Responding to Coronavirus, Oh My Green Pivots to Home Delivery

What do you do when your revenue practically disappears overnight? For healthy office snacks and meals startup Oh My Green, the shuttering of offices across the US at first left the company with a highly uncertain future. Now, the company is pivoting, launching a direct-to-home snack box model that the company hopes will help it survive and hire back many of the employees it had previously laid off.

This week the company debuted its snack-from-home service, offering home-bound workers enough snacks for a few weeks at a time.

Before the COVID-19 pandemic forced the closure of most offices nationwide, Oh My Green was in two businesses, the management of office micro-kitchens and healthy, family-style catering for offices. Its revenue had doubled in 2018 and 2019 and CEO Michael Heinrich said he’d expected 2020 to proceed on the same upward trajectory. that had led to doubling of sales revenue in 2018 and 2019. The company is backed by a $20 million investment that it raised in 2018 from firms including PowerPlant Ventures, Initialized Capital, Backed VC, ZhenFund, Talis Capital and the Stanford StartX Fund. In January, it also acquired Byte Foods, the food distribution and logistics division of Byte Technology, which offers offices a fresh-focused vending-style solution.

When Coronavirus hit, these revenue streams disappeared almost overnight.

“Although we were on this growth trajectory and we were on track for our best quarter, a lot of the companies shifted their employees from working from home,” Heinrich said. “Close to 90% of clients had to close their sites.”

As a result, the company laid off roughly 70% of its 600 employees at the end of March, furloughed others and cut executive pay as it tried to reduce overhead. 30% of the remaining employees also elected to take a reduced salary in exchange for more stock options.

However, clients still expressed a desire to feed their employees, even if they were working at home. Oh My Green believes there’s potential for revenue in that new environment.

“We wanted to support employees no matter where they are. We heard that people are returning to comfort food and the [food] they have at the office is not necessarily what they had at home,” Heinrich said.

While some snacks are purchased directly from brands, others are bulk purchases and the brands may not be aware they are being included. Currently, Oh My Green does not plan to sell box placement as a marketing tool to food brands. It offers three box sizes: large (65 snacks plus coffee and tea), medium (30-35 snacks) or small (20-25 snacks). Each box is expected to be the equivalent of six, four or two weeks of snacks, respectively.

With the backend and logistics side built in approximately two weeks, the service has already gained enough customers that Oh My Green has begun hiring back some staff. Heinrich hopes that as more customers come back, he’ll be able to accelerate that process. He shared that 50% of the company’s clients have said they hope to begin offering employees the option to come back into their offices this summer. As a result, Oh My Green has already begun restructuring its micro kitchens to avoid staff congestion and switching out bulk offerings for more single-serve products.

Meanwhile, the Coronavirus has impacted the business in other ways as well. The company planned to launch a new name and branding, efforts currently put on pause. Oh My Green also was in the process of closing a larger round of funding, but that has been delayed by term sheet revisions, Heinrich said. He now expects the round to hopefully close at the end of May. Still he remains optimistic about the future — no matter how changed it may eventually be.

“We’ve seen customer priorities move away from ease of business and vibrance of choice and sustainability to one of ‘how do I make sure that my employees feel safe?’” Heinrich said. “If there’s one thing that I know, it’s that coming out of this, health and wellness will be more important than ever.”