Goodfood Market serves up fast growth with Dynamics 365 as key ingredient

It’s a classic story: Three entrepreneurs start a company from an apartment in Montreal, Quebec, to make their lives easier—and that of their friends and family. But it’s not that often that the company then gathers more than CAD100 million in quarterly revenues just seven years later.

“We started as a meal kit operation with six, seven recipes a week and people coming to the website for their weekly subscription of meals,” says cofounder Neil Cuggy, President and Chief Operating Officer of Goodfood Market. “But we quickly realized that our customers wanted a lot more of their food needs met by us.”

Today, Goodfood customers can go online to shop for a meal kit, a meal, a snack, or over 1,000 grocery products for their daily food needs. "It could be a prepared meal to reheat, or something that’s frozen," says Cuggy. “Simplifying the experience with great-tasting and well-priced meal solutions is at the core of what we do.”

Goodfood built a vertically integrated supply chain with manufacturing facilities across Canada to support its fast growth.

Goodfood prepares for a sudden increase in demand

Demand for Goodfood products saw even more of an upswing in March 2020 when COVID-19 hit Canada. Week-over-week demand increased by up to 50 percent. The company proudly served those looking for a safe way to secure food for their households, but the immense popularity of its delivery services put huge demands on its distribution and manufacturing centers.

But Goodfood was well prepared for the spike in demand for grocery deliveries. It had already invested in putting the right systems in place. Pre-pandemic, Goodfood deployed Microsoft Dynamics 365 with the help of Microsoft Partner Network member, Alithya. The inbound supply chain management team uses the solution for demand planning and warehousing tasks, such as inventory control and ensuring adequate stock levels across the country. Dynamics 365 is an agile solution that can handle complexity, scale as the company grows, and provide intelligence to optimize operations.

“Having Dynamics 365 inbound inventory management and advanced warehousing capabilities saved us during the pandemic,” says Cuggy. “We couldn’t have done as much volume and maintained the high level of accuracy and fill rates that we did.”

As a company that is growing by leaps and bounds, Goodfood learned the importance of putting in place solutions that can grow with the company.

“One of the mistakes we made in the past was thinking about what systems we needed at the time, instead of what we’d need in the future. So this time around, we didn’t want to invest in a system that would bring us to $200 million, but one that could scale into the billions of dollars,” Cuggy explains. “I asked everybody: Is your solution going to break at $500 million? At a billion? At 5,000 employees or at 20,000? We chose Dynamics 365 because we can scale as much as we need to; there are no breaking points that will hold us back.”

With the support of Dynamics 365, Goodfood almost doubled its topline performance, and many of the underlying metrics exceed those numbers. The average order value went up more than 20 percent year-over-year and twice as many orders contained groceries in addition to meal kits.

Microsoft 365 helps a maturing organization

Accelerated growth also required ramping up staffing levels—over the course of a year, the company doubled its workforce to more than 4,000 employees, many of which worked remotely. Goodfood relied on Microsoft 365 and Microsoft Teams to enable real-time collaboration.

“Microsoft 365 is a world-class suite that people are familiar and comfortable with. It streamlines communication. For example, we get huge value from cross-collaborating in real time on online Excel worksheets," says Cuggy. “Everyone at our company loves Microsoft 365 apps, including millennials. Our employees are always asking for more Microsoft products and features.”

The move to Microsoft 365 reflects the company's work culture as it grows from a startup to a more mature organization.

"We’re adding more structure, while making sure that we leave room for innovation and trying different things,” says Cuggy. “At the same time, making things as easy and frictionless as possible is one of our core principles. We like working with companies, like Microsoft, that take the same approach and pay close attention to the user experience and interface."

Keeping up momentum

The number of people interested in convenient food delivery grew dramatically when people were required to stay at home, but Cuggy thinks that growth will not be a flash in the pan. "When you don’t have to go to the grocery store, it frees up many hours each week that you can spend with your family or on other activities," he says. "Going out to shop for food could be just a pleasure and not a necessity."

Goodfood uses Dynamics 365 to better serve this booming market. "We’ve streamlined our inbound receiving, communication with suppliers, and inventory count process, and we're moving toward automation end to end, from order to delivery and from procurement to payment. With Dynamics 365, we move people from performing repetitive tasks to dealing with only the exceptions. That means that our employees can focus on value-added tasks like sourcing new farms and artisanal producers that are key to the offering.”

The company will use Dynamics 365 for outbound supply chain management and wants to take advantage of automation and IoT devices to boost productivity and enable preventative maintenance.

“With Microsoft continuing to invest heavily in the functionality and capabilities of its solutions, there’s no reason to plug in other layers on top,” says Cuggy. “We look forward to turning on all the Dynamics 365 features and modules, which will help us be faster, more customer centric, and more profitable.”

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