Why Boxy My Vegetable Subscription Box Failed in 2015

On February 3rd, the headlines on the Playa Times newspaper exclaimed “Pesticide Free Vegetables Now by Subscription” and it was followed by the statement “Local Community Comes Together to Make an Impact”. Then on May 16th, I had to throw in the towel and declare that this project had failed.

But keep in mind that it failed for me, and I’m sure you can make it work for you if you want to, so read this story and if you like, and I’ll send you all the materials and customer details, if you make a case of how you can do it 10 times better. But before any of that, let’s go right into the painful details of learning what I had, enjoy…

Remember, having the vegetable section “back home” meant that you could pick from all kinds of local organic fruit and vegetables. Well, in this case, Playa del Carmen had a very limited offering of those healthy foods because of multiple factors, but Boxy.mx was set-up out to solve this problem, and it started with a monthly subscription based vegetable and fruit box.

A Techie’s Perspective to Solving a Food Need: How Do I Start?

Venting my frustration, on December 31 of last year (2014), I decided to ask if members of the Facebook group Expats & Locals Playa del Carmen would be open to a veggie-basket much like I heard about. I knew Greenbeat in Tulum was doing this, and since I could hardly find any organic vegetables on the local farmers markets at Coco Beach, Kava Kasa, and El Jardin, I set out to see if I could bring it to Playa del Carmen. Soon after, around 40 people filled out their veggie and fruit wishes in a survey that was setup, and within six days of the original question, the payment page for the first Boxy was setup. Over 40 boxes were sold within the following 20 days using the Mexican system Boletia. This was originally designed to sell event tickets, but it was the perfect hack for my Minimal Viable Product (MVP) and it also accepts Paypal, Credit Card, and Oxxo payments, so it fit the needs perfectly and proved that locals and expats were willing to pay 6 weeks in advance, in the amount of 400 pesos (27 USD).

So within 20 days we had a “payment system” hacked together and 40 boxes sold. Now we faced the next problem… the products.

Boletia.com

Ehhh? Where Do I find organic food in Playa Del Carmen?

To be honest I did not know where to get the vegetables I promised when I sold the boxes. I knew the biggest problem of the chickenpreneurs was that they focused on the wrong things first and they did not address their fear, which was asking for the money. So that’s what I solved first; show me the money.

The problem I was trying to solve was that the local farmers didn’t have enough identifiable demand for organic vegetables and fruit. The places where they did sell them, like Bio-Natural, only get by-weekly shipments. Although it’s a great start, the majority of locally grown products are heavily sprayed with pesticides. Farmers don’t mind producing pesticide free vegetables, and their great initiatives in Oxkutzcab, Nuevo Durango, Tulum, and even at the international school in El Arbol in Playacar, they produce great vegetables. But they did not increase production since organizing transport and finding the right clients, that understand that these products are more expensive, is just not something that comes natural to them.

Who supplies pesticide free vegetables in Playa Del Carmen?

We found an entire list of people that could provide us with pesticide free vegetables. This was our original list of suppliers:

We have most of the contact details of each person (phone and email) but I’m not releasing these here (shoot me an email to get those). We eventually selected the people we found to have fitting products for our first box and that were Julian, Alejandro, Alejandro, and Carmen. With these four suppliers we made the first box.

Oops! Changing Veggies – Some are not in Season

Something we learned by visiting four suppliers was that we have to deal with seasonal goods and well… nature. So we found out that this region is not the best for carrots or celery, so the likelihood of having access to these vegetables was unlikely. The availability of Kale, Cucumber, Okra and Zucchini was also so limited that we could only get these in the box when we make commitments to grow them for us. This required a down payment and some planning (6-12 weeks in advance). Also, Squash is not in season right now, so again, it ended up not being in this box. This is what we had in our first box:

  • Arugula
  • Chard
  • Chaya
  • Tatsoi
  • Lettuce Mi
  • Spinach
  • Lemon grass
  • Sweet potato
  • Radish
  • Tomatoes

Boxy 1 - Veggies

Delivery Date & No Fancy Boxes

Wednesday (March 4th) we had a pick-up of your box at Coworking Nest between 12 noon and 8pm. We got 100 boxes of 30x30x30 centimeters (10x10x10″) with the veggies as mentioned above. We decided not to go with any branding, logos, or other fancy ideas we had for the box, even though I violated some of my own advice by going for the idea of a fancy mini-garden inside the box and logos carved out (my little time wasting vice). Edgar, who joined me in the project, reminded me to focus on getting a great product in our clients’ hands and get them happy with the core product of “pesticide free veggies”. It was a major challenge to get the veggies in everyone’s hands and prices were higher than we expected, as was the availability of produce.

Our Boxy's

Financial Overview

Something that seems kind of obvious, but just to remind you “Want to have a lot of money? Don’t start a veggie box in Mexico”. But we had the idea that if we could receive payments online, it would be a huge time saver and we thought that each team member deserved at least 200 pesos an hour for their contribution. So eventually we thought we could scale this to 4000 boxes a month and then finances would work out, we’d saved the world, make it part of Nexo, and make a decent living… Well it might work out that way ideally, but let me share the cost of Boxy 1 on paper:

Cost Boxy 1
Delahuerta QTY Price Order Total
Acelgas 1 Bundle 40 43 $1,720
Chaya 1 Bundle 30 43 $1,290
Espinaca 2 Bundles 30 22 $660
Lechuga 2 Bundles 30 22 $660
Rabano 15 Pieces 30 43 $1,290
Tomate 1 kilo 30 43 $1,290
$6,910
Stefan
Lemongrass 1 bundle 43 20 860
860
Carmen QTY Price Order Total
Lechuga 250 grams 40 43 $1,720
$1,720
Julian
Arugula 1 kilo 150 10 $1,500
Tatsoi 1 kilo 140 11 $1,540
$3,040
Alejandro QTY Price Order Total
Ideal Edenic
Camote 1 kilo 30 22 660
660
Cardboard Boxes (100) Uline.com $1,526
Plastic Biodegradable Bags (1000) Uline.com $1,386
Shipping & IVA bags and boxes 1545
Nonsense Logo Stamps Stuff $450
$4,907
Boletia Cost 40 5 $200
Boletia Commissions 2.50% $403
$603
Grand Total $18,700
Per box $467
Revenue Boxy 1
Pickup Orders 39 400 $15,600
Delivery Orders 1 500 $500
Grand Total $16,100
Per box $403
Learning Loss -$2,600
Per box -$65

The first box, which was ready on March 4th, was sold at 400 pesos. And this grassroots initiative, although young, solved a real need in the local community and supported local producers from Quintana Roo. Using online payment systems like Paypal, credit card, and direct payment at any Oxxo takes away a lot of hassle from the process, and would prove that people are willing to pay online, and that would make this project scalable. Building a sustainable business is not charity, and it can be done with organized social media, mobile applications, and digital payments. I hoped this idea would grow in a consumer cooperative wherein the team would have equal shares and equal pay, and I did my best to find the best people for that team.

With Edgar on board, I felt stronger about pushing the initiative since I tend to do better with a cofounder. The help from him, Ana my girlfriend’s support, and the full day that Nathasha (Edgar’s girlfriend) contributed, made all the difference in making the first Boxy the little success that it was.

Lessons from our first box that I’d like to pass on…

When we looked at Boxy 1, we looked at it as an experiment with variables that we needed to test out. We thought of how many of the 2400 expats we reached would sign up, how fast and how much would they be willing to pay. We did three surveys for the first one before Boxy to measure what people wanted. The second one was for the people that signed up for the first box, and the third one was four weeks after the delivery. All of these gave us emails, names, and ideas from people that seemed to be very passionate about the topic of locally grown and organic foods.

I learned that this is such a fun area to work in, but I still had a very high-maintenance life, and making the switch was not yet possible. But I’ll be back…

Now what you could do is to test out in Boxy 2, if you decide to take on the project.

Unknowns to Retest:

  • Validation. Validate that the price of the box is right. We worked with expats that were used to higher incomes and higher costs of living. The realization that these vegetables were going to be more expensive was not a problem in the community. Now, we see that profits are only possible at a scale. I would test out a price point of 250-300 pesos a box per week. Combined with scale (so overhead cost can drop from 138 pesos per box to maybe around 20 pesos) at this scale, it would make it possible to pay the staff.
  • Test delivery. We did pick-up, but we did it without a way to keep products at 7-9 degrees Celsius, and this was hard for us. The perishable nature of the products may be a better fit for temperature controlled delivery. The control over the credit card and delivery at the end made it a perfect project to ship all kinds of products in those boxes and allow it to eventually to be profitable. So a cooling van to pick-up the goods at the farms, repacking and shipping to offices and homes, seems like the only solution we came up with to keep the control over the product and client. Again this is with a for-profit business in mind.
  • Stronger Content. We noticed that the amount of greens in the box made it a hard box to keep fresh. Also, the amount of calories and the perception of value play a role here. The post delivery survey showed us that the perceived value that the later people who picked up the box (they did not look as fresh and full as in the early afternoon). So adding more things like potatoes (or the local versions), rice, beans, tomatoes and larger and heavy products would probably raise the perceived value of it while keeping the price right and preserve products freshness.

Goals (if would do the same thing next time)

  • Repeat sales method as Box 1. Use Boletia again and test if it will be as easy to sell them six weeks in advance. I mean, you have to see if presale worked because of the passion for the product, or if it was connected to the trust I have within the community.
  • Really try and make a profit, aim for 20% per box so paid staff hours can be included.
  • Deliver 40 boxes again to not go crazy in logistics and change some variables of the box to validate them.
  • In the survey it seemed to be really important that the product came from “local sources” and they defined that as Quintana Roo. State, or in the case of hard to get products, if they are open to receive from a neighboring state.
  • Most probably let clients pickup boxes again since finding delivery is so hard and expensive it would only work at scale and I would not scale yet unless I figure out more exact what works and what does now.
  • We got 6 out of 10 for product quality, so aim to get 8 out of 10 before moving to box 3. I think other product types that will look good after 8 non-refrigerated hours would be a good choice.
  • Learn how to check the quality of local partners. We went to visit some of them, but not all, and neither always saw our plants growing before picking. And this lowers the trust we have in suppliers as well as the trust we get from our clients.
  • Learn what products our clients prefer by including different ones than the last time.

Ideas to test out:

  • As content, you can do recipes of finished meals and deliver meals over just ingredients. Imagine a curry recipe with the source and veggies all ready to just throw in a pan and it’s done. I think the value perception increases, and would allow it to make some profit for it to scale it up.
  • We teamed up with local delivery points, where they gave us something instead of giving something to them. For example: If you have Bio-Natural or other organic shops as a pick-up point, maybe asking 20 pesos a box would equal the money they spend marketing on getting our type of clients in their shop. Imagine what 1000 people a month in an organic shop will do for your profits. On the other hand, this might be scary since you are giving away client information that can easily be taken away. With a copy of the box, you can easily be out of business.
  • A recipe of a fruit cocktail, breakfast bread with something, Indian dish with vegetarian ingredients wherein chicken can be the extra (clients can buy their own) are all ideas that you would be able to work with. Fruits seem plenty, and again, the problem there, like vegetables, is that getting the fruits/veggies from the farm to your distribution point can be problematic.
  • Clients could pick, for example, recipes that contain one meal per recipe. They can eat with two people from two meals and so would have four individual meals.

Why are we stopping Boxy?

We have 40 boxes sold, lost 65 pesos on each box, but weirdly enough… I’m proud of that. Although it ended with this blog, we were able to get 250 people to sign up for an email for a notification alert when we would be able to do Boxy 2. We figured out a lot of things that were invaluable for a next effort in organic food distribution in our region of Mexico, and even though we did not bill the dozens of hours invested by two people, we got a minimal viable product shipped (read my blog here if you don’t know what an MVP is).

The second thing I’m proud of is that my expat community got together, and without hesitation, paid 400 pesos within 14 days knowing nothing more than the fact that I would do my best to give them a product with the money. It showed community spirit and that this is a real need that if handled well, can turn into a business that can change one of the world’s top 10 problems we need to focus on. Lastly, it was great that one person (Edgar) just started helping, with the notion that it was just an experiment, but at the same time, we were learning something, and it could lead to something better for the community.

Our Team

Don’t forget, that in its current form, it’s a non-profit project and its losing money. I think only in the large scale (weekly 1000 boxes) can it work really well, in the way it would also give part-time work for two people,  making 20,000 pesos off if a month (kind of decent in Playa terms).

What I’m not proud of is that I am personally not ready to dedicate all my time to these top 10 problems, and I still want to first focus on my own commercial project. I will travel for a good amount of time after August this year, making it hard to continue this project, and Edgar will also be out of the city for a long period. Both of us are cornerstones of the project, and falling over makes a business that depends on local presence, well… impossible. I have not found any reliable and professional person(s) that wanted to take over this business, in the way that would really keep the idea of scaling up production of pesticide free foods alive. But maybe this post can change that.