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It is difficult to recall a time when ordering anything our hearts desired online was a challenge. We have become blissfully accustomed to seeing packages on our doorsteps after a few quick clicks and since the COVID-19 pandemic, that trend has followed in force with food delivery. Over 3 billion consumers leveraged online food delivery services in 2023 alone as the market exploded to over $1 trillion of revenue globally. Technology has completely transformed this aspect of our daily lives, and ordering meals digitally has never been more convenient (and delightful).
At ICONIQ Growth, we have long followed the digital transformation of the foodservice ecosystem. While consumers and restaurants have benefitted significantly, critical stakeholders upstream in the food supply chain have largely been overlooked. Today, there are over 25,000 regional and independent food distributors in the US that process $200 billion in order volume annually, primarily cumbersomely over the phone. We believe there exists a massive opportunity to disrupt this category and streamline a crucial component of our economy. Enter Pepper – a full-suite, comprehensive, and modern platform that we believe is incredibly well-positioned to do just that.
After our initial meeting with Pepper’s co-founders Bowie Cheung, Chetan Narain, and Ivana Tesanovic, we were impressed by their passion and intimate familiarity with the day-to-day challenges that food distributors face. We noticed a rare and refreshing sense of purpose that motivated them to strive to elevate and future-proof the role of independent food distributors. Having spearheaded several product initiatives in the early days of Uber Eats, Bowie and Chetan learned firsthand how quickly restaurants were adopting technology and, somewhat paradoxically, how significantly distributors remained underserved by existing companies. We believe the team’s unwavering commitment to delighting customers and determination to painstakingly build out the most robust platform gives Pepper the opportunity to finally empower foodservice distributors and equip them with purpose-built software.
We believe Pepper has developed a compelling and differentiated product suite centered around its core eCommerce solution. Historically, food distributors tasked their sales teams with manually taking orders over the phone, multiple times a week, from each of their customers. With Pepper, distributors can launch a customized application for restaurants and grocers to place their orders digitally, securely, and confidently, unlocking valuable time for distributor sales teams to refocus on winning new business. Over the last year, Pepper has painstakingly listened to customer desires and launched several additional solutions, including utilizing generative AI to create order guides for new prospects and draft orders from voicemails and text messages, DSR CRMs and Co-Pilot tools to identify prospects and improve conversion rates, The team also offers insights for manufacturers to launch smart campaigns and a full-stack payments product. We’re confident these tools will empower distributor sales representatives to build closer customer relationships and drive sales conversion with unique buyer insights, bring antiquated foodservice payments online, and enable customers to make data-driven decisions.
We consistently hear from distributors that Pepper’s platform has not only become mission critical to their day-to-day operations but is also driving real revenue and profit gains from the outset. Customers love that the company offers a white-label, distributor-friendly solution that allows them to develop individualized relationships with their buyers through a customized app experience. We believe this approach completely disrupts the incumbent restaurant-oriented marketplace model that pushed distributors to compete against each other, leading to unfulfilled, broken orders, brittle integrations with ERPs, and razor-thin margins. What we believe puts Pepper at a competitive advantage is the ability to integrate deeply with a distributor’s existing technology stack. Customers have tremendously complex catalogs of hundreds to thousands of items, so ensuring that the eCommerce app presents accurate inventory in real-time is critical. Pepper offers over 200 pre-built integration modules for more than 40 of the most common ERP systems in the foodservice market. Distributors repeatedly praise Pepper’s implementation speed and reliable order fulfillments, driven by these robust integrations. It consequently did not come as a surprise when we learned that Pepper has retained 100% of its live customers [1] since its inception. We believe that this underscores how quickly Pepper delivers value and the team’s intimate understanding of how best to serve this market and become the most trusted technology partner for independent distributors and their key stakeholders.
We are overjoyed and grateful to support Bowie, Chetan, Ivana, and the entire Pepper team on its mission to modernize this previously overlooked and underserved market. Food distributors play a pivotal role in our economy, and we are looking forward to supporting Pepper as they spearhead digital transformation in this market and continue to cement their strong and clear leadership position.
Published:
May 13, 2024
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