Dive Brief:

• Thrive Market, a leading online natural and organic grocer that has more than 400,000 paid members, announced it began offering meat and seafood selections Tuesday. Offerings include ground pork, steaks, wild-caught salmon and organic chicken, and will be available in sampler boxes that range from $90 to $120. All selections will appear under the Thrive Market private label brand, and are available to shoppers in all 50 states.
• In an interview with Food Dive, Thrive founder and chief strategy officer Gunnar Lovelace said the company spent more than a year developing a sourcing network — including a cattle farm in Patagonia — that adheres to the company’s standards for humane animal treatment and sustainable production methods. To support distribution, Thrive built three new warehouses — in Ferndale, Washington.; Richmond, Virginia.; and Hastings, Nebraska.
• Customers can expect to receive their orders two to three days after placing them. Orders come frozen inside boxes containing biodegradable packing materials, Lovelace said.

Dive Insight:

Thrive Market’s move into meat, poultry and seafood marks a notable expansion for a fast-growing online grocer, and underscores consumers’ willingness to buy fresh cuts online that were once limited to the meat counter.

Although Thrive’s slice of the grocery market is still very small, it’s growing rapidly thanks to its low prices, high standards and an aggressive marketing campaign. Often referred to as “Whole Foods meets Costco,” the company charges a $60 annual membership fee that translates into savings on well-known as well as niche natural and organic brands. In an interview with Food Dive, founder and chief strategy officer Gunnar Lovelace wouldn’t divulge the company's membership numbers, but confirmed that it is more than 400,000.

Interestingly, Lovelace said Thrive’s sales have skyrocketed since Amazon bought Whole Foods last summer for $13.7 billion. In January and February, the company had to pull back on its marketing programs because it couldn't handle the consumer demand.  

Many wellness-minded consumers, Lovelace said, doubt the specialty grocer’s standards and local product selection will survive under Amazon's ownership. Meanwhile, small suppliers — which are finding it harder to stay on Whole Foods’ shelves thanks to new merchandising fees and centralized buying practices — have flocked to Thrive Market in recent months.

“As Amazon brings Whole Foods into their fold and makes it a more centralized, efficiency-minded organization, it exposes the flanks of this historical position that Whole Foods had of being a trusted, authentic innovator in the market, and we now get to carry that mantle," Lovelace said.

Many of Thrive Market's members follow high-protein diets like the paleo diet, making meat and seafood a natural extension for the company. And many of these shoppers won't bat an eye at buying meat online. According to the Food Marketing Institute's recent “Power of Meat” survey, 19% of shoppers reported buying meat online at least once last year — up from just 4% who said the same in 2015. Additionally, Nielsen research from last year found that meat sales growth through alternative channels like discounters and online companies was outpacing grocers’.

E-butchers like Porter Road, Crowd Cow and Greensbury Market are capitalizing on this growing demand, and Thrive Market seems to be targeting these “sampler box” services with its own offerings. As Lovelace tells it, consumers aren't wedded to the supermarket meat counter any longer — and they aren’t satisfied with store's high prices and lack of transparency.

Thrive’s meat and seafood selection won’t appeal to everyone. Shipments take two to three days to reach consumers — a far cry from the one to two hours that it takes through Instacart or Amazon Prime Now. Thrive also has to convince shoppers to buy in bulk, and that getting their ground pork and ribeye steaks frozen is the way to go. Lovelace noted that freezing meat after processing actually preserves its nutrient content. He said Thrive plans to convey this message in its marketing materials.

But Thrive Market members, Lovelace pointed out, are the type who are willing to stock up and buy frozen in exchange for the value they’ll be getting. The company’s success to date is proof that, in the age of Amazon, there’s plenty of room for niche players to thrive.

"We only need 1% of the grocery market and we're a $10 billion business," he said. "We're going to be bigger than that, but we have significant tailwinds at our back."

An earlier version of this story noted that Gunnar Lovelace is CEO of Thrive Market. He is the chief strategy officer.