Every entrepreneur knows their first recipe for business success may not work out perfectly – in which case, they may need to rethink the ingredients. That’s exactly what Tre’dish has been doing; two years after its launch, the Toronto-based start-up is today unveiling a new platform aimed at supporting food entrepreneurs worldwide. It features a much more extensive menu than first-time around.
This is a relaunch that reflects the company’s struggles in a tough marketplace. Tre’dish, first featured in Forbes in November 2021, set up shop in the wake of the Covid-19 pandemic. Founder and CEO Peter Hwang noted how talented home chefs around the world had set up small ventures during the crisis, producing authentic meals that they sold in their local communities. He launched Tre’dish as a marketplace through which those chefs could build enduring businesses in the aftermath of the pandemic.
“We built and launched a simple marketplace for home chefs; they could use their home kitchens to prepare food and meals to sell in their local community,” recalls Hwang. “It was a model that made sense and it’s still very romantic and aspirational in its nature but what we realised really fast was this model in itself was flawed. The food and hospitality sector for small operators is fundamentally broken; there are big challenges to overcome to make this type of model work in the long term.”
In practice, Hwang explains, home chefs coming on to the Tre’dish marketplace enjoyed significant demand for their produce, but found they couldn’t turn a profit. Challenges such as food price inflation, labour shortages, delivery charges and energy costs conspired against them; paper-thin margins and the investment needed for expansion made growth almost impossible.
“Unless you provide meaningful support by way of software, tools and partnerships, the average food entrepreneur will not be able to build a profitable business on their own,” Hwang adds.
He’s not wrong. In the US alone, the National Restaurant Association estimates that a 30% failure rate is the norm; other studies puts the figure even higher – a study by Ohio State University found 60% of restaurants don’t make it past their first year. Separately, research focused on start-ups in the food industry suggests 80% of new businesses are doomed to failure.
Today, then, the challenge for Tre’dish is to find a way to support the businesses selling through its marketplace so they can survive and prosper. Hwang’s solution to that challenge is the launch of a comprehensive suite of new tools and infrastructure designed to make running a food business much easier.
That includes everything from support with getting started in ecommerce to digital analysis of dish profitability and cost management. Tre’dish’s new platform will also offer access to buying groups, so that users can reduce their input costs, and provide support with marketing so they can reach a larger target market. The platform also features compliance solutions and health and safety tools. Users will even be able to book space in pop-up kitchens and commercial environments, rather than having to rent kitchen space.
Having broadened the offer in this way, Hwang sees Tre’dish expanding its reach; as well as the home chefs that the start-up originally targeted, Tre’dish could serve food subscription businesses, specialist caterers and essentially any sub-scale food entrepreneur in need of commercial support. The global market is enormous, Hwang points out – he is targeting 1 million users.
That’s certainly ambitious. In its first iteration, Tre’dish’s marketplace focused on home chefs in California, where it signed up less than 100 businesses. But Hwang says he already has 100 food entrepreneurs onboarded to the new platform, plus another 800 queuing up to join. “The new model is far more scalable,” he adds.
The full-scale new venture will start out in Toronto, but Hwang plans launches in other locations. He has also begun talks with investors – having raised seed finance of around $10 million in 2021, Tre’dish is now moving towards a Series A round likely to come in at around $30 million.
“Our goal is to build a new food movement,” says Hwang, for whom this venture is very personal. His own parents moved to Canada more than 40 years ago and poured their energies into the food and hospitality business they built. “I know first-hand the dedication that is needed to run a business in the sector,” he says.