ŞefGibi

What did it do?

ŞefGibi was a start-up that sent weekly subscription meal kits to people who wanted to cook at home. Each kit contained illustrated recipe cards and all the ingredients needed for the recipes in the right portions. Six different recipes were offered each week, and the dishes could be prepared in 30 to 35 minutes. The service delivered to central districts of Istanbul.

Why did it shut down?

According to the founders, ŞefGibi was growing in numbers, but its business model did not pay for itself. As food prices rose, the price of a kit climbed to around 180 TL, and at that level orders fell. Keeping the business going would have required raising the price to around 250 TL, which risked driving customers away. Because cash flow was not enough to scale, the founders halted the subscription operation in July 2019. The team then pivoted to a platform producing healthy-living content.

The story

Orçun Seviğ and Korgün Koyunpınar were two friends whose busy working lives left no time to try new things in the kitchen. Searching for recipes, shopping and portioning ingredients took the joy out of cooking. In spring 2017 they decided to turn this frustration into a business, spent the summer preparing and launched ŞefGibi in the autumn.

The model was simple. Each week subscribers chose from six recipes, and illustrated recipe cards and precisely measured ingredients arrived at their door. The recipes, mostly based on red meat, chicken, fish and vegetables, could be prepared in 30 to 35 minutes. According to a February 2018 report by egirişim, a Turkish start-up news site, the venture was growing by around 10 per cent a week. A Webrazzi report in October 2018 said that kits for two cost between 120 and 130 TL, that more than 100 households had cooked over 1,000 meals and that the team consisted of six people. The founders planned to raise investment and expand first to all of Istanbul, then to Ankara and İzmir.

Rising food prices, however, upset the calculations. When kit prices climbed to around 180 TL, orders began to fall. By the founders' reckoning, keeping the business going would have required raising the price to around 250 TL. According to an egirişim report in July 2019, rather than raising the price further and pushing the market, the team chose to walk away, and ŞefGibi ended its operations.

Two weeks later Koyunpınar told egirişim that they had closed the subscription operation and turned to a healthy-living platform. According to him, monthly subscriber growth was between 20 and 30 per cent, but costs had exceeded the level that could be passed on to customers and cash flow was not enough to scale.

ŞefGibi's story shows clearly that a growing customer base cannot save an unprofitable model. In a business where the cost of ingredients makes up most of the price, inflation eroded the margin a little more every week.

Lessons for founders

• In ingredient-heavy businesses such as meal kits, inflation erodes margins fast; test price elasticity early.
• Your growth rate will not save you while your unit economics are negative; track the profitability of every order.
• Stopping in time is also a decision; you can change direction before your resources run out.

Sources

1. Meal-kit start-up ŞefGibi ends its operations (in Turkish) (egirişim, 2019-07-13)
2. Subscription meal service ŞefGibi pivots because it was not profitable (in Turkish) (egirişim, 2019-07-30)
3. ŞefGibi, the weekly meal-kit start-up that makes cooking at home easier (in Turkish) (Webrazzi, 2018-10-25)
4. ŞefGibi: a start-up delivering meal kits (in Turkish) (egirişim, 2018-02-02)

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