Fifth Tap: Picnic ‘Milkman 2.0’

Ladies and gentlemen… This one has a very special spot in my heart; Picnic

About Picnic

Founded in 2015, Picnic is an online grocery delivery application operating in the Netherlands, Germany and France. Its aim is to revolutionize the grocery process in a more efficient and sustainable way by saving its users’ time and money.

The Company adopts the traditional milkman concept tailored to the modern world by offering free delivery with its signature electric vans and a more affordable price point than other retailers.

In its latest round last September led by the Gates Foundation, Picnic raised more than USD 700 m.

As a Turkish who is proud of Getir’s success, I am also a bit skeptical about it and to be honest, I do not think the world’s most interesting problem is to get an ice-cream in 10 mins. But it is obvious that grocery shopping takes a huge amount of time in our lives, and this burdensome process should be optimized by using technology. I believe that Picnic does this in the most sustainable way. So how does it do exactly?

1. Users can make an online order until 11 pm via Picnic app
2. Picnic app combines these orders and sends to its suppliers
3. Suppliers prepare everything freshly and sends to the distribution center
4. From the center, all orders are shipped to the local hubs
5. From the local hubs, the orders are loaded onto cooled electric vans, which deliver it to the user using its fixed route, three times a week at a fixed time

The Business Model

The Company, whose revenue has been at least doubled per year since the beginning (see below graph), has the second largest market share in the Dutch online grocery sector.

Even though Picnic could not make any profits out of it, the loss decreases every year signaling that the operations mature and so do the financial figures.

On top of that, Picnic as a company whose whole business concept is built on efficiency and sustainability puts high importance to use the most optimized business model;

• The Company has a short cash conversion cycle meaning that working capital is not tied up for long, and it has great liquidity as it does not keep inventories for more than 2 days
• It does not use packaging if it is not necessary
• The orders are prepared with the minimum packaging and delivered in reusable cases instead of plastic bags
• The shipments are made with electric vans that follow the same route which is chosen according to the user density. Picnic decides to launch a new route according to the number of people in the waiting list of that area, so that it knows that the route is profitable beforehand

The Sector

During the Covid-19, grocery and pharmacy saw the biggest growth of online shopping in categories –although people know they can go and get food and drugs in stationary shops. As a result of the pandemic, the online grocery shopping market size increased by 30% and it is expected that people will continue using online supermarkets to have groceries delivered at home.

Yet still, the share of e-commerce accounts for 2% of the grocery shopping in Europe in 2020, indicating that there is still a big room for expansion for the companies in the sector.

The Competition

There are not sustainable e-grocery companies, but the unsustainable ones can count as competitor

• Getir: Instant grocery delivery startup was founded in Turkey in 2015 and grew rapidly as a result of the pandemic. It is now available in the USA, Netherlands, UK, France, Spain and Italy. Its net revenue in 2021 is forecasted to be around USD 1b. It was valued at USD 12b in its USD 768m round in March 2022
• Gorillas: On-demand grocery delivery company was founded in Germany in 2020 and now available in the USA, Germany, Belgium, Netherlands, United Kingdom, France, Italy, Denmark, Spain. Its net revenue in 2021 is forecasted to be around USD 220m. It was valued at USD 5b in its USD 700m round in February 2022
• Flink: This is another German fast grocery delivery startup, which was founded in 2021 and now available in Germany, France and the Netherlands. It was valued at USD 2.1b in its USD 750m round last December

The Team

• Michiel Muller — Co-founder, CEO, Serial entrepreneur, Co-founded several other companies, including the unmanned petrol service station chain Tango and road assistance company Route Mobiel
• Bas Verheijen — Co-founder, Board Advisor, Ex-marketing manager of Albert Heijn
• Frederik Nieuwenhuys — Co-founder, Serial entrepreneur, Ex-principal of OC&C Strategy
• Joris Beckers — Co-founder, Serial entrepreneur, Ex-brand manager of P&G

The Future

As a defender of sustainable future, I deeply wish ‘Picnic’ a long term success with huge investment rounds which it will utilize to hire more people, build a more sustainable culture and change the way of grocery for all. As the world untangles its essential problems (Covid-19 and the wars), actors will pay more attention to work together for a sustainable world than only twaddling about it. And I believe, this will be the time which Picnic will bloom among its competitors