#13 – Food Delivery Business Connecting Families

“Food Rite will still be a relatively cheap option for Africans in the Diaspora due to the dollar conversion rate. Spending $150 a month (~53,000 naira) on Food Rite is a lot of food for your parents in Nigeria”

Problem
Many Nigerians living in the diaspora have families back home who might not have the funds to consistently buy high quality food and groceries. Many in the diaspora provide family members with stipend for daily living, however, in many cases, the funds are not used properly. Sometimes, the money is shared with other friends and folks in the neighborhood, thereby leaving the immediate family member with limited funds for food.

Solution
Start a company (Food Rite), where Africans in the diaspora can visit their website in the US, purchase groceries online and the food products are delivered directly to family members in Nigeria.

How it works

• A customer in the diaspora selects the grocery items (like an Amazon shopping cart), pays for the products and the items are delivered to family members in Nigeria. This can be a one-time event or a subscription based, re-occurring activity e.g. Once a month, these 20 items are procured automatically and delivered to your family members in Nigeria and your U.S. bank account is debited upon purchase.
• Your family member in Nigeria receives an alert when the items are procured and then Food Rite contacts the family member to schedule a delivery date and time
• Family members in Nigeria can also log into Food Rite’s website to select the items to purchase and customer in the diaspora can make a payment once the family member selects the purchasing items
• Food Rite can start by using the Instacart model of buying groceries from local stores/market and then delivering the groceries. I do believe that long term once volume picks up, it makes more sense to have a warehouse to buy products at a large quantity at whole sale prices and then deliver groceries upon demand to help reduce cost.

Benefits of the service

• Customers in the diaspora can ascertain that funds allocated to their family members in Nigeria are used as intended
• Save money on transaction and western union fees when sending money to family back home
• Customer in the diaspora can influence family members to eat healthier options by selecting food items to purchase
• Older family members in Nigeria do not need to worry about going to the hectic market locally because groceries are delivered to their door step regularly

Revenue Model
Food Rite can make money through the following avenues:

1. Markup prices on each grocery item (e.g. charge a 15% premium)
2. Charge a delivery fee for products that are ordered on the website
3. Charge an annual membership fee (like a Costco membership) for customers in the diaspora to use Food Rite’s services
4. Charge local retail stores in Nigeria a premium for listing their products on the Food Rite website

At the end of the day, Food Rite will still be a relatively cheap option for those in the Diaspora due to the favorable dollar conversion rate. Spending $150 a month (~53,000 naira) on Food Rite is a lot of food for your parents in Nigeria. See Nigeria’s Cost of Living report

Strategy

• Target Market: Africans in the Diaspora (ages 35-50, because their parents in Nigeria will most likely be at the retirement age)
• Value proposition: Convenience, Service and Quality

Growth opportunity
Other ways to grow Food Rite in a few years include the following:

• Target wealthier Nigerians in Nigeria to use Food Rite to deliver groceries to their family members locally
• Expand the company into other non-food services e.g. cleaning services, low-tech health care services, appliance/electronics purchasing etc.

The startup cost for Food Rite, should be relatively low, the main effort will be developing relationships with retail partners and delivery drivers in Nigeria.

Let us know what you think about this business opportunity, is this a service you will consider using if it were available? Also let us know if there is anything you will do to better improve the operations.

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