By AURI
Ryan Rosenthal and Mike von Fange can attest to the fact that being an entrepreneur isn’t easy, nor is it for the faint of heart. The duo demonstrates the agility necessary to stay in business when challenges arise. Rosenthal and von Fange began pondering the idea of starting their own food business back in 2013.
“We were rooming together at the time and mutually frustrated with the lack of convenient and delicious food options that met the values we sought of local, clean, organic and sustainable,” Rosenthal recalls. “We started researching the market opportunity thinking that many other people probably shared this same problem and the original concept for Simpls was born. We were able to miraculously secure a bank loan and off we went.”
Rosenthal says Simpls opened their first store location in September 2014 in the downtown Minneapolis skyway system. They produced scratch-made soups that were convenient for people working in a bustling downtown. Rosenthal describes Simpls’ business model as what would result if 7-Eleven and Whole Foods had a baby.
“Small footprint convenience stores with the food values you expect from Whole Foods. We operated a commissary kitchen that supplied the stores with fresh food daily, with the idea that the stores could be smaller without a kitchen at each location and the product more consistent,” Rosenthal says. “We grew to three store locations in Minneapolis by the spring of 2020.”
ALONG CAME COVID
Simpls grew into a lively business with three Minneapolis locations and as many as 28 employees. It seemed Rosenthal and von Fange worked their business model to perfection. Then the COVID-19 pandemic emerged and changed everything.
“All of our store locations were in areas that were almost entirely dependent on commuter traffic, so that shut off overnight as work went remote for safety,” Rosenthal explains. “We had no choice but to close the locations.”
The closings were supposed to be temporary, but the move turned out to be permanent. Closing stores was difficult enough, but it was even harder cutting staff.
“For the next two weeks we went through a brutal struggle of laying off all of our staff and liquidating as much inventory as possible. It was an extraordinarily difficult time,” Rosenthal says.
Not ready to give up, the duo wasted little time reinventing themselves. Instead of operating storefronts, Simpls repackaged their inventory into a frozen product they could sell to their customer base at their homes.
A NEW WORLD
COVID-19 caused seismic shifts in many U.S. industries. This was especially true for the food and restaurant sectors. An AURI analysis, pandemic-driven restrictions forced restaurants to adopt pick-up and delivery options often backed by e-commerce platforms, and to improve their online presence to stay visible and relevant to consumers. Also, according to data from IBM’s U.S. Retail Index, the pandemic accelerated the shift away from physical stores to digital shopping by roughly five years.
“Shifts in consumer needs brought about by uncontrollable external forces can significantly impact the current value proposition of a brand or food business,” says Jason Robinson, AURI food business development director. “In the case of Simpls, nobody was commuting to work for over a year, so a person-to-person sales model would not work.” Robinson learned of Simpls at the start of the COVID-19 pandemic restrictions from a mutual friend who wanted to make sure that the company had access to the help they needed to pivot their business model. At the time, Simpls was exploring several different options. Robinson helped them assess the technical feasibility of those various concepts.
“From a business development point of view, simply having a sympathetic and savvy ear to bounce and evaluate ideas can save a business like Simpls significant time in the long run, by quickly discarding ideas that definitely won’t work and honing in on those that might,” Robinson explains. “The owners have settled on their current business model and have demonstrated enough success to have faith in what they are doing, to the point that we were able to open a project with them focused on compiling nutrition label information across their entire range of soups.”
“Prior to Covid, Simpls was selling its soups to consumers to eat on-site at their retail locations, so no nutrition facts were required,” explains AURI Senior Food Scientist Lolly Occhino. “After Covid, they shifted to an e-commerce model where packaged soups were sent out to consumers and nutrition labels were expected.” AURI worked to develop nutrition facts and standardize recipes for Simpls’ 16 flavors of soup, ranging from Thai Lemongrass Chicken to Cajun Gumbo.
“Simpls proved their resiliency when Covid hit,” Occhino says. “They pivoted to an e-commerce model which allowed them to stay in business. They are now considering expanding their line with frozen pizzas and are also planning to move into wholesale sales.” Rosenthal says AURI’s assistance was very valuable to Simpls as they charted their new business course
“AURI has been an outstanding resource for us as a small business,” Rosenthal says. “We were evaluating kitchen and co-manufacturing last winter and were provided with a wealth of information and contacts to explore during our decision-making process. That helped us navigate the right path for us. For a small business, having that level of support at an affordable rate is just huge. We hope to continue working with AURI as we scale up, and we think that there will be great value in connecting with other innovators in the food and ag sector through AURI.”
FORWARD FOCUSED
Rosenthal says Simpls’ primary product remains scratch-made frozen soup. The soups were what Simpls was best known for in their stores, and the soups translate well to frozen delivery. Customers have responded well to the new business model. “We had a fantastic winter of growth in 2020 and early 2021,” Rosenthal explains. “Customers have been very receptive to having goods delivered to them at home and I think acceptance of that was clearly accelerated by the pandemic. We still have not rebuilt to the sales levels we had pre-pandemic, but we believe by the end of 2022 our new business will be much larger than it would have been in its previous version.”
Simpls will soon launch a second frozen product, which will be naturally leavened, handmade frozen pizzas. They’ve also been working with AURI to incorporate Kernza®, a perennial wheatgrass, that is a relative of wheat, into their recipes.
“Knowing the Simpls mission also focused on supporting regenerative agriculture, we were able to fold in awareness of an emerging climate-positive perennial grain cropping system in the early stages of commercialization in Minnesota,” Robinson states. “Kernza grain is harvested from intermediate wheatgrass, the commercialization of which has been a focus area for AURI since 2019.”
“From our perspective, it’s an incredible grain with so much potential in sustainable farming and we want to be a part of getting into the marketplace to help create demand,” Rosenthal says. “We will soon launch a summer soup with Kernza as the base grain. AURI has been a great resource to connect us to suppliers and to learn more about the current state of the supply chain for Kernza. It’s clear they are playing a crucial role of connecting supply and demand.”
COMMUNITY GOOD
More than just providing healthy meal options, social responsibility has been a Simpls focus since its formation. For each quart of frozen soup purchased, Simpls donates a bowl of soup to health care workers or people in need.
“It’s always been important to Mike and me that our work is contributing positively to people and the planet and that we use our business as a force for good. That has only risen in importance for us on our journey. We think it’s vitally important to be a part of addressing the biggest issues we face in our community as it relates to food; food insecurity, equitable access to healthy foods, climate change and food system sustainability and resiliency,” Rosenthal explains. “We want to be a community partner that creates winwin solutions, and in the long run, solving these issues will create a healthier market and thus better opportunity for businesses to thrive.”
Rosenthal and von Fange have weathered many of the challenges presented by COVID disruptions and have emerged with a different approach then they’d originally intended. Their store closures were supposed to be temporary, however they soon recognized that focusing on commuter traffic was unsustainable and remote work was likely to substantially change how business gets done. Simpls shift to e-commerce and home delivery has changed their process, but not their purpose.
“The new vision for our company is to create adventurous farm to fork frozen foods ordered online and cheerfully delivered to your door. Ultimately, we are solving the same problem we set out to solve in 2013, but now centered on convenience at home rather than out and about,” Rosenthal says. “Amazingly, after a very brutal year of dramatic change, we now feel more optimistic about where we’re headed, and the opportunity ahead than we did before the pandemic. For that, we are very grateful.”
To learn more about Simpls products and mission, visit simpls.com.
