Munchery Owes Thousands More to Dandelion Chocolate, Other Vendors

Melissa Cohen of San Francisco cookie maker Salty Sweet had already baked her usual Tuesday order of 150 chocolate chip cookies for Munchery when she heard the news from a friend: The meal delivery startup had closed without warning, failing to notify its vendors — and in many cases, to settle overdue payments on past orders.

While the largest known debt belongs to Three Babes Bakeshop, a local pie company to which Munchery owes $20,000, many more small vendors have come forward with stories of their own unfulfilled payments. Salty Sweet says its owed $1,400; Dandelion Chocolate is out $6,500; and the owner of Native Baking Company, Jennifer Nguyen, says Munchery owes her $9,300.

“It doesn’t seem like it would be that big of a deal to a gigantic company like them,” says Nguyen. “But it’s a big deal to me.”

Munchery was founded in 2010 by Tri Tran and Conrad Chu, who departed the company before a major reorganization. The business, which sent ready-to-eat meals to its customers for $9 to $14 a pop, once garnered $125 million in investment from high-powered venture capital backers like Menlo Ventures and Sherpa Capital, expanding from San Francisco to markets in New York, LA, and Chicago.

Then it contracted: In spring 2018, CEO James Beriker announced Munchery would return to San Francisco only, laying off 30 percent of its workers. Finally, Monday, the company emailed San Francisco customers to say it was “closing its doors and ending operations effective immediately.”

But Vendors were left to discover that fact for themselves.

“What I find is so disrespectful in all of this is they didn’t even give us the courtesy of an email,” said Charle Farrier of Crumble & Whisk, a Berkeley cheesecake maker. “It’s a slap in the face.” Crumble & Whisk is owed $1,700, Farrier says.

Munchery had been late on payments before: “Sometime you had to nudge ‘em, but that’s not so unusual,” said Nguyen. That led her to keep sending brownies, cookies, pies, and cakes to Munchery for it to deliver to customers.

“They were always great about paying on time until last May, when they re-organized,” says Cohen of Salty Sweet. “Since then it’s been a constant hassle.”

One common sentiment among vendors, beyond their misgivings with Munchery, is sympathy and solidarity with one another.

“I feel badly for their employees and the vendors who are owed more,” says Cohen.

Most of the jilted vendors are owned and operated by women and people of color.

While boutique chocolate maker Dandelion is stung by a $6,500 loss, representative Jennifer Roy feels much worse for smaller operators. “We feel terrible for the small companies who will really suffer if they don’t get paid, such as Three Babes,” says Roy.

For now, Three Babes and more vendors will keep seeking contact with Munchery’s team — who have been mostly mum. Co-founder Lenore Estrada has been publicizing her efforts to contact Munchery on Instagram: She and others have even knocked on the doors at Munchery’s headquarters in Potrero Hill, seeking answers to no avail.

“We have not yet determined who will be managing the wind down process,” a spokesperson for Munchery wrote in an email to Eater. “All vendors should reach out to vendors@munchery.com and we will follow-up in the next few days.”

If Munchery declares bankruptcy, it’s possible that vendors will see some of their money returned. But they aren’t counting on it. The San Francisco based company has yet to pay $143,429.63 in overdue taxes in Delaware, where it’s incorporated.

“We have to operate as if we’re not going receive that any time soon,” says Nguyen of Noe Valley Baking Company. “Now I need to do some research on small claims court, I guess.”

• Meal Delivery Startup Munchery Stiffed SF Pie Company $20,000, Baker Says [ESF]
• Meal Delivery Startup Munchery Closes for Good, Laying Off Hundreds [ESF]
• Munchery Becomes the Latest Casualty of the Food Delivery Shakeout [Bloomberg]