Dive Brief:

• Online vegan grocery store Mylk Guys, which recently raised $2.5 million in funding, is on a mission to become more than just a place to buy vegan food online, according to TechCrunch.
• CEO Gaurav Maken told TechCrunch he wants Mylk Guys to be a testing platform for new plant-based foods from startups and food companies as meat alternatives continue to rise in popularity.
• The company launched in 2018. It is still small, offering about 1,300 products, but about 40% of the online grocers’ customers are not vegan, according to Maken. With its newly raised capital, Mylk Guys plans to expand sales to the East Coast and open a new distribution center.

Dive Insight:

Approximately 34% of Americans indicated they wanted to try more plant-based foods in 2019, according to a poll from YouGov, while Nielsen found in 2018 that vegan and produce growth is outpacing total food and beverage. Despite the growth, sales of traditional plant-based foods like tofu and brown rice are dropping. Instead, consumers are turning more to innovative plant-based foods — a category that is seeing double-digit growth — including meat alternatives, plant-based yogurt and veggie noodles.  

That aligns well with Mylk Guys' goal to serve as a testing ground for new plant-based food concepts. With an explosion of new products on store shelves comprising a market worth $4.5 billion, lots of suppliers are entering the space, and Mylk Guys wants to be the first stop on their journey. The company is pitching suppliers on high-quality customer data that it will make available to them.

Increasingly, vegan food makers and retailers are trying to expand their appeal beyond consumers who only eat vegan diets. Beyond Meat, for example, is more focused on attracting meat-eating customers than vegan and vegetarian ones. Mylk Guys is also looking to draw a wide shopper base that may not be 100% vegan, but has an interest in exploring more plant-based food options. 

While plenty of online-only grocers have sprung up and become household names, few vegan, specialty or sustainably-focused e-grocers exist. TechCrunch noted the growth of Thrive Market as one of the only other online retailers to sell sustainable grocery products direct-to-consumer. While Thrive isn’t focused solely on vegan products, it does include vegan and vegetarian items in addition to foods for other special diets and a natural, organic assortment. 

Although Mylk Guys doesn’t have much direct competition at this point, there are still numerous challenges to becoming a profitable online-only grocer. It’s easier for shoppers to discover products from established retailers and purchase them elsewhere based on price or customer loyalty. Additionally, almost any online-only business is going to have to face Amazon and its lower prices, wider selection (which includes vegan, vegetarian and organic products) and faster delivery.