Munchery’s Struggles Show How Hard the Food Delivery Business Is

Munchery, a San Francisco startup that cooks and delivers meals to hundreds of thousands of customers in a handful of U.S. cities, has begged its cooks to bring down the cost of the ingredients, according to current and former employees. That often meant no organic chicken. No wild salmon. Nathaniel Faggioli, the company's chief operating officer who’s a former Goldman Sachs banker, has pushed his employees to find ways to improve its margins as the startup tries to attract another round of financing, according to the people.

Meanwhile, Munchery's line cooks in San Francisco, its flagship market, stayed up until 2 a.m. assembling Vietnamese caramel chicken, roasted half game hen and beef pho, said the current and former employees. Yet some of that food consistently gets thrown in the trash or donated, they said. Munchery spokeswoman Marcy Simon denied that cooks stayed that late and also denied that any prepared food gets thrown away. She acknowledged Munchery made more food than they sold.