Australia, NSW
Australian CSF Offer
Foods
Reasons to Invest
In the last year we’ve reached some outstanding milestones;
- In November, we opened our 286th Hub, in Spring Farm, south-western Sydney. We now operate more Hubs in NSW/ACT than there are Coles stores (266) and Aldi stores (215) all in under 6 years of operations compared to the two industry giants who have been operating since the 1960s and 2001 (respectively).
- In October 2024, we broke through $600k in weekly sales and retained this figure since. We generated over $20M in revenue in FY24 and our Year-on-Year sales growth has been between 40% and 60% every week since June 2024.
- Also in October, the % of successful Splits hit 92% - up from 82% in previous months. This is an important measure of how much members’ needs are being met. When we first started in 2019/20, this number was closer to 50%.
- In the last year, we’ve grown membership by 32%, and added 10 new pantry suppliers, 2 new chilled suppliers and 3 new local farmers.
- Over the past 4 months, we have collected from just 6 trial Hubs over 7000L of soft plastics for recycling through RecycleSmart. Once we roll this out to all 286 Hubs, we anticipate that we will keep 150,000L of soft plastics out of landfill.
- Our sales & marketing spend is less than 0.5% of sales. The bulk of our advertisement comes from word-of-mouth recommendations and organic growth
- We moved from a 1200 sqm warehouse to a 3500 sqm warehouse within a week without dropping a ball or missing an order.
Our Story
Back in 2015, Co-Founders Jayne, Anton and Richard were dabbling with food co-ops – but they were too custom, too expensive, not easily scalable.
In 2017, we were invited to join the Western Sydney Diabetes Alliance – part of NSW Health. They liked our ability to set up food Hubs in areas with poor access to affordable fresh food and they set us a challenge - Can we make it scalable and cheaper?
So we redesigned the model. Focussed around box sharing, with lower prices, fresher produce, shorter lead times and 80% less packaging. We called it Box Divvy.
We launched with 3 Hubs in early 2019. Fast forward to today, and we’re operating 286 Hubs from Canberra to Coffs Harbour, with over 13,000 members.
We’re opening 1-2 new Hubs a week with two out of three Hubs near full capacity, with an average membership size of 40-45. We started with fruit, veg, eggs, bread, nuts and beans – and an average basket size of $35.
Today, we sell about 900 products across fruit, vegetables, bakery, dry groceries, meat, seafood and dairy with an average basket size around $75.
The best part? Our model works. Our business is good for the people and the planet, and it’s profitable too! Generating $20M in FY24 and we’re growing at a rate of 50% Year on Year.
And this is just the beginning…
Our Mission & Objectives
Box Divvy’s mission is to change the food system. To make it fairer for all: farmers, small producers, and consumers.
Purpose:
To improve our members’ health by making good-quality fresh food more accessible and affordable, with less impact on our planet - and thus provide a healthier and cheaper alternative to supermarkets.
Vision:
To become Australia’s most loved, trusted and sustainable supplier of fresh food.
Mission:
To create, nurture and grow our low-cost food distribution system that allows us to pay farmers more and charge members less.
The Problem In The Industry
Supermarkets in Australia are suffering from a trust deficiency, and it's making shoppers reconsider their choices. We believe that Box Divvy is an idea whose time has come.
The past 18 months have shown how concentrated and uncompetitive the Australian grocery market really is. The supermarket duopoly has been in the dock at several inquiries and found wanting. Coles and Woolworths have gone from being the most trusted brands in Australia to the least trusted brands and they only have themselves to blame.
In addition to uncompetitive pricing, misleading promotions, illusionary discounts and shrinkflation, we would like to add something that has had little attention but in many ways has had even more negative impact.
Supermarkets have always wanted us to know they are the curators of healthy foods. Turns out, not quite…
According to the George Institute for Global Health, more than half of all packaged food items on Australian supermarket shelves are classed as ‘discretionary’ or junk foods: they’ll give you a burst of energy, but little by way of nutrition. More than two-thirds of what is called off-location display – end of aisle or gondolas – are used to promote sugary drinks, snack foods, cookies, biscuits and other junk food. Why? They are the only categories to have shown increased consumption rates when on promotion, and snack food manufacturers are willing to pay big money for these displays. Moreover, the discounts on unhealthy foods are far greater than the discounts typically offered for fresh or healthy foods.
Australian supermarkets no longer have your health at heart.
So there you have it: whilst we’re all shopping in supermarkets, turns out they’re not that great for your wallet, your health and our planet. When you think about it, their business model was invented 100 years ago, and perhaps they are no longer fit for purpose in the 21st century.
The Box Divvy Solution
Come on the journey with us and unsupermarket!
We connect your local community with farmers and food producers to provide market-fresh, locally and Australian-grown, seasonal fruit, vegetables and groceries helping you cook and eat better for less.
Alot of people claim to support local farmers, but we’re actually putting our money where our mouth is. We’re working with between 30 and 40 Sydney-basin growers at any given time, with about a dozen who supply us each week. All up, they represent 50-60% of our fresh produce purchases – more than any other retailer we know. A lot of fruit and some vegetables are simply not grown in Sydney, so we rely on wholesalers on the Sydney Markets for things like pineapples and beans.
- We offer sustainably low prices, with full transparency and no gimmicks.
- We prioritise healthy, fresh foods from family farms and small family-run and owned producers. i.e. We don’t sell Coca Cola or Tim Tams.
- Box Divvy members have a much lower carbon footprint than the average supermarket shopper due to lower infrastructure and transport emissions, and also all perishable food is pre-ordered by our members meaning there is no leftover food waste. Any waste that does remain is donated to charity.
Box Divvy is a social enterprise: we balance profit with purpose. We believe there is a desire among Australian shoppers for food suppliers that people feel they can trust:
- Full price and supply chain transparency
- Run by a grassroot movement of food warriors in every suburb of Sydney and beyond.
We feel people are ready for a change and now much more likely to consider alternatives to supermarkets compared with five or ten years ago.
Box Divvy is an idea whose time has come and we aim to be the most trusted retail brand in Australia.
Business Model
How does Box Divvy Work?
The Box Divvy model empowers people to run their own micro business, doing good for the community– but without taking risks. We call these community members who manage and organise Box Divvy Hubs ‘Hubster’s.
After we approve their application, and agree on a delivery day and time, we set up their Hub, registration page and Facebook page. The Hubster is responsible for recruiting the initial 12-15 neighbours, friends and family members to get a Hub started. This typically takes 2-4 weeks.
Once activated, the Hub orders as a group – and Box Divvy packs and delivers the produce in bulk. Almost every Hub will grow to between 25 and 50 members within a few months, with an average turnover of $2000-$2500 per week. The average Hubster income is $270 per week, and rising.
Box Divvy pays farmers fairly, yet charges members less. How is this sustainable?
It’s because the bit in the middle – the cost of doing business – is done at a much lower cost than supermarkets and other online food providers:
- We pack Hub orders in bulk, and leave the individual order divvy to the Hubster. As a result, our packing costs are around 8% of sales – one of the lowest ratios in the industry.
- We deliver the Hub orders in bulk: a single 6-pallet truck can deliver 6-8 Hubs with 200-250 orders in a 6-8 hour run. Online supermarkets and other online suppliers take 5 days to deliver 200 orders, which in effect makes our delivery cost 80% lower than other industry participants.
This low-cost advantage enables us to set our pricing approximately 30% lower than the major supermarkets, which in turn fuels our topline growth via new Hub and member growth.
Since moving into our new 3500 sqm warehouse, our efficiency has improved even further: our total wages bill (including contractors and Superannuation) has fallen from 20% a year ago to 18.5% today.
Of the 13,000 members, approximately 8,500 members have an active order in any given week, spending around $75 which results in approximate revenue of over $600k per week! This is growing at a rate of 1% per week (compared with the prior week), or 40-60% versus the same week last year.
The Market
Box Divvy is a direct competitor to the supermarket industry giants Coles, Woolworths and Aldi. In fact, 90% of our members were previous Woolworths, Coles or Aldi shoppers - demonstrating at a consumer level, Australia’s patience with the supermarket duopoly Coles and Woolworths has ended and consumers are pursuing alternative means.
We operate within the NSW Supermarket and Grocery industry, which is estimated to be valued at $41 Billion Australian dollars in 2024 - a huge market, where we anticipate a growing demand as customer satisfaction decreases with the current incumbent competition.
Using Aldi, the most recent market entrant as an example, it has taken 24 years for Aldi to secure a 9% market share of Australia’s Supermarket industry. Comparatively, for Box Divvy to secure 1% market share, we would require approximately 3,000 Hubs.
Whilst a considerable number, in our first 6 years we have launched close to 300, which means we are roughly 10% into our journey!
Securing this 1% market share with 3000 Hubs may appear highly ambitious, however when you consider there are roughly 4700 suburbs in NSW, and often suburbs will have multiple hubs it’s achievable Box Divvy could scale to this level. With 1-2 new Hubs opening each week and more consumers losing patience with Coles and Woolworths we are optimistic for a more sustainable unsupermarket future.
Use of Funds
Over time, we’ve been expanding our product range to include vegetables, wholefoods, fresh meat, seafood and dairy.
Now that we’ve moved into our massive 3,500sqm warehouse with tons of space we’re rolling out a plan to introduce more pantry items to our Box Divvy members! This includes packaged foods, household supplies and health & beauty products.
4 in 10 Box Divvy members don’t buy pantry items, this means that despite using Box Divvy for their weekly shopping, members are still visiting supermarkets to fill the pantry. We’re raising funds to change that.
We estimate we need to add at least 350 new products, and possibly as many as 1200, so that the majority of our members can say: ‘I get everything I need from Box Divvy’.
Funds raised will support us in:
- Market research to Identify which new products to stock,
- Secure sufficient produce to supply our growing number of Hubs and Hubsters,
- Invest in operational equipment such as shelving units, storage racks and resources to support the sustained growth of Box Divvy.
Join us in our fight to change the food system
When you become a shareholder in Box Divvy, you’ll have a real stake in the food system you want to see. One that supports farmers, reduces waste, and makes healthy, local food affordable.
We invite you to join us in our fight to change the food system.
Investing in Box Divvy
This investment opportunity is solely for Box Divvy NSW/ACT and does not include shareholdings in any future Box Divvy subsidiaries that may arise from rollouts to other states. Investments in these future subsidiaries will be handled separately.
Additionally, this is a Private Raise, open only to Hubsters, Box Divvy members, staff and suppliers.
Key Risks
Funding.
The Company is in the process of raising funds to achieve its strategic business objectives and cover its projected operating expenses associated with growing the company. The Company may not raise all of the required funding and therefore may not achieve all of its business objectives. Depending on the success of the Offer, the Company may also need to raise additional funds in the future from investors or third parties. There is no assurance that the Company will be able to obtain additional rounds of funding on substantially the same terms as outlined in this Offer Document or at all. The Company’s value may be materially affected if the required additional funding is not available.
Dilution.
A shareholder’s interest in the Company could be diluted if the Company raises further capital via share issuance and existing shareholders do not participate in future fundraising.
Returns are not Guaranteed.
There is no guarantee of any income distribution or capital return on the shares in the Company nor is there a guarantee of repayment of capital amounts. Shareholders will not be entitled to any guaranteed distributions of profits or capital. There is no guarantee that distributions will be at a certain level or that there will be distributions at all.
Dividends.
Any future determination as to the payment of dividends by the Company will be at the discretion of the Directors and will depend on the financial condition of the Company, future capital requirements and general business, and other factors considered relevant by the Directors. No assurance in relation to the payment of dividends or franking credits attaching to dividends can be given by the Company.
Competition Risk.
The Company operates in a competitive market, with several known competitors. There are however moderate barriers to entry that could give rise to new and unknown competitors. If the Company is unable to successfully compete with existing and/or new competitors, this would have a negative impact on the revenue, profitability, and future prospects of the business.
Unforeseen Expenditure Risks.
Expenditure may need to be incurred that has not been taken into account in the preparation of this Offer Document. Although the Company is not aware of any such additional expenditure requirements, if such expenditure is subsequently incurred, this may adversely affect the expenditure proposals of the Company.
Supply Risk.
Dependence on suppliers, produce and resources may lead to vulnerabilities in Box Divvy’s supply chain. This may result in supply shortages and delays.
Regulatory & Compliance Risks.
Variability in local regulations may result in operational delays, increased costs, or challenges in the deployment and operation of hubs. To date, wherever these have been encountered Box Divvy has been able to achieve a successful outcome and to date has not been forced to close any Hub.
About Swarmer
Swarmer is an Australian equity crowdfunding platform connecting businesses and investors. Designed to support start-ups, growth companies and scale-ups we allow everyday investors to own a share in businesses that are the future. We hold Australian Financial Services License (AFS License #507867).
Find out more about becoming a shareholder via Equity Crowdfunding through Swarmer.