Thrive Market is over 5 years old now. The forward-thinking grocer wanted to get healthier options to more Americans at affordable price points, while staying competitive with brick-and-mortar grocery stores. In 2020, as those stores had to deal with the new realities of shopping in person, Thrive Market was already poised for online shopping. It saw demand skyrocket. So much so, that the company has since hired 500 more staff to deal with the growing desire to shop for groceries online.
Thrive Market wants to take those profits — and momentum— to make itself the first “climate-positive grocer” says CEO Nick Green. Acknowledging that shipping cartons around the country has its environment footprint, the LA-based company is diving into how it can reduce plastic packaging and reduce overall waste.
Green and his colleagues Jeremiah McElwee, Chief Merchandising Officer, and Karen Cate, Chief Financial Officer and Head of Operations, explain how they’ll achieve this vision.
Chhabra: “Building the world’s first climate-positive grocer.” What does that mean? What specific steps are pushing Thrive Market in that direction? Largely carbon offsets or something else?
Green: In plain English, we are committing to not only minimize our negative environmental impact, but have a net positive effect on the climate specifically. The big message that we’re trying to send, which we hope other companies will embrace as well, is that doing less harm isn’t enough. We should all be thinking about what we can do to actually make things better – to help heal the planet after a century in which we’ve done more harm than all prior centuries combined. Specifically, at Thrive Market that means committing to going Carbon negative as a company by 2025 (right now we are carbon neutral), making our zero waste practices official with a TRUE Zero Waste certification in 2022, and going fully Plastic neutral as well by 2023.
We’re already proud to be the largest grocer ever to receive B Corp certification and looking forward to recertifying in Oct 2023 with even stronger commitments to both social impact, environmental stewardship and investment in our people
Chhabra: Was 2020 a pivotal year in Thrive Market’s history? Any learnings?
Green: More than anything else, 2020 was a year for our mission. With lockdowns and quarantines, millions of Americans needed healthy essentials – and couldn’t go to the grocery store to get them. For us, the biggest learning was how much can be achieved by staying focused on a mission. Early in the pandemic, it didn’t seem like we’d be able to scale to meet the demand, but our teams persevered, and 500+ hires later, we had doubled our fulfillment capacity and shipped tens of millions of healthy products to hundreds of thousands of families across the country when they needed us most.
Chhabra: Is Thrive Market finding more and more of an audience in the Midwest and southern states? This was important to the founders early on in the conception of the business.
Green: We’ve actually found since the beginning of the company that conscious consumption is more a psychographic than demographic phenomenon. And yes, more and more, we’re seeing that it transcends all typical distinctions – geography, socioeconomics, race, etc. Today, 50% of our members are in the Midwest and Southeast and average household income is about $85,000. This is true to our mission and also speaks to the scale of our opportunity – this isn’t just a lifestyle for coastal elites.
Chhabra: One of the biggest challenges for you is packaging. Any progress on that?
McElwee: Biggest inherent challenge is balancing out high quality, value & values driven products being packaged in truly environmentally responsible formats. At present, those options can still cost 5-10X what the more conventional options cost. So you can have a product that retails for $1.99 and the package itself costs $1. That means the customer would have to pay that premium when just affording healthy, organic food can be a challenge for many on a limited budget. Yes to progress. Always. Our approach is to create step functions so that we start with reduction always then we move toward innovation and, ultimately, end of life solutions. Right now we have multiple pilots exploring both compostability and upcycling solutions for our shipping materials and product packaging!
Chhabra: Let’s talk about Thrive Market’s commitment to plastic neutral packaging by 2023 and how that’s going to happen.
McElwee: That will require measuring all plastics sent to our members, starting with our exclusive Thrive Market Goods products. Next comes offsetting those items through partnerships with organizations like Plastic Bank, which sets up “recycling ecosystems” in countries that lack sufficient infrastructure and employs local citizens to collect and divert ocean-bound plastic waste, and rePurpose, which helps individuals and businesses calculate and offset their plastic usage.
A certain amount of plastic packaging is inevitable in our business, so we always seek the most responsible option. Our first choice is compostable or biodegradable packaging; currently, our team is in final stages re-designing our 100% recycled Thrive Market box, alongside testing compostable leak protection bags and working on sourcing biodegradable pouches for our nut butters, and late last year, we launched our first compostable product (single-serve coffee in tea-like bags). The second-best option is packaging made of recycled content and recyclable materials; our exclusive Thrive Market collection features over 400 products that fit that bill. From there, we’re focused on landfill reduction.
Of course, recyclable packaging is only good if you actually recycle it—and unfortunately, that can be complicated. To remove some of the guesswork for our members, we recently started using How2Recycle’s standardized labeling system on our packaging, to provide clear, simple recycling instructions for different materials.
Because we know not all recycling programs are created equal, we’re also pioneering a program with WasteZero that will make it easier for our members to responsibly dispose of hard-to-recycle plastic waste, keeping it out of landfills and oceans.
Through the program (which is currently being tested by a small segment of our members), participants gather their recyclables, place them in a box, add a prepaid shipping label, and send the box to WasteZero, which will sort the items and work with their own recycling partners to repurpose the materials. While WasteZero has been working with cities and towns across the country on recycling and waste reduction programs, their partnership with Thrive Market is the first of its kind. If it’s successful, the next step will be to offer it to more members.
Chhabra: I know you have a goal to be zero-waste on the production side, how is that going?
Cate: Since 2015, we’ve had zero-waste practices in place at all of our facilities. In practice, that means recycling, composting, or reusing 90% of all materials. At our fulfillment centers, compactors compress cardboard and plastic into bales that can be diverted to recycling facilities. Broken shipping pallets are repurposed as firewood. Prior to the COVID-19 pandemic, when our Los Angeles headquarters was at full capacity each day, we collected food scraps in the kitchen for compost.
As part of our second commitment to becoming climate positive, we intend to make these mindful practices official in 2022 with Zero Waste Certification.
Chhabra: How else can Thrive Market “do good for the planet” aside from improving its packaging and shipping materials?
Green: One thing we’re incredibly passionate about at Thrive Market and don’t think gets enough coverage is regenerative agriculture. Back to the “climate positive” point, too many businesses and governments and even consumers are still thinking about how to reduce harm vs. do good for the planet. Regenerative farming is showing that it’s possible to create food and other raw ingredients while actually sequestering carbon, regenerating top soil, and ultimately reversing some of the damage done over the years by industrial monoculture. This is a huge deal and we think it will play a big part in the fight against climate change – yet many people still don’t know what it is. I’d love to see that change and we’re trying to do our part by rolling out hundreds of regenerative products per year and educating our members on how regenerative farming works and why it matters.