Thrive Market uses less selection, larger orders to fight grocery inflation

Thrive Market's mission said its "profits and the purpose go hand in hand." In 2022, Thrive Market brought in nearly $500 million in revenue.

Thrive Market provides ‘free memberships to low-income families, first responders, military veterans,’ CEO says

But as consumers are
pinched with inflation,

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Brooke DiPalma

·Reporter, Booking Producer

Sat, April 22, 2023, 4:17 AM GMT+9·3 min read

Thrive Market, an online, subscription-based marketplace for organic groceries, aims to offer healthy groceries for less. Nick Green, Thrive Market co-founder and CEO, told Yahoo Finance offering less selection on its website helps keep prices low.

"Instead of going into a grocery store and having 40,000 non-perishable SKUs [stock keeping units], we've got about 5,000 or 6,000, which gives us more purchasing power...despite the inflation, we've been able to be pretty resilient in keeping our prices low, certainly relative to competitors," Green told Yahoo Finance Live (video above).

In March, the cost of groceries went up 8.3% compared to a year prior. And although grocery inflation is down from the 13.5% peak seen in August 2022, higher grocery prices still weigh on consumer budgets and keep them looking for value.

In 2022, Thrive Market brought in nearly $500 million in revenue. Thrive Market has approximately 1.2 million paid members and a valuation of more than $1 billion, based on the company's latest funding round.

An annual $60 annual subscription fee for members helps to drive prices lower too, Green said. "By getting our margin from membership, it actually gives us a lot of flexibility to push our price as low as we possibly can."

Another strategy to keep prices low is asking members to spend at least $49 to qualify for free shipping.

Green said this minimum encourages customers to add more to their order and said the threshold is "less about cost and a lot more about our mission" to make healthy, sustainable living affordable and accessible to all.

Typically, a Thrive Market order has more than 15 items and more than $90 worth of products.

"The impact of that is good for the business. It means we can actually offer more savings because we don't have as much cost in shipping and packaging and that's really good for the environment where we can use ground shipping," Green said. "So we're able to get to more than half our members in one day or less on shipping. We're able to get to 95% in two days or less."