Sun Basket on Building Employee Culture at a Startup

A unicorn startup valued at $508 million that took the struggling meal kit industry by storm, Sun Basket is still learning how to build its internal culture beyond coining cutesy acronyms.

Founded just five years ago, the company’s current employee culture manifesto sounds a lot like the value system in a kindergarten classroom at a progressive charter school: ‘DINES,’ which stands for Diversity, Integrity, Nurture, Excellence and Sunshine, outlined on a wildly colorful poster that hangs on the wall.

“It’s going to be more than a poster on the wall but it’s a process and a journey and we’re on it,” Kevin Peterson, head of people operations at Sun Basket, said at the CCW Executive Exchange in Miami, an invitation-only event for senior executives.

Sun Basket offers 10 customizable meal plans for various health objectives, be it managing diabetes, hypertension and high cholesterol or following diets like Paleo or gluten-free.

The startup is conducting an ongoing pilot program with a major insurance company to see if it would make sense to have insurers partially reimburse healthy meals as a deductible based on the notion that eating a clean diet prevents chronic illness.

However, analysts have been taking bets on the longevity of the meal kit industry, whose complicated business model combining perishable goods with logistics makes it difficult to manage costs and inventory.

Sun Basket’s main competitor, Blue Apron, reported a 25 percent drop in revenue last year, while the shuttering of LA-based Chef’d, which reported healthy sales at grocery stores, has led to speculation over which meal kit company will fizzle next.

While HelloFresh leads the industry with a 33 percent market share, Sun Basket has been quietly expanding. The company just opened a third distribution center in Westhampton, New Jersey, thereby attaining a footprint that could allow it to reach “98 percent of zip codes” in the country.

Building employee culture at a startup

In order to retain its roughly 200,000 customers, Sun Basket has been working extensively on developing its employee culture. Startups are faced with the dual task of establishing their own brand identity while also determining what type of organizational culture they want to embody. Ideally, these two things are closely intertwined.

A number of employee reviews on Indeed.com featured complaints from former hourly workers that many staffers don’t speak English, which creates internal problems. However, SunBasket is still committed to a diverse workforce.  

“Diversity is very important to us as an organization and we try to integrate that through our recruitment practices and promotions, that sort of thing,” said Peterson. At the new distribution center in Westhampton, employees speak over eight different languages, he noted.

“That makes it challenging but it’s also an opportunity to meet people where they are and celebrate those differences.”

Why it’s important for HR and customer support to share values

At SunBasket, the people operations and customer support teams work closely together in a “partnership” where the internal employee culture is designed around the external culture the company wishes to project to its customers. Also on hand at the CCW Executive Exchange was Brett Frazer, Sun Basket’s head of customer service.

“Ultimately as an organization around food, our goal is to enable our customers to shine - shine on the inside, shine on the outside,” Frazer said. “And that really comes down to ensuring we provide something that meets their needs for delicious food, personalized health and ease.”

Peterson and Frazer referred to their respective departments as separate organizations, but emphasize the importance of working together to treat employees as customers and in turn empower them to deliver top-notch service.

“We’re a service organization, we don’t make any money for the company,” Peterson said of the people operations division. “Maybe sometimes we help the company not lose money by making bad employment decisions, but ultimately we’re a service organization so we have to support the people who are providing a service to our customers.”

Sun Basket doesn’t have a dedicated sales team, so customer support reps are the only point of contact for customers. The company recently increased its employee discount to make sure more workers get to experience having the product delivered to their homes.

“It’s important to make sure employees are engaging with the product as our customers do,” said Peterson. “It just creates a different level of experience if you’re getting it at home and preparing the meal, you’ll have feedback that you wouldn’t have if it was just this abstract thing.”