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Why Goldbely Thinks People Will Pay $300 for Barbecue

Inside the “tech company” helping restaurants deliver meals across the country (for a price)

Photoillustration: Esra Erol

Louie Mueller Barbecue has been a fixture in Taylor, Texas (about 30 miles from Austin), for 68 years. Prior to 2017, barbecue lovers who couldn’t make it to the restaurant would have to call and place orders for Mueller’s ribs, pulled pork, and sausage to be shipped to them. Now, thanks to Goldbely, a specialty-food delivery company, brisket fans living in Brooklyn or even Alaska can go online and order boxes of Texas-style barbecue to be delivered to their door, too.

Goldbely does everything but pack shipments for restaurants that use its services. For merchants like Wayne Mueller, third-generation owner and pitmaster of Louie, this has made processing orders more efficient. “We don’t have to take phone calls,” Mueller says. “It’s streamlined our operation and made it much easier to manage.”

Goldbely is fairly unique, as far as online food services go — even as the on-demand food market balloons with endless sites and apps. Instead of delivering nearby meals (like Grubhub or DoorDash), the company mostly connects with small but popular restaurants to help them sell their products to anyone in the country. That, in turn, gives people the chance to try regional food from miles away, without leaving their homes (much like a discovery app, which connects its users with items they may have never heard about before based on their tastes).

And it wants to be seen as a game-changing tech company. Since its origins in the Silicon Valley startup scene, Goldbely has positioned itself as such. Joe Ariel, a bit of a serial entrepreneur who was previously the CEO of Eats.com and Delivery.com, created Goldbely in 2013. After being backed by Y-Combinator (the tech incubator where Instacart and DoorDash were born), Goldbely raised $3 million in seed funds and opened shop in San Francisco; earlier this year, it raised an additional $10 million. Ariel describes Goldbely as in the same vein as Uber, Airbnb, and OpenTable — a technology-enabled platform that empowers the little guys. He’s even called it the “Etsy for food.”

But unlike Etsy, Airbnb, and Uber, Goldbely isn’t turning everyday consumers into business people. Instead, the focus is working with producers already in the industry, and giving them a better shot at reaching a national base. Restaurants that sell items on Goldbely tend to be small and local favorites; some dishes have reached iconic status: deep-dish pizza from Lou Malnati’s in Chicago and the original Boston cream pie from the Omni Parker House Hotel, for instance, are featured.

“The reality of what we do is we empower mom-and-pop food makers,” Ariel says. “The challenge that they have is managing technology, managing logistics, managing online marketing — all of these are areas, if you are a small-scale food maker, that you don’t know anything about.”

The company worked with Joe’s Pizza in Brooklyn, for instance, for about a year until the famous pizza parlor was ready to package and sell. Shipping Joe’s pizzas nationwide required a change in their size, cook time, and process in order to ensure the best par-baked product. Doughnut Plant in New York City, meanwhile, tested various shipping packages to deliver its doughnuts before deciding it couldn’t ship its yeast varieties. Its cake doughnuts need to be shipped in special boxes that hold the pastries in place during transit, says Jeff Magness, Doughnut Plant’s chief creative officer, in an email.

In addition to working with companies on quality assurance, Goldbely takes care of marketing, online processing, and customer service — vendors can also use its online dashboard to track their orders and print labels. Goldbely staff also monitor the packages on their end, watching weather reports and tracking information to make sure the goods arrive on time.

That is the biggest benefit for Mueller, who wanted to digitize the restaurant’s shipping process and beef up the restaurant’s e-commerce game. At Mueller’s, the weekly average base number of units that have been sent out to customers has increased 30 to 40 percent since the restaurant began using Goldbely seven months ago. Since signing on, the restaurant no longer offers sales by phone. “The value is there, otherwise I wouldn’t do it,” Mueller says. “This generation has accepted food delivery in a way that the previous generation did not.”

Younger people in particular have more interest in specialty food. According to Ron Tanner, the vice president of philanthropy, government, and industry relations at the Specialty Foods Association, 60 percent of people report purchasing specialty food — but that number jumps to 78 percent among millennials. “Millennials are not very brand-conscious at all,” Tanner says, adding that many of today’s consumers seek new experiences. “They’re also getting the story behind the food, and in specialty food, the story can be as important as the food itself.”

Tanner also notes that while much of the food industry is growing at an annual rate of 2 percent, the specialty-food segment — currently valued at more than $127 billion — is growing at 16 percent each year. “It’s a really, really hot market.”

Goldbely/Facebook

But Goldbely faces competition. Mouth began as a startup called New York Mouth and has become a notable player in specialty-food e-commerce. West Coast-based FoodyDirect, which coincidentally launched just months before Goldbely, has an almost identical model and concept. This leaves two companies competing for the country’s so-called regional icons, small businesses that are unlikely to choose, or need, both. Mueller said he chose Goldbely over FoodyDirect simply because it seemed to have a stronger East Coast influence. That’s where he thinks most people will want to order his regional barbecue. For consumers, the competing businesses means lovers of some iconic items will have to choose the one that features the restaurants they want. This is what sets the two companies apart, says FoodyDirect founder and CEO, Brad Koenig.

“If you want to order babka from Breads Bakery (in New York), FoodyDirect is the only place online you can find it,” Koenig says.

But Goldbely’s team of about eight headhunters appear to attract clearer regional standouts and instantly recognizable brands, like Chicago-style Vienna hot dogs and Crack Pie from Brooklyn’s Milk Bar. And other competition is light. ArtisanalFoods.com sells “hard-to-find” ingredients made by “artisans dedicated to perfecting their craft.” Companies like Harry & David and iGourmet have been selling specialty food for years. Ariel says those examples are “old school,” without the digitized or streamlining help for their vendors.

Efficiency is also part of the allure. Many Goldbely items can be shipped overnight, depending on the users’ and restaurants’ preferences, which caters to a generation that demands immediacy. Some restaurants, like Lou Malnati’s, already offer ready-to-ship (or frozen) versions of their dishes and have adopted Goldbely as an additional sales channel.

The challenge for restaurants, though, is figuring out how to efficiently handle the increase in demand Goldbely brings. If Louie Mueller Barbecue has 100 boxes to ship, for instance, the on-site logistics become a major challenge, Mueller says. They have to vacuum-seal all the meat, store it in styrofoam boxes with frozen gel pads, then fill the box with paper.

Another catch is shipping costs. They’re part of the reason prices on the site are so high — a major criticism. Meals that feed 15 people cost as much as $400. Many of the items are around $60 to $130. A box of a half dozen doughnuts from Doughnut Plant goes for $65 (that’s $11 per doughnut). A sample set of Mueller’s ribs goes for $329, discounted from $529. It feeds 12 to 15 people, or $22 to $27 per person, versus about $15 to $18 per person if purchased at the restaurant. Goldbely says it works with merchants to determine a retail price, which in the end includes shipping, handling, and Goldbely’s undisclosed transaction fees added on.

Price is something that both sides have to wrestle with. Restaurants have to determine the most cost-efficient way to package and ship their food while maintaining the quality of the product — and maintaining a decent price point. It’s left some Doughnut Plant customers who have been asking the company to offer shipping frustrated, Magness says. It’s also been one of the major pain points for Mueller.

But for many consumers, the premium is not a problem; they are paying for “the best,” Tanner says. The items on Goldbely are supposed to be iconic and difficult, if not impossible, to obtain otherwise, and some consumers see value in that.

“Back in Pittsburgh, these sandwiches cost about $7 each,” wrote the Washington Post’s Maura Judkis in a 2014 review of Goldbely-shipped Primanti Bros pastrami sandwiches. But she notes: “More than just a sandwich, you're paying a premium for a taste of flown-in nostalgia here.” That same argument leads to additional complaints from others. In another review for Forbes, Tim Conneally argued that Goldbely’s service discourages people from traveling and discovering regional foods on their own. “The journey is the destination and all that,” he wrote

The higher price point also means few items are for one diner. A single sandwich from Primanti Bros probably wouldn’t be worth the transaction fees and shipping and handling costs. Instead, Primanti’s DIY sandwich kit on Goldbely comes with enough materials to build four sandwiches, and includes coleslaw and a bag of uncooked fries. Other kits come with aprons, jars of sauces, or other store memorabilia, like T-shirts. And some products include multiples of the same item. Unlike Grubhub-style local sites, this makes many of the things offered on Goldbely more conducive to gift-giving and social events than personal enjoyment — again, tapping into the Goldbely consumer’s desire for “experience.”

But Ariel has a vision that Goldbely will become more prevalent as a go-to source for small food businesses looking to step into e-commerce. He wants to scale, which could eventually lower prices and make the site more accessible to more consumers. The company currently accepts between 1 and 2 percent of merchant applicants; more than 300 merchants are currently featured on the site. Ariel wants Goldbely to include thousands of vendors. “‘Disruptive’ is a term that’s thrown around a lot,” he says. “To us, we want to change and redefine the landscape of the gourmet and specialty-food market online.”

Vince Dixon is Eater’s data visualization reporter.
Editor: Erin DeJesus