Cirkle
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Cirkle
Food/logistics
limited liability company
Belgium
Recycling concept, automated order system.
Ben Bramich, Founder of Cirkle
Julien Verheughe
Ben Bramich
Summary
At Cirkle you can order high quality products, mostly fresh food and organic food. The focus of Cirkle lies on reducing waste. Waste of space, fuel, food,etc. Every step of the delivery process within their circular model is done with a minimum of waste.
Not only does Cirkle deliver great products, they also take back your waste, recycle it and donate the money to charities. Hereby they are helping the customer to give something back to the community.
Background
After working a couple of years as an engineer in Japan, Ben really got inspired by the Japanese way of doing things. The Japanese philosophy of reducing waste and thinking of clever ways to make operations and processes less wasteful made a real impact on the founder of Cirkle. It got him starting to think about a delivery system that would never have empty vans.
In 2008 when he founded the company he funded it by himself. After a while he needed reinvestments to launch a new website, he financed it himself. It’s not until 18 months ago that Cirkle got its first outside investment for the first time.
Cirkle can be best described as a customer friendly grocery delivering company where every process is setup in a certain way so that it benefits the community. The automated system makes it really easy for customers to buy their groceries. It’s a company that tries to give back to the community at every step of the logistic process.
Mission
At Cirkle they believe people want to eat healthy and help society, and they make it easy.
Cirkle takes a holistic approach to sustainability and social value - they have looked at all areas of the business
And came up with innovative ways to do things differently in the spirit of the circular economy.
Vision
They have a plan to scale up around Belgium over the next 3-4 years. The first step for them is to increase the customer base in our existing areas, which is mainly Brussels. And step by step to spread out to other cities in Belgium.
Values
Recycling, Waste reduction and integrity
Business Model
What Cirkle have done is taken a business model and made it better. Companies where using it in the UK at the time and it wasn’t necessarily new in Belgium at the time. But nobody was doing it online in a very customer friendly way. So Cirkle took the model that was used in the UK and added the dimension of recycling to it.
So the basic model is that they sell food to their customers, who buy online. They choose a day of delivery, Cirkle delivers the products to them. At the time of delivery they give the orders in a box, which is a reusable box. And so what the customers do is they fill this box up with their recycling. And then the next week when they have a delivery they give Cirkle their waste. And Cirkle gives them a new box of food.
Some of the waste goes directly to charities, like the books and the toys. They give it straight to Oxfam or another charity. Some of the other things need to be recycled first. Like cooking oil, or printing cartridges. They go to a recycling company who give them money for these items and the money they receive then goes to the charities. It’s a completely free service for the customers. Obviously there is a cost involved. Cirkle absorbs all the costs, because they think that they should give this service for free.
Cirkle has a couple USP’s that can attract new customers. Their main USP is the recycling concept. But it doesn’t stop there. With their automated ordering system they make it effortless for customers to make frequent orders. Customers can order any product with any frequency they want. If you want apples delivered at your door every 2 weeks, milk every 3 weeks and beef every 4 weeks it’s al possible by the click of a button. Even the payment can be automated.
Cirkle sets different margins for different products. The highest margins come from fruits and vegetables, while the lowest margins come from products they sell from local shops. They earn a commission for those products. The margins are quite low but it does help to attract new customers to their website.
Ben didn’t have a lot of help at the beginning. He did get a lot of feedback from professors and fellow students when he was doing his MBA. And his accountant did help him to get in touch with the right people.
Because it was an unusual business model Cirkle did get some resistance at the start. Particularly when it comes to the bureaucracy of it all. He especially encountered some hiccups when tried to do business in Wallonie.
Growth
According to Ben the company did an S-curve at the beginning and hit a plateau a few years ago. The number of new customers was equal to the amount of customers leaving. Then they got some investment and they’re back in a growth phase. This year they had 20% more sales than last year.
Customers
The typical profile of customers is mainly families that have small children. Quite high earners because the products aren’t that cheap but of high quality. People who don’t have the time to go shopping themselves, because they’re working full-time.
A lot of people didn’t necessarily start buying their products because of their recycling concept but when they realized what Cirkle was doing they really liked it. And they got used to it fairly quickly.
Competitors
There is a lot of competition of companies selling food. . But in terms of home delivery of groceries there is not that much competition. In Belgium the grocery home delivery market isn’t that well developed. The supermarkets have not really embraced it yet. There are a few smaller independent companies doing it but not a lot.
The reason why is because it’s a very labour-intensive process and in Belgium the cost of labour is very expensive. Direct competitors are mainly click and collect companies or other food delivery companies. Indirect competitors are Bioshops like Bioplanet and actually all companies that sell food.
Conclusion
The future does pose a few threats for Cirkle. For example, the Bio trend. Nowadays everything needs to be bio and organic. This trend has been around for a couple of years now, but there is always a possibility that this trend will change to a different direction. Other threats are huge companies starting with grocery home deliveries. Amazon is doing it in the UK, what if they come to Belgium?
But where there are threats, there is also opportunity. The grocery home delivery market is still in its startingphase. If Cirkle can position itself as a reliable and known grocery delivery company when the market starts to grow they could take advantage of the situation.
The main thing that Ben has learned from the model he uses is that it’s not hard to sell his concept because everyone is benefiting and the customers are indirectly helping the community. They feel part of the process.
What Ben learned when he started this company was that you definitely need enough money to get started. It’s always more then you think. It’s also important to get the right investors who will support you along the way. Also don’t employ people unless it’s absolutely needed!
He also came across some obstacles in the beginning. The main one was building a customer base. Getting orders. And when it started to grow it became clear that getting the operation to work well logistically would also be an issue.
Ben’s current goal is to scale his business up to 50% more sales in the next 2 years and to start delivering to new cities.
Posted on 25/03/2016