Our question should reflect Sprig's change in status, as Sprig conducted its last day of business on Friday, May 26, 2017. According to reports in Tech Crunch and PYMNTS and to the final message sent by Sprig CEO, Gagan Biyani, Sprig faced at least four management dilemmas:
- The difficulties of managing the entire food-on-demand operation, from sourcing to cooking to delivering.
- The challenge of providing gourmet, "sustainable and ethical" food on demand (according to CEO Gagan Biyani).
- The difficulty of finding an operational model successfully adaptable to expansion in other cities.
- The challenge of balancing an expansion of services, such as adding a brick-and-mortar walk-in and contracting delivery through a third-party provider.
Here is an illustration of two of Sprig's dilemmas: Sprig had expanded the San Fransisco flagship operational model for gourmet on-demand food delivery to the Chicago market, but the venture failed. Sprig Chicago instituted a pause in operations, with a lay-off of employees, in July of 2016.
In order to expand its customer base while cutting operating costs, Sprig San Fransisco opened a shop on Van Ness Avenue. The hoped-for relief from reported monthly six-figure losses and the boost from the double-sided market for freshly prepared gourmet food did not materialize.
In the same vein, in order to cut operating costs, Sprig opted to contract delivery services through Caviar, a firmly established provider of food delivery for restaurants, with locations in major cities spanning from the West Coast to the East Coast. Benefits from this strategic partnership were not significant enough to keep Sprig above ground and growing.
A portion of Gagan Biyani's final email (Tech Crunch): "No question, I’m sad that the Sprig model did not work out — but the food delivery space on the whole is growing. The demand for Sprig’s convenient, high-quality food was always incredibly high, but the complexity of owning meal production through delivery at scale was a challenge . . . Food is one of the foundations of society and I believe strongly that it must become more sustainable and ethical."