Wonder CMO on How Partnerships With Walmart to Chef Bobby Flay Are Key to Growth for the Digital Food Hall

Why it matters:

• Sixty-six percent of consumers said they are more likely to order takeout food from a restaurant than they were before the pandemic, according to research from the National Restaurant Association.
• Food disruptor Wonder, founded by serial entrepreneur Marc Lore, leans into the takeout boom with a twist: Its high-profile chef partners like Marcus Samuelsson and Jose Andres, whose meals are offered in a kind of digitally enabled ‘fast fine’ food hall, are incentivized with equity stakes in the startup, which encourages them to support the success of the brand.
• Investors have supported Wonder to the tune of $1.5 billion, including a $700 million round earlier this year, giving the company plenty of runway to test and iterate its consumer appeal and business model as it ramps up expansion.

Wonder has brought to the restaurant industry a new kind of ordering and dining experience that combines the culinary diversity of a modern food hall with convenient, user-friendly takeout and delivery.

The company was founded in 2018 by Chairman and CEO Marc Lore, the high-profile serial entrepreneur whose previous e-commerce companies include Diapers.com, which he later sold to Amazon, and grocery site Jet.com, which Walmart purchased. (Diapers.com and Jet.com have since shuttered.) He also oversaw Walmart’s e-commerce operations from 2016 to 2021 after the retailer acquired Jet and folded it into Walmart.com.

At Wonder, Lore and his team are seeking to disrupt traditional restaurant dining by partnering with acclaimed chefs and restaurateurs including Marcus Samuelsson, José Andrés, Bobby Flay, Michael Symon, Nancy Silverton, and others. Wonder users can create blended orders from the various dining concepts to satisfy the preferences of everyone in the group — maybe a steak for dad, tacos for mom, pizza for the kids, and a couple of salads and desserts to share.

“Our mission is to make great food more accessible,” said Daniel Shlossman, Chief Marketing and Growth Officer of Wonder, in an interview with CO—. “We have done a lot of research and development on the culinary side and on the technology side, and that lets us do that in a very different way than every other restaurant or food delivery concept that’s out there.”

Wonder capitalizes on foodie culture and the sticky post-pandemic takeout boom

Consumers became much more comfortable with restaurant pickup and delivery during the pandemic. Two-thirds (66%) of consumers said they are more likely to order takeout food from a restaurant than they were before the pandemic, and 55% said the same about delivery, according to the 2023 State of the Industry report from the National Restaurant Association. In addition, 55% of adults surveyed said takeout/delivery is essential to the way they live, and these modes of order fulfillment are especially important to younger consumers, many of whom have embraced foodie culture, particularly Gen Z.

“Operators are launching new business models within the industry, re-engineering current concepts, and allocating more space to off-premises business in order to satisfy customers,” said Hudson Riehle, Senior VP of Research for the National Restaurant Association, in a statement.

Wonder’s chef and restaurant partnerships not only enable the company to offer on-trend dishes like Samuelsson’s fried chicken and waffles with maple chili sauce and Flay’s salmon with hazelnut-cherry butter, but they also bolster Wonder’s marketing capabilities by allowing the company to associate the chefs’ names with its products. In addition, Wonder generates publicity from the chef partnerships with special events that the chefs help promote.

Wonder’s chef partners are compensated with up-front payments and equity in the company, Shlossman explained, so that they are incentivized to encourage the success of Wonder as a whole.

[Read: Chef Marcus Samuelsson on Entrepreneurship and the Future of the Restaurant Industry]

Expanding into meal kits with the acquisition of Blue Apron

Last year, Wonder expanded its food offerings beyond restaurant concepts with the $103 million acquisition of Blue Apron, the subscription-based meal-kit delivery service that had been struggling to drive profitability amid high customer acquisition and retention costs. Wonder has since begun adding Blue Apron’s meal kits, which include partially prepared ingredients and recipes, to its menu of offerings.

In addition to its culinary partnerships, Wonder has also created its own restaurant menus that it deploys alongside the offerings affiliated with the chefs’ creations. The company operates a research and development facility in New Jersey where it creates and tests menu items and production processes.

“It all comes back to the food,” said Shlossman. “If the food isn't great, none of this is going to really matter.”

Wonder has invested considerable effort to develop systems that help it coordinate kitchen production so that all of the dishes for the same order are ready at about the same time for pickup by customers or delivery drivers. The company now offers its technological and menu know-how to other high-volume foodservice operators through its WonderWorks division.

The fact that the company first started out as a food truck-style concept helped Wonder focus on kitchen efficiency early on, Shlossman said.

After the mobile kitchen concept test, last year the company changed gears and began opening brick-and-mortar locations. It quickly grew to 12 outposts in New York City and the surrounding area, and it plans to add another 23 locations this year and another 55 next year, with a goal of reaching 90 locations by year-end 2025.

[Read: Walmart.com’s Marc Lore on When to Take the Risk, Even Without a Safety Net]

Bringing ‘fast fine’ dining to Walmart: ‘It's an exciting opportunity for us to scale the model to fit into additional communities’

Wonder has also begun working with Walmart to test a smaller version of its multi-restaurant concept inside a handful of the retailer’s stores in Pennsylvania and New Jersey. The first such location opened earlier this year in Quakertown, Pennsylvania, and at least two more are planned in Ledgewood and Teterboro, N.J.

The Walmart locations leverage the same principle of offering multiple restaurant menus in the square footage that might otherwise house only a single location, but in an even smaller space, Shlossman said.

“It's an exciting opportunity for us to scale the model — in this case downwards — to fit into additional communities, in different ways,” he said.

At the Quakertown Walmart, Wonder launched with eight proprietary restaurant menus offered from a single, scaled-down kitchen in a 1,400-square-foot space: Limesalt (Mexican), Yasas by Michael Symon (Mediterranean), Alanza Pizza, Tejas Barbecue, Wing Trip, Burger Baby, Fred’s Meat & Bread (sandwiches), and Room for Dessert. These eight concepts operate in a footprint where a typical Walmart might host a McDonald’s or Subway restaurant.

Customers can order online through the Wonder mobile app or website, or via kiosk in the store. The digitally focused ordering component and “fast fine” (versus fast food or fast casual) positioning of the foodservice concepts jibe with Walmart’s own recent efforts to expand its digital presence and broaden its appeal among higher-income shoppers.

Other multi-restaurant kitchens have struggled at retail, including the Kitchen United Mix and ClusterTruck concepts that were tested inside Kroger stores and have since been shuttered.

Investors appear to have faith that Lore can lead Wonder to success, however, whether that might be inside Walmart or other retail stores, through its rapidly expanding fleet of stand-alone locations, or through other auxiliary offerings such as WonderWorks. Earlier this year the company raised $700 million from investors, bringing its total funding raised to $1.5 billion. That total includes $100 million from food giant Nestlé, which reportedly is working with Wonder on ingredient and product development.

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