When Home Appétit moved into a space just off City Avenue in West Philadelphia in 2020, founder and CEO Lee Wallach thought the company would stay five to 10 years.
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But given the business’ quick growth, particularly during the pandemic, the company is already “bursting at the seams,” Wallach said. The meal delivery company is moving to East Falls in September, to a former catering facility Wallach bought and is renovating.
Home Appétit, founded in 2013 in Wallach’s Center City apartment, is on track to bring in $10 million in revenue this year, Wallach says. His company delivers roughly 16,000 to 20,000 meals a week within a 50-mile radius.
Wallach sees untapped customers and opportunities he can now pursue.
In addition to buying the new headquarters for a little over $2 million, he plans to spend between $3 million and $4 million on renovations and business upgrades, which he’s been able to do through bank financing. He’s building out a fleet of delivery vans, opening a pickup window, and setting up the business to make and sell more meals. That includes hiring dozens more employees.
With that, Wallach predicts, Home Appétit will “have almost unlimited potential for growth.”
Why Home Appétit grew as some competitors fizzled
In Home Appétit’s early days, Wallach planned to discontinue chicken cutlets. Breading the chicken by hand and cooking it was very labor intensive for his small team, he says.
“I tried to take them off the menu, and I had many customers messaging me that I couldn’t do that,” Wallach said. “They’ve been on the menu ever since.”
It was an early lesson in what keeps people coming back to Home Appétit. Wallach’s earliest customers were doctors. Today, customers include doctors, nurses, and professors, as well as young families, and new parents who receive meal delivery as a gift. Of his original first five customers, two still buy his meals.
In recent decades, plenty ofmeal kit companies such as Blue Apron and HelloFresh have tried to shake up home cooking, providing customers with premeasured ingredients and detailed instructions. But they have faced retention challenges.
Home Appétit, on the other hand, offers fully prepared heat-and-eat or ready-to-eat meals — so do several competitors.
Factor has Keto and vegan options; Thistle offers gluten-free and dairy-free meals; and CookUnity brings together distinct chefs to craft menus.
They’re all helped by a trend of people eating fewer meals out, said Michael Infranco, a RetailStat analyst who covers businesses such as Wegmans, HelloFresh, and Kroger.
But the industry is facing competition from grocery stores that offer prepared meals and delivery, he says. Some are partnering with Uber Eats or DoorDash.
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There’s a lot of industry pressure around trends, says Wallach, who has steered clear of them.
“People are looking for protein, and people look for macros, and everybody wants to count calories, and everybody wants to know how many carbs are in [their food],” he said. “That’s not really us.”
His business doesn’t cater to a specific diet, he says. Instead, his team aims to make “restaurant quality” food.
“We’re not just dumping butter or dumping salt into a dish to make it taste good,” Wallach said. “We’re finding different ways and using different techniques to really elevate the flavor and the profile of the meals that we prepare.”
Home Appétit sets itself apart because of its focus on the long-term, Wallach said. He wants it to be an “essential service” to its customers.
That’s been true for Ricky Grenis of Northern Liberties. He and his wife, Bonnie, have been considering a move to the suburbs and often joke that they must stay in the Home Appétit delivery range, Grenis said.
“It’s hard to put a price on the convenience that it provides us as two working parents,” said Grenis, 37, who has two young children andworks in the wine industry. The couple tried out a few national meal-kit companies, but they were unimpressed by the ingredients and still had to cook.
Grenis is a vegetarian, but Bonnie isn’t, and Home Appétit allows them to order meals that both can enjoy, as well as kid-friendly options. “It literally feels like we have a private chef,” said Grenis.
The only downside, he said, is the amount of plastic packaging. “If we could figure out how to even be more sustainable, that would be a plus,” he said.
Staying competitive, and focused on the Philly area
On a recent day in July, Home Appétit’s entree menu included a miso-glazed salmon bowl with bok choy and brown rice, a pulled buffalo chicken sandwich, and a “Southwest Salad” with tortilla strips and buttermilk dressing. The company also offers small plates and add-ons such as roasted asparagus, steamed broccoli, and hard-boiled eggs.
Customers can order anytime between Tuesday and Friday night, to receive their meals the following Monday.
The minimum order costs $100 and covers four to six meals for a single person. Customers can also increase their order size for more people.
While some businesses have struggled with rising food costs, Wallach says Home Appétit has been partly insulated because it sources products from cooperatives and small farms.
“That’s kind of been a bit of a competitive advantage for us, and has allowed us to control our prices a little bit more,” he said.
Still, economic conditions have changed since 2013, particularly the costs of labor. He increased prices for the first time last year. While the basic order still costs $100, adding more people to an order now costs more.
The new headquarters is 23,000 square feet, up from the current 3,500-square-foot space, as well as a leased office in South Philly. With the move, the company will consolidate under one roof.
Wallach plans to have a staff of 200 to 250 by 2028. He currently employs roughly 50 full-time kitchen staff and 10 corporate employees. Meals are delivered by 40 to 50 drivers, who are mostly contractorsin their own vehicles.
Tech company founder Lilly Chen, 30, orders most of her food to her Chinatown apartment, where she lives with her cofounder. She has tried every food delivery service under the sun, she says, but Home Appétit stands out because of its delivery model. She says it’s because the company doesn’t outsource delivery.
“There’s a lot of other meal providers, that because they don’t own it, if something goes wrong — the food spoils or it’s late or you can’t find a delivery — they just kind of have to refund you and then you’re on your own,” Chen said.
Wallach plans to launch pickup at the new location, which customers have been asking for. Home Appétit also got its first refrigerated van.
Under the company’s current model, food gets delivered in insulated bags with ice packs in contractors cars, which puts a limit on how far meals can travel — but Wallach plans to expand the company’s delivery zone as he adds additional refrigerated vans.
He also plans to deliver on more days, not just Mondays, starting next year.
“If we can start delivering [closer to the weekend] and deliver to the Shore, I think it’s a home run for us for the summer months,” Wallach said.
He might pursue other markets in the future, perhaps Boston or Washington, D.C. But for now, Wallach is focused on the Philadelphia region, he says.
“There’s a ton of untapped opportunity here,” he said. “I’m excited to finally be able to take advantage.”
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