Good Eggs Expands to L.A., Plans to Grow Both In and Out of California

After a limited test, meal kit and grocery delivery service Good Eggs officially launched in Los Angeles last week. The move comes as the San Francisco-based retailer explores long term plans to expand beyond California.

“The L.A. launch is a huge next step on our path to thoughtfully expand throughout California and then across the most valuable West Coast regions,” CEO Bentley Hall said. “Unlike other companies who are trying to be everything to everybody, everywhere, we will stay focused on bringing the highest quality food, sourced with integrity, and delivering convenience without compromise to customers who care.”

Good Eggs returned to L.A. seven years after the brand left that market, along with New Orleans and New York, to focus solely on the Bay Area. At the time Hall joined the company, in late 2015, it had only 90 days of cash on hand due to further venture capital falling through. Last year, however, the company raised $100 million to help finance the expansion to L.A., including building a new 60,000-square-foot production and distribution facility in Vernon, Calif.

The L.A. test began earlier this year in Venice, Brentwood, West Hollywood and Santa Monica. Last week, Good Eggs expanded delivery to include Pacific Palisades, Beverly Hills, Hollywood, Koreatown, Downtown, Silver Lake, Culver City, Pasadena and Manhattan Beach. Next up will be Malibu, the West Valley and Orange County, Hall said.

To offer more rapid delivery in the future, the company has also opened a nano fulfillment center in Santa Monica, with more locations to come.

Unlike a traditional retailer, Good Eggs stocks a curated assortment of roughly 10,000 SKUs, 70% of which are from local providers. Working directly with farmers rather than going through distributors, the company claims its produce reaches consumers within two to three days of being harvested. Commissary-prepared meal kits and prepared meals also account for 15% of Good Eggs’ revenue.

The company doesn’t plan to open new fulfillment and distribution centers beyond California this year, Hall said, noting that California alone is a $1 billion opportunity. Still, Hall didn’t provide details on where the company was planning to expand or if that would be under its current delivery model or via e-commerce shipping.

“Chapter one, which was a five-year chapter, was really about building a foundation in the Bay Area and one that was scalable, that meets customer needs and is a good business,” Hall said. “Now we feel so strongly about [the business] that we can lean into expansion and it’s actually relatively low risk and high return because we figured out those things.”

The company has been hiring for growth, if nothing else. Good Eggs last year brought on Vineet Mehra, the former CMO of Walgreens Boots Alliance, a big step from the focus on assortment, operations, and technology that were required to establish a solid platform and product mix. Good Eggs now can turn its attention to growth and marketing, Hall said.

“Each of [our] teams has both logic and creativity within their function. And each of those has some ‘let’s not forget what’s worked really well in the past but let’s also embrace what is more cutting edge and innovative,’” Hall said. “Now we’re going to go to more markets, we’re going to get a little louder, we don’t just want organic word of mouth to be driving our business, so we’re going to amplify [our message] a bit.”