What’s the plan for dinner tonight? If it involves cooking, it’s easy enough to find a grocery store to grab ingredients. But if it’s some takeout or a sit-down meal, where do those who make food get their food?
Many industries have seen advancements in tech revolutionize every aspect of execution and fulfillment, from automatically inputting orders to tracking shipments, all without ever having to remember order numbers or balance spreadsheets. Not all industries are created equal though, and that’s how ChefHero got its start.
Saif Altimimi, along with co-founder Diego Fererra, started ChefHero to solve a problem discovered through a family member. Altimimi’s uncle ran a produce supply company and one day he played a voicemail order request. Large restaurants would call his uncle and leave messages with orders. That day it was East Side Mario’s calling for cases of potatoes and strawberries. There was no verification, no electronic orders, and no tech in site. It was pretty much all based on trust and prior relationships. Altimimi’s uncle had to manually put the order into QuickBooks and ship it out the next day—his tech stack was a pen, paper and a computer that could run Excel.
There are still many restaurants keeping track of their orders and product delivery via this archaic method that it’s almost unbelievable that the majority of chefs and kitchen managers haven’t either moved on to become highly-skilled data scientists.
In 2018, Canadians will spend 30 per cent of their food budget on eating out, which will total an average of $3,600 each year for a family of four. All of this money spent each year, with no updates or disruption to the backend of things in sight. Altimimi knew something had to change.
“It’s not very obvious, but if you walk around downtown and you see these unmarked trucks, those are usually food suppliers,” says Altimimi, CEO of ChefHero. “The idea was that all of these small suppliers have no tech, so let’s become their backend and power that.”
ChefHero is a demand-focused platform that helps chefs, restaurateurs, and other cooks order exactly what ingredients and products they need, all within an easy-to-track system. It sounds simple enough, but nothing like this had really been done, so ChefHero started with the basics.
“With this market, the data is so fragmented, there’s no easy way to search and consolidate,” says Altimimi. “There’s no Bloomberg terminal for avocados in Toronto.”
Altimimi called his first platform VendorHero, then pivoted to ChefHero once he realized the focus should be on the ones buying the product. Chefs and kitchen managers can use ChefHero as a supply network to order everything in one place, with one invoice, one payment and one order. Permissions can even be set, meaning chefs and line cooks can add to an order, but only the kitchen manager or someone else can check out.
The real task for ChefHero was categorizing everything in the food world. There’s so much lingo in the dining world that an entire dictionary could be written, so when it came to turning every food in a SKU, it proved rather difficult. For example, Royal Gala apples could have multiple names in any given restaurant: RG apples, Galas, dessert apples, or just apples. Repeat that for every cut of meat and vegetable and it gets more complicated. But almost everyone Altimimi approached embraced his vision.
“If you look at the restaurant space today, there’s Ritual, Ubereats and more that have paved the way for technology in kitchens,” he says. “Five years ago, this would all be hard to do. Now restaurants understand the value of tech on the frontend, but at the back of house, it’s all largely offline. When we talk to restaurants, they say why didn’t this exist five years ago?”
ChefHero’s platform acts like a procurement team in digital form. They can help secure more competitive pricing through a network of dedicated suppliers by streamlining the process and adding transparency. Customers have outlined three reasons they keep using ChefHero: live and updated pricing, as there have been reports of overpriced boxes of produce; selection, which includes everything from halal to kosher to AAA organic and more; and transparency, because with the old method, a box of lettuce may arrive half rotten, prompting a chef to mark the shrink down with pen and paper and hope they get the credit back in 15 days when the supplier arrives again.
“This is an industry where both sides inherently don’t trust each other,” Altimimi explains. “There’s always back and forth. Payments happen on terms and getting a credit back on items that are shorted or have quality issues can be really hard to do. Nine out of 10, they don’t match letters on both sides. We come in and simplify the process with transparency on pricing and invoices.”
With ChefHero, restaurants can see savings between 10 and 15 per cent, which is huge for an industry that historically boasts small profit margins. ChefHero itself profits through a commission on the backend for suppliers, as they “provide value through additional demand, invoicing, customer service, and ordering, so there’s a margin on the supply side they can collapse,” according to Altimimi.
“The goal is never to market up and be more expensive on the demand side,” he says. “We look at the demand and make sure it’s priced accordingly.”
Altimimi grew up in Waterloo with the rise of Research in Motion and became inspired by how something so massive could operate in his hometown. He was always doing something on the side, whether it was selling t-shirts or sealing driveways, so starting a real company was a no-brainer.
He founded NoteWagon in 2010 while he was in university as a way for students to buy and sell class notes. Altimimi successfully pitched the company on Dragons’ Den (but the offer fell through during due diligence) then moved to Silicon Valley for two years to grow and scale the company, eventually aquiring Notelog in 2012.
After that, Altimimi and his other ChefHero co-founder Diego Fererra worked in blockchain before having that fateful discussion with his uncle that led to the discovery of how antiquated the supply networks of restaurants were.
The two struggled to find the best place to base ChefHero but eventually settled on the downtown core of Toronto. It was between Altimimi’s hometown of Waterloo and Fererra’s hometown Scarborough, and the food service market was simply much bigger in Toronto than anywhere else, which meant more clients and business.
For new startups that are growing rapidly, it can be difficult to place a huge emphasis on culture, but ChefHero has done so by making sure everyone who joins the company embraces a fast pace and rate of change.
“Culture means an alignment on value and outcomes,” Altimimi says. “What do we value as a company? Our DNA is high-velocity decision making and moving fast. We cannot operate like a large company, so our advantage is speed and experimentation.”
An initiative at ChefHero called Side Hustle lets employees work on small projects on their own that can then be integrated into the main platform. Altimimi explains that there’s a few in the works right now that have huge potential as growth models, all of which stemmed from little ideas.
Every new hire also takes a trip to the Ontario food terminal with Altimimi, located on the Queensway in Toronto. A large nondescript white building, it is the hub for all food companies in Canada’s largest city and the surrounding area. Altimimi believes it’s important for new workers to see it.
“People often don’t understand where food comes from,” he says. “It’s eye-opening to see that chain of events and how the impact we’re having on that side of the business is very important.”
ChefHero raised a $12.6 million Series A in late April of this year, so the future of the company revolved around how the utilize that new funding to bring in new customers.
The company has three goals for their funding round: the first is to continue their ramp-up of operations in Chicago, which saw its first location go live today. ChefHero currently has a small team based in the city looking to build out operations. Second is to hone their predictable demand to prove that the company can acquire clients fast and at scale.
Finally, ChefHero wants to expand the categories they offer. Right now, they have dry goods, meat, seafood, produce, and baked goods being added soon. The difficulty comes from standardizing the data, as is evident further above. The operations team must build taxonomy structures for each new addition to the platform.
It might not be long before ChefHero becomes as synonymous with restaurant employees as Ritual or Ubereats. But until then, Altimimi will continue to fight his good fight by replacing one pen and pad of paper at a time.