Without warning, El Segundo-based Chef’d suddenly closed its doors and laid off more than 350 workers.
The company founded by financier Kyle Ransford was just another meal-in-a-box with the twist of using highly-publicized celebrity chefs to create recipes and meal plans – and did not require a subscription to lock-in users or produce known revenue streams.
Even with the prospect of partnering with iconic name-brand partners, being available in mainstream outlets, few people looked to the company to provide daily sustenance, but more of a novelty experience. Yes, there is a time-savings in using a meal kit – but a $15 grilled cheese sandwich for two is beyond the pale, no matter how premium the cheese or how exotic the condiments. But, there are others who sniff at the idea of preparing a meal-out-of-a-box with pre-measured ingredients and fail-safe recipes is actually cooking.
Chef’d employees received an email noting their change of status …
“We have had some unexpected circumstances with the funding for the business. Due to setbacks with financing, unfortunately, we are ceasing operations for all employees, effective today, July 16, 2018. If we had been successful with these funding efforts, this difficult decision would have been avoided.
Everyone will receive wages through his/her last day of work, as well as any accrued vacation (as applicable). Eligible employees will have benefits through July 31, 2018.
I want to personally thank each of you. It was an amazing run and while we didn't get to where we wanted to go, I hope you each take something away from this experience that will help you in the future. I will miss you and I will miss Chef'd.
Best of luck and please be in touch,
Kyle”
There is little in Ransford’s background that suggests that he was the man to built-out the company. His position of founder of General Manager of Cardinal Investments touts a background in finance and projects to invest and develop residential, commercial and resort real estate projects.”
There is little doubt that most meal services are fads or specialty items aimed at the affluent, busy worker or the consumer with special dietary needs. But, considering the business model as a whole, it is unsustainable and unprotectable. If a major player, like Amazon/Whole Foods, wanted to engage the market, using their existing order/payment platform, logistics, and retail outlets, small companies like Chef’d would stand little chance of competing and being profitable.
Are you wondering Am I Next?