Wednesday, November 26, 2008

Plumgood Food Closing Dec. 5

Posted By on Wed, Nov 26, 2008 at 1:43 PM

Online grocer Plumgood Food is closing after four years of operation. Citing the economic downturn and an inability to compete on pricing with

large retailers, co-founder Eric Satz distributed a letter today stating that Plumgood

will close Dec. 5. Beginning Monday, Dec. 1, the web site will

discount all inventory by 25 to 50 percent.

Eric Satz's letter follows after the jump. 

Dear Friends:

Today we will announce that Plumgood is closing its doors on Friday, December 5th. I wanted to let you know first.

Over four years ago, Kate and I had an idea to start an online organic and natural, home delivery grocery business in Nashville. Our mission as to make life easier and cooking more fun. In early 2004, I asked the 20+ people I knew in Nashville to take a survey assessing the demand for such a service. About a week later more than 600 people had taken the survey. Demand was strong.

Kate came up with the name - I'll never admit to the names I came up with - and I came up with the purple. Name, logo and business plan in hand, I raised our start-up capital from a small group of
forward-thinking local investors in June, 2004. With six employees, a small warehouse with less than 800 items, a purple truck, and a
primitive website, we made our first deliveries just four months later in late October. 

We eventually grew to 40+ employees, a 20,000+ sf warehouse with nearly 5,000 organic, natural and mainstream items, a dozen purple trucks, and an industry-leading website. In the process, we served more than 9,000 customers throughout greater Nashville. While our business model evolved during this period of significant growth - we made changes in strategy, products and marketing - our mission remained the same, as did the vast majority of our team. Our programmer, warehouse manager, driver and picker/packer from our first days as a team will be with us until our last day as a team.

We believe our service was not only good for our customers, but good for Nashville, which continues to diversify its economy by attracting large corporations from major cities and supporting local ventures with assistance from the Nashville Capital Network and the Nashville Chamber of Commerce. Similar businesses to ours exist in Los Angeles, San Francisco, Portland, Seattle, Salt Lake City, Minneapolis-St. Paul, Chicago, Boston, Washington D.C., Virginia and New York City. We expect to see another grocery home delivery service plant itself here in the future.

Today's economy has taken its toll on our business the same way it has on many other businesses our size. The primary driver for our customer was always convenience. This consumer value proposition becomes far less compelling in an environment where the perceived value of one's time declines as significantly and rapidly as it has over the past few months. We've seen our weekly deliveries decline from more than 1,200 to less than 600. We simply do not have the scale and purchasing power required to compete on price with the country's largest grocers and outlast the current economic crisis.

Our business required expertise in warehouse logistics and distribution, supply chain management, inventory management, food service production, marketing, website development and finance. I have an amazing team of people whose skills cover these areas and for whom I will provide my highest recommendation. For those of you in a position to hire or looking to upgrade in a given area, please do not hesitate to contact me for leads to relevant Plumgood personnel.

For all the support you have shown me, Kate and Plumgood during the past four years: thank you, thank you, thank you. 

We - the entire Plumgood team - will miss serving you.

Wishing you a very Happy Thanksgiving,

eric satz
plumgood food
co-founder and ceo

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