A Wonder van parked outside of a customer’s home. Each Wonder vehicle is staffed with one chef who preps the meals before bringing them to the front door.
Whether Americans are looking to order a quick bite from a local fast-food chain, or they want to feel like they’re eating at a five-star restaurant from the comfort of the living room, Marc Lore wants to redefine at-home dining.
The former head of Walmart’s e-commerce operations in the U.S. has teamed up with Scott Hilton, who served as chief revenue officer of Walmart’s U.S. digital arm, to debut Wonder Group, Lore wrote in a LinkedIn post Tuesday. Lore is Wonder Group’s CEO, while Hilton serves as CEO of Wonder, a division within the holding company that oversees a fleet of trucks with mini kitchens inside.
CNBC reported on Lore’s and Hilton’s involvement with Wonder in May, when the business was operating in stealth mode in the affluent town of Westfield, New Jersey. The duo has since launched a delivery service for local restaurants, called Envoy, which is very similar to platforms such as Grubhub and Seamless. The two businesses operate side by side within Wonder Group.
“It’s really a one-stop shop for all cooked food,” said Lore in a Zoom interview. “And we think there’s a real chance to have a winner-take-all in this market. … You don’t really need another app.”
Next year, Lore and Hilton plan to bring Wonder and Envoy to Westchester County, New York, parts of Connecticut, northern and central New Jersey, as well as a portion of New York City. Their ultimate goal is to expand nationwide, by targeting communities with dense populations. Lore said the company plans to have 1,200 to 1,300 mobile kitchens roaming the Northeast next year, and to triple that by 2023. It has about 60 mobile kitchens operating to date.
Hilton’s vision for Wonder is to give U.S. households access to fresh-cooked meals from top chefs in all parts of the country.
The idea is that someone living in upstate New York could order the famous cheesesteak sandwich from Atlanta-based Fred’s Meat and Bread. Or someone in New Jersey could order a wood-fired Margherita pizza from Nancy Silverton’s Pizzeria Mozza, which is based in Los Angeles. Wonder partners with select restaurant owners, including Bobby Flay and Jonathan Waxman, to gain exclusive rights to recreate items on their menus.
“Wonder, in short, is a food and tech company,” said Hilton in an interview. “It’s on-demand home dining.”
Wonder also wants customers to receive their food when it’s piping hot. So it finishes off the final meal prep inside of vans that have been outfitted with kitchen appliances, once the driver arrives at a destination. Each Wonder van has one trained chef onboard and is dedicated to only one restaurant.
Ingredients are prepped and packaged at a large central kitchen before they’re distributed to smaller kitchen hubs, which are accessed throughout the week by Wonder’s vehicles.
So far, business in the markets where Wonder has been serving food has been driven largely by word of mouth, Hilton said. Wonder’s vans, plastered with the company’s logo across the side, serve somewhat as roaming billboards, he said.
Wonder is currently working with 17 restaurants, servicing about 17,000 households in New Jersey. As more restaurant options are added to the platform, a user is more likely to return and order dinner from Wonder again, Hilton said. The company is also planning to expand into serving breakfast and lunch soon. Recently, it debuted a selection of desserts and added cocktails after acquiring a liquor license.
Wonder and Envoy are coming out of stealth mode at a time when more Americans have adjusted to eating meals at home during the pandemic. Some consumers have preferred cooking their own meals, while others have turned to takeout and delivery from their favorite restaurants. Experts anticipate some of these behaviors will stick around, even as Covid fears ease.
To be sure, food delivery is a difficult business to be in and make money. DoorDash, for example, has seen sales surge in recent months but it remains unprofitable. Its net loss more than doubled in the three-month period ended Sept. 30. And ride-hailing company Uber has long lost money on its Eats division.
Envoy, notably, uses its own fleet of cars and drivers separate from Wonder.
According to Hilton, Wonder’s advantage compared with other food delivery platforms is that it only serves homes in a set area in order to do multiple deliveries in one trip so that a driver is not making “empty” runs. And since the company preps food at scale in a central kitchen, that process helps to keep food costs lower than in a restaurant, he added.
For a Wonder van to break even for the evening, it needs to make about $100 in sales per hour, according to Lore and Hilton.
Lore, who co-founded Jet.com before it sold to Walmart, said Wonder’s strategy is a bit like taking a page out of Netflix‘s content playbook.
“We want to lock up all the best proprietary content,” he explained. “Every chef that is well known — every restaurant that’s great — we want to basically lock it up and have it exclusively on Wonder.”
“We do know that one day there will be competitors, but we’ll have all the best content locked up ahead of time,” said Lore.
Wonder Group recently raised venture capital from investors including NEA, Accel, GV, General Catalyst and Bain Capital, Lore said. The company declined to provide total funding figures. However, a person familiar with the financing said it has raised more than $500 million to date.
Since leaving Walmart earlier this year, Lore is now part owner — along with former baseball star Alex Rodriguez — of the NBA’s Minnesota Timberwolves. The duo’s venture firm, Vision Capital People, is also looking to make other bets on digital commerce. Meantime, Lore is working on building a so-called utopian city of the future, called Telosa.
But Lore said he has committed all of his “business” work time to Wonder Group.
“I feel like I’ve been shot out of a cannon. … I just had all these ideas flowing in,” Lore said about his time since leaving the big-box giant. “[Wonder] really has the opportunity to change how we think about food — how we eat.”