Munchery is moving into a Costco-like membership program for meal delivery. Starting today, all new diners can sign up for the $8.95 per month plan that provides discounts of up to 20 percent on premium meals and service. The company is rolling this out to all four markets it operates in.
Tri Tran, Munchery’s CEO, told VentureBeat that this new program is based on the belief that if customers make a small commitment to the company, it can offer them increased value and quality that’s delivered right to their door. This membership program was tested in suburban neighborhoods of Los Angeles and the San Francisco Bay Area over the past five months, and the data and feedback gathered have been applied to the new program.
If you’re an existing Munchery customer, you will be able to remain on your current plan, but you’ll also have the option to switch to this subscription model. However, anyone who is just enrolling now will have no choice but to sign up to either the $8.95 per month plan or the $85 per year option. Tran said that the first 30 days are free and that you can cancel your membership at any time — there are no contracts.
Currently membership only provides you with discounts on meals, which can vary, but which will be between 15 to 20 percent, depending on the entree. As an example, Tran said that with membership, Munchery’s chicken pesto pasta will cost $7.95, compared to $9.95 without membership. With delivery, the dinner for two amounts to $18.85, versus approximately $35 to $42 for the same meal at a dine-in or takeout restaurant. And while the program is limited to cheaper food, he said other benefits are being planned, though he declined to provide specifics.
Tran didn’t share Munchery’s user numbers, but at the beginning of this year, the total population of its serviced area was around 8 million people. By June, it’ll expand delivery coverage across all four of its markets to increase that number to 23 million people. The company is looking to add additional cities to its service area, but once again, Tran opted not to share details.
Although this membership program could be appealing to those who depend on Munchery for their daily dinners, it could also be viewed as a strategic effort to remain relevant in the on-demand food marketplace. Earlier this year, SpoonRocket shut down after being unable to raise more capital, Ola closed down its grocery and food delivery service after just seven months, Instacart had to slash earnings for its driver workforce to cut down on costs, and Uber ceased instant delivery for its UberEats program in New York City.
Amid all of this, Tran said that business is “doing really well” and that Munchery wouldn’t have pursued this membership strategy unless it was a sound opportunity.
Regardless of whether you’re a new or existing customer, the overall experience within the food delivery app will remain the same. The only difference is the price.