This Silicon Valley startup delivers artisan bread in a way that's profitable — and affordable for customers and vendors

If you get a craving for fresh-baked bread on a Saturday morning, you could change out of your pajamas into real clothes and drive to your nearest bakery.

Or you could stay in your pj's and have fresh artisan bread delivered straight to your door from one of the Bay Area's premier vendors.

Fresh bread is just one of the items on offer from Locale, a Los Gatos startup that operates a specialty foods delivery service. Among other things, the company, which makes deliveries to much of the Bay Area as well as to Santa Cruz, offers baked goods from Los Gatos' Manresa Bread, fresh apples from local farmers market staple Prevedelli Farms, pizza and pasta dishes from Bay Area chain Pizzeria Delfina, and gumbo from San Francisco-based Brenda's French Soul Food.

Jonathan Friedland and Christopher Clark launched Locale last year after moving back to their hometown of Los Gatos from San Francisco during the Covid-19 pandemic. After visiting Manresa Bread, Friedland and Clark wondered why they couldn't order its artisan loaves or muffins through the popular food delivery apps.

They realized that the economics wouldn't work for either Manresa Bread or its customers. Given the way the food delivery services typically work, customers would have to pay a big delivery fee even for a single muffin, and the bakery would have to offer the delivery service a significant cut of the price it charged for the muffin.

Friedland and Clark figured they could make things more economical for consumers and for businesses like Manresa Bread by offering a different model, one built around bundling items from multiple vendors and delivering them all at once, just one day a week.

Thanks to the way Locale has designed its service, "Manresa Bread can now deliver their products all the way up to San Francisco, Friedland said. He continued: "It's reaching a completely new customer base."

Locale has teamed up with an assortment of restaurants, farms, bakeries, creameries, butcheries and the like from around the Bay Area. Customers can choose items from different vendors and pay for them altogether. The company makes its deliveries on Saturdays; it requires customers to place orders by the preceding Thursday.

Locale offers fresh food

The startup picks up the ordered goods on Friday nights or Saturday mornings, and then bundles customers' orders together. With its standard service, for which it charges a flat $5 delivery fee, it drops off orders between 9:30 a.m. and 2 p.m. For customers who want a narrower delivery window, it charges $3 extra.

The company buys products from vendors at their wholesale price, then charges a markup to customers.

In September, Locale made $250,000 in revenue, and its sales have been increasing 20 to 30% month-over-month, Friedland said. The startup makes about a 7% profit on each order but isn't yet profitable overall as a company, he said.

Although it's in the food delivery business, Locale isn't a competitor to DoorDash or Uber Eats, because it doesn't offer on-demand delivery, Friedland said. Instead, its rivals are specialty grocery stores like Lunardi's, which also offers a delivery service, he said.

The variety of products available on Locale and the ability to pre-order them benefits both its customers and its vendor partners, Friedland said. Vendors appreciate its promise to, in many cases, deliver their products on the same day it picks them up, because that helps maintain the quality of their products, he said.

"The thing they care about the most is their brand and their product image," Friedland said.

The company took part in Y Combinator's accelerator program this summer and earned a $125,000 investment from firm. In total, it's raised $500,000 in pre-seed funding, including money Friedland and Clark got from family and friends.

Locale's "sweet spot," is a ten percent saturation rate of any market, meaning that the company would deliver to ten percent of the area's households, Friedland said. It's already hit that target in Los Gatos, but it's service is still nascent in other areas, he said. In Santa Cruz, Locale has about a 2% to 3% saturation rate, he said. In San Jose, it's about 1%.

Friedland sees big things ahead for his company.

"We really think that we can be in any major urban area that has a food hub and that has suburbs," he said.