals for each weekday, choosing from a variety of offerings. Orders are consolidated and dispatched to each restaurant for preparation, with clients granted the flexibility to modify their daily order until 9 am. The culinary creations are packaged in disposable, recyclable containers made with sugarcane bagasse, allowing for quick consumption after heating in a microwave. Restaurants manage the logistics of ingredient sourcing, while distribution from kitchens to consumers is orchestrated in collaboration with local delivery companies. Manzana Verde plays a pivotal role in managing the sales channel, coordinating customer orders, overseeing delivery logistics, enhancing the consumer experience, monitoring nutrition, and conducting marketing, advertising efforts and CRM, all facilitated through its proprietary business platform developed by Carlos Andrade.
2. The Manzana Verde team
At the helm of Manzana Verde’s C-level leadership is Founder and CEO Carlos Andrade, Co-founder and CMO Larissa Arias, Operations overseer Andrea Rivera, with prior experience at Rappi, and Product Manager Emiliano Aristizabal. Operations are adeptly outsourced and digitized, leveraging a remote team of 100 professionals spread across Piura, Mexico, Argentina, Colombia, Bolivia, and Uruguay (Figure 7).
Organization. Source: Manzana Verde.
Citation: International Food and Agribusiness Management Review 27, 2 (2024) ; 10.22434/ifamr2023.0028
3. Current situation
Manzana Verde currently has 3000 clients in Peru and 5000 in Mexico, with an ambitious plan to reach 18 000 by 2024 through an assertive advertising campaign on paid social media services. Despite not yet achieving profitability, the company thrives on capital market support, akin to the trajectories of industry giants Rappi and Amazon. Figures 8 and 9 compare Manzana Verde with similar food businesses.
Manzana Verde vs Rappi, an international general food competitor. Source: Manzana Verde.
Citation: International Food and Agribusiness Management Review 27, 2 (2024) ; 10.22434/ifamr2023.0028
Comparison with somehow similar competitors offering lunches. Source: Manzana Verde.
Citation: International Food and Agribusiness Management Review 27, 2 (2024) ; 10.22434/ifamr2023.0028
4. Plans
The visionary next steps for Manzana Verde include a strategic foray into the Colombian market, followed by a robust expansion into Brazil fuelled by an A-series investment round. Rooted in an Other People’s Resources-Based Strategy, Manzana Verde accentuates sustainable growth through the creation and sharing of value with partners along the chain. Diverging from the models of Amazon or Uber, the company confronts the intricacies of logistics involved in producing and delivering fresh food directly to consumers’ homes through a network of additional firms. As Larissa sets her gaze on the future, her strategic focus pivots towards densely populated global cities, as illustrated in Figure 10.
World city populations.
Citation: International Food and Agribusiness Management Review 27, 2 (2024) ; 10.22434/ifamr2023.0028
5. Themes to analyse
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(1) The value proposition for kitchens, couriers, consumers, investors
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(2) The pandemic impact on health consciousness, home-based lifestyle, supply chain resilience.
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(3) Consumer´s meal cost assessment: ingredient sourcing, meal preparation, packaging, delivery logistics, technology, infrastructure, equipment, washing.
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(4) Scalability: geographic expansion sources, digital platform, outsourcing and digitization.
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(5) Strategic sustainability: other people’s resources-based strategy, diverse menu offerings, social media advertising.
Acknowledgement
This case reached second place in the Teaching Case Competition in the IFMA Agribusiness Word Congress 2022 Costa Rica.
Reference
Requena, M. and D. Guerrero. 2021. Manzana Verde: en busca de la expansión. Trabajo de investigación de Máster en Dirección de Empresas, Universidad de Piura. PAD-Escuela de Dirección. Programa Maestría en Dirección de Empresas MBA. Lima
Appendix A
Citation: International Food and Agribusiness Management Review 27, 2 (2024) ; 10.22434/ifamr2023.0028
Appendix B: Comparing models
Goldberg Agribusiness Model: System Level
Citation: International Food and Agribusiness Management Review 27, 2 (2024) ; 10.22434/ifamr2023.0028
Porter’s value chain (https://www.valuebasedmanagement.net/methods_porter_value_chain.htm) at firm level.
Citation: International Food and Agribusiness Management Review 27, 2 (2024) ; 10.22434/ifamr2023.0028
For the Manzana Verde model at platform level, Figures 3 and 4.
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