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Sonic+ Tackles High Food Costs, Waste With Super App

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Sonic+ Tackles High Food Costs, Waste With Super App

The average meal travels 1,500 miles to its destination, according to CUESA, a nonprofit organization dedicated to growing thriving communities through local food markets. The organization said that this travel includes food moving from farms to processing plants, from the plants to warehouses, and finally to stores before traveling again to its final destination with the consumer. Along the way, that meal is generating greenhouse gas emissions, and a lot of them.

While CUESA promotes growing and eating locally, more options are popping up to help lessen the dependence on transporting food long distances and reduce food waste in the process.

Sonic+ is one of those.

Founded by serial entrepreneur and restaurant owner Jay Zhao, the mobile marketplace launched in April 2020 as a way to connect consumers with fresh groceries. It has since expanded into a "super app" offering grocery, household products and services to residents in Orange County and downtown Los Angeles. Plans to expand the service to all of Southern California later in 2021 and the Bay Area in 2022 are in the works.

Super apps, which combine many services into a single app, are popular in Asia, and starting to gain traction in North America.

Zhao's background in the restaurant industry identified a clear problem once the pandemic struck – plenty of food and nowhere for the suppliers to send it.

"I deal with a lot of vendors and suppliers were suffering a lot; some of them had sales drop 90%, which is devastating," he told Modern Shipper.

After graduating from Michigan State University, Zhao returned to China, where he launched an e-commerce consignment store. Eventually he sold his stock in that business and moved back to the U.S. with experience gained in building mobile apps and moving offline services to online. Sonic+ was born out of this concept, hoping to connect suppliers and wholesalers directly to consumers.

Sonic+ features an app that allows consumers to order directly from wholesalers. According to Zhao, this lowers the cost of the food and offers fresher product to the end consumer. The company charges a flat $5 delivery charge for all orders under $35.

The app handles all aspects of the transaction, from the initial order to payment to delivery scheduling. There are currently about 40 wholesalers on the platform right now. Zhao said Sonic+ has a 95% fulfillment rate.

Unlike other gig economy companies, though, Sonic+ owns its own last-mile delivery company – R&G Express. This allows it to control deliveries, although about 80% of the drivers are independent contractors and many work for other delivery platforms as well.

Typically the wholesaler sends a trailer loaded with the ordered items to a specified location where the local delivery drivers pick up for final delivery.

According to an investor presentation, Sonic+ offers more than 5,000 SKUs and has 8,000-plus customers. It has grown more than 100% in 10 months.

Zhao said Sonic+ has also been building a restaurant service that allows small and midsized businesses to order through its platform, helping them lower prices through scale. He noted that the average restaurant sees a 5% to 8% savings using the Sonic+ platform.

"They find it very convenient and easy to use," Zhao said, adding that there are about 40 restaurants on board with two to three more being added each week.

In addition, restaurants can utilize the Sonic+ driver force for deliveries of online orders. According to Zhao, Sonic+ runs the delivery service at cost for the restaurants and can help them by adding an HTML 5 website platform to handle online orders and payments, allowing Sonic+ to handle the entire online ordering and delivery process.

Zhao said he envisions this model being expanded into other business segments as well.

Investor David Hu, whose investment portfolio includes Coinbase, Fantuan Delivery and Meituan, is listed as a co-founder and director, and Sonic+ also enjoys the backing of Haiyi Software, a large software company in China.

Click for more Modern Shipper articles by Brian Straight.

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Image by StockSnap from Pixabay

 

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