Why Thrive Market's Co-Founder Sees AI-Powered, Personalized Health As The Future

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0:51Hello, friends. I'm Ray Lateef, and you're tuned into Taste Radio, the leading podcast for entrepreneurs, makers, and innovators in the food and beverage industry. Eight years after his first appearance on Taste Radio, Nick Green, the co-founder and CEO of pioneering online grocer Thrive Market, returns with a striking message. The future of healthy living will be shaped less by trend chasing and more by trust, technology, and simplicity. In this episode, Nick explains how Thrive is navigating a fast-changing wellness landscape defined by AI, GLP-1 drugs, non-alcoholic beverages, and rising consumer skepticism, while staying focused on its core mission of making healthy living more accessible and affordable.

1:46He also shares how Thrive evaluates brands, why taste still trumps everything, and why he increasingly sees the company not just as an online grocery store, but as a personalized health platform for modern consumers.

2:04Hey folks, it's Ray with Taste Radio. Right now, I'm supremely honored to be sitting down with Nick Green, who's the co-founder and CEO of Thrive Market. Nick, it's great to see you. Great to see you too. Thanks for having me. Second time on the podcast. First time was in 2018. It's 2026. Not much has changed in the last eight years. Just a little bit. Just a tiny, tiny, tiny bit. Of course, I speak in jest. I didn't get to meet you the first time we had you on the show. How have you changed personally in these last eight years? I mean, it's been quite a journey for you. Well, I mean, personally, I turned 40 last year.

2:37Congratulations. 40 is the new 20, right? Maybe. I've got four kids, so sometimes 40 feels like the new 50. Four kids. God bless you. Yeah. No, it's been a ride. We last year celebrated our 10th year in business at Thrive Market. The last time I was on the pod, 2018, we were three years out of the gate. So I think just getting our sea legs in a lot of ways. Since then, a lot of e-commerce players have come and gone. I think we knew it was a challenging category when we got into it. I think the last eight years have borne that out, and then some. Of course, you have the pandemic, which transformed our industry, e-commerce, and how we see ourselves and our mission.

3:16And yeah, we're still thriving. So it's been a ride, but we're feeling good. Is that a tagline, we're still thriving? You know, I hate to use it because usually people ask that question to me like, are you thriving? And I preempted it this time. Well, we're here at Natural Products Expo West, which was canceled in 2020 and 2021 as a result of the pandemic. I think today, five years after that last show was canceled, I sense that the industry is changing in ways that have nothing to do with a pandemic, which is ironic. I think because people thought everything was going to change back then. But when you think about the current administration, federal administration, that is, how RFK Jr.

3:56is running Health and Human Services, the rise of GLP-1 drugs, the growth in consumer awareness of and experience with Better For You products, it seems like there's this convergence of all three trends that are happening, or at least all three things that are happening right now, that kind of make it very difficult to, forecast how everything plays out. How do you traverse this very uncomfortable, unknowing time for natural products and just wellness in general? Yeah, I mean, first, I think you're right. There's a lot of uncertainty, a lot of volatility. And you have that, you know, politically, geopolitically, economically, technologically with AI.

4:44I think, you know, as an entrepreneur, I'm a little inured to that volatility because, you know, separate from what's going on in the macro, when you're running a business in the early stages, it's a wild ride no matter what. So we experienced that, you know, self-induced in our own business for a long time. Now there's obviously a lot of factors external. And I think the, you know, the key that I found, you know, during the early days of Thrive and that I still think about today in this really, you know, shifting landscape is really focusing on the things that aren't changing or maybe the things that are changing in a consistent way.

5:17And I think the through line for our business and our mission from day one has always been around healthy living, sustainable living, and making healthy living more accessible, more approachable, and more affordable to everyday American families. And that was a problem that we wanted to solve back in 2015. It's still a problem today. We're closer to solving it, but in many ways, we're still very, very early. We have over 1.7 million members, but there's over 100 million households in the U.S. Organic is a lot bigger than it was 10 years ago, but it's still single digit penetration. And yet you can see in movements like Maha, you can see in the swiping of the food pyramid and in the recognition of what's wrong with ultra processed food and the trends towards, you know, yes, there's still a lot of diatribe, but a lot of it's just getting back to basics, like reduce sugar, reduce artificial ingredients, increase good macronutrients, increase protein.

6:11These are, to me, the secular tailwinds for our business, for our industry, and frankly, part of the solution to the health crisis in this country. You look at health outcomes in the US and metabolic dysfunction and food is upstream at some level of just about all of it. And I think that over the last decade, that's becoming increasingly clear. And so, yes, there's a lot of factors that are changing, a lot of kind of shifting sands or what have you, But that through line, that kind of crescendo in interest in health and wellness, desire to get healthier, and even tools and technology to do it, right?

6:46So GLP-1s are now a tool for people to basically be their better selves in that sense, right? It's like addiction and food addiction in particular is less appealing when you're on a GLP-1 than when not. And I think it's giving people that boost. AI has the potential to really enable people to understand their health and have one level in a way that they couldn't before. and agentic shopping is going to change the way people shop and consume. So all of these things to me, you're right, there's a lot of volatility, but there is this convergence. And I think the through line that we're going to see that will continue to impact our industry and continue to be a tailwind for great health and wellness brands and platforms like ours is the desire for people to get healthier.

7:28Healthy living is a cornerstone of your business, more specifically making healthy living accessible and affordable to Americans. you touched on this. A lot of people are confused about what health means, what healthy means. What does it mean to you? What does it mean to Thrive Market? Yeah, so this is a really good question. We spent a lot of time thinking about it because the truth is that different people's health needs, different people's health goals are different. And if you are a parent with a child that has a nut allergy or is lactose intolerant or you have celiac disease, you're in a very different position than someone who is trying to lose weight on a ketogenic diet or just went on a GLP-1.

8:06So, you know, Thrive Market, the way that we try to think about it is kind of in two parts. On the one hand, we want to focus on what are those kind of universal quality standards, those things that should be true no matter what diet you're on, no matter what health goal you have. And so for us, that's around simple, real, you know, whole food ingredients in the food. It is around reducing and eliminating chemicals, artificial fragrances, and additives that aren't necessary. And it is around focusing on macro contribution in a product that is macro contributions in a product that are generally healthy.

8:42So reducing sugar, you know, increasing or decreasing rather glycemic load overall. And so those are things that are just like kind of North Star things for us on health and we think are true no matter what. And then beneath that, we want to give people a lot of choice and a lot of power to find the things that fit their health needs and also discover things that may meet health needs that they didn't know they had. So one of the things that we do with every new member that comes on the site is a pretty detailed questionnaire or intake form that maps their preferences, their health goals, and their health needs for them and their family against those of our entire historical member base and all the purchasing behavior of those members.

9:20What does that enable? It enables us to then recommend products and brands for the individual member or the new member. It also enables us to create shop-by filters for them and essentially personalize the entire experience to that member. And, you know, one of the things I get most excited about in the future is the way we're going to be able to use AI on top of this data set to deliver really, really personalized experiences for every one of our members. So, you know, our quality standards are some of the highest in the industry. we want to continue to be the tip of the spear there, the kind of bleeding edge pushing from non-GMO to organic to regenerative, et cetera.

9:56And across every kind of quality vector, just always pushing the boundary. But then we also want to be able to empower people to find the things that are best for them and then meet their needs and their lifestyle. And that I think is going to be transformed by AI. And for our platform in particular, as a membership business with all the data that we have online, I think we're going to have some really powerful tools at our disposal to make healthy living much easier for members. Online grocery, you touched on this, has been a boon for some companies and not really worked out for others. When you launched Thrive Market, that is, a lot of people, maybe even you guys, described it as a sort of Whole Foods and Costco.

10:37If they had a baby and sold products online, that would be Thrive Market. I don't know if that's still the case, is it? I think the basic idea still is helpful to understand what we do. We are a hyper-curated retailer. That's a little different than Whole Foods. Whole Foods had, even in their heyday, 40 ,000 SKUs were 7 ,000 SKUs. So order of magnitude fewer items, which we think in the context of trying to find healthier products, you don't want an everything store. You really want to know what are the best products and start with that again, that high bar, ultra-curated approach. So in that sense, I think we're different than Whole Foods.

11:15I think over the last 10 years, or I guess seven or eight years since Whole Foods was bought by Amazon, they've also really changed, right? They described kind of their Amazonification has been pretty well documented. And I think that makes sense for the way that Amazon is using them. But it's also opened up an opportunity for us to really step in and I think in some ways take the baton from what Whole Foods did. And I'm a great admirer of the way that business was run for many decades and the way that they were able to bring the natural organic movement mainstream and be kind of a touchstone for quality standards.

11:45And I like to think that we're helping to kind of carry that torch on and even raise the quality standards further. So I think in one sense, when you say we're Whole Foods meets Costco online, that very telegraphically gives people a sense of Thrive Market. On the other hand, I think it really has changed. I will say Costco continues to be a touchstone for our business in many ways, just starting with membership. There have been a lot of online retailers that have come and gone. None of them have been membership models. And I do believe that one of the clear differentiating and defensible advantages that we've had has been leaning into membership.

12:19Membership is a forcing function to deliver long-term value to your customers. Membership front loads your cash flow and so really gives you a CapEx advantage on customer acquisition. and membership has also powered our mission. Every paid membership sponsors one for a low-income family and it's really created a community where people are paying, they are investing in their health and they feel like they're part of a platform that's doing the same. So I'm proud to be inspired by both of those companies and I think they continue to inspire us and then I would say over the last decade, we've really created our own flavor that is now very unique and I think the differentiation of our assortment I think is, and the focus on health is very different than Costco.

13:02And the way that we have now, I think, taken the baton on quality standards is very different than what Whole Foods is today. How has membership impacted your curation strategy? Yeah, I'd say that, I mean, the first thing that helps us to curate the assortment is our data. And being online, we can not only see what people are buying, but we can see what they're buying over and over again, very clearly. We can also see what they're looking for and unable to find. and you know the ability to mine that data and especially now with ai mine it like with just sort of incredible depth is very very powerful powerful for us in deciding which bets to make on which brands which products and which trends membership intersects in a pretty interesting way which is that our members self-select because they care about healthy living like if you're going to invest 60 a year it's not a huge investment but it's enough to make you think do I want to commit to a healthier lifestyle over the next year?

13:52And that commitment helps drive engagement, which is very good for our business. But it also kind of curates the customer base, right? It's a barrier to entry in a way. And so those members come in, and we call them wellness champions, right? They're focused on healthy living. And I think for brands, that gives brands an opportunity to access these people that are on, you know, kind of the vanguard of getting healthy. And one thing that's been really interesting and was always something we had believed would be the case, but early investors and folks in the industry are very skeptical of, is that these wellness champions are not just wealthy people in LA and New York and San Francisco, like it's middle-class middle Americans.

14:31And I think one of the things that's really cool about this movement today, and you see this in Maha as well, is it transcends geography, right? It transcends politics, right? There's like, you know, yuppie people in San Francisco that eat crappy food. And there's moms in Louisiana that are like hardcore on organic. And, you know, that's really kind of wonderful that food can be something that transcends. And I think what we want to do is make it accessible to anybody. And so, you know, our member base is 50 % Midwest and Southeast, you know, almost half have a household income under$100 ,000.

15:04And that gives us a lot of confidence that one, we're advancing the mission to make healthy living works. And two, that we have a really big opportunity, right? Like, yes, it's a big opportunity to serve wealthy people in affluent areas. But the really big opportunity is if you can serve, you know, middle class, middle America, where there's, you know, tens of millions of households. Ever feel like your inventory's running the show? Belay Financial helps you take back control so you can see profits clearly and grow with confidence. Text TASTE to 55123 for your free inventory playbook download.

15:42Cold brew is booming and functional RTDs are leading the charge. Download From Formulation to Final Sip, a free guide from Vibrant Ingredients and BevNet, where you'll learn how to build scalable, flavor-forward cold brew beverages with protein, L-theanine, and clean caffeine. Grab your copy now at tasteradio.com slash cold brew. There's a lot of private label that you do on Thrive Market. I received a box a couple weeks back, and most of it, I think 90 % of it, was private label. When you think about curating your assortment, How much is on the private label side versus the branded side? First, I'm very excited that you bought 90 % private label.

16:27That puts you in definitely the upper decile of the private label consumers. You know, overall, it's closer to 20 % to 25 % of our sales is coming from private label. You know, we are not the retailer that puts their thumb on the scale and wants to drive private label penetration up just to capture margin. We also philosophically approach, we call it own brand. We don't call it private label. So we approach own brand very differently in that we are looking to basically raise quality standards and fill gaps wherever we can. And again, the data is really important here. If you're a traditional brick-and-mortar retailer, all you can see is what's selling.

17:01And then basically the private label program is like you copy what's selling. For us, we can see what's not selling, like what people are looking for and they can't find. What are the quality standards that they want that they're not having? So we use reviews. We use empty search results to go find gaps in the assortment. And the unique thing about that is sort of twofold. On the member side, it means that we're actually delivering incremental value. We're not just having them trade from, you know, a third-party brand to our brand. And then the unique thing for the brand side is that we're not cannibalizing their sales.

17:30And, you know, that's not absolutely true, but it's definitely much more true at Thrive Market than I think it is with a traditional retailer. And what we've started to do more recently also is partner with our brands as co-manufacturers. And in many cases, do co-branded partnerships with them. So, you know, we consider ourselves a stakeholder-driven business. And to me, what that means is, you know, there's like Amazon is customer obsessed. We are obsessed with our members, but we're also obsessed with our brand partners. We're also obsessed with our co-packing partners. We're also obsessed with our, you know, our environmental stakeholders, our sustainability commitments.

18:04And I think as a responsible entrepreneur, and part of what in my mind is real social entrepreneurship and mission-driven entrepreneurship, is not just thinking about shareholders or not just thinking about customers, but trying to balance those considerations. And I think part of what we're trying to prove is that, you know, if you serve your brand ecosystem well, while also building a great private ale program, while also you can actually do that. And in fact, that is a better way to serve shareholders than trying to, you know, directly just build shareholder value. Or, you know, the Amazon approach, which is also very effective, just maniacally delivering customer value.

18:43We think the stakeholder model is an alternative, and we think we're proving that that mission approach can work. Delivering value can sometimes mean delivering different products on a pretty regular basis. I mean, Trader Joe's is known for that, where people go in there and want to find a new peanut butter, a new macaroni and cheese. They want to find something at least once a week. And you see that in specialty grocers like Erewhon. Erewhon's always cycling through their beverage aisle. You know, with Thrive, I wonder, at least I would assume that velocity, like any retailer, is the most important quality of a brand, or at least the most important reason that you would continue to carry your brand.

19:26But how do you balance velocity and differentiation? Well, I think they go hand in hand. You know, to your point, like our members, I think similar to a Trader Joe's customer, look to Thrive Market for innovation. Again, you go back to those people that have self-selected to join a healthy living membership. They want to find new products. They want to find new brands. They care about values more than they maybe care about a brand name or familiarity. And really, crucially, they trust our platform. And that's so critical today. I mentioned this before, but every brand is making health claims. And I think that so many of them are inauthentic.

20:01And I think people have become, they're inundated by algorithmic content on social media. They're inundated by marketing messages at the grocery store. People have become, I think, a little a nerd to that. And I think a lot of people are rightfully very skeptical consumers. And so what we view our ability to do is to earn the trust of our members so that we can introduce innovative products that will be high velocity as a result. And one of the things that's most exciting for me as a founder of this business is to see when we're able to basically accelerate the journey of a great brand that's really early and that probably wouldn't get a chance to grow at the rate that they are on Thrive at a conventional retailer.

20:45And often what they end up doing is they can parlay their success on Thrive Market into traditional retail. And that's fine. And then what we do is we play a different role at different stages in the life cycle. So early on, we're the place that launches the brand, drives high growth across their big SKUs. And then once they start to get wider distribution, we're the place they launch new innovation. We're the place they're going to partner with to do a special SKU or a special case pack. And that's really fun for us to be with brands that in some cases now we've been with for close to a decade or more and seeing the arc of their life cycle from zero to 100 million plus.

21:24We've been dancing around this question of, well, what really excites Thrive Market from a brand perspective? You've touched on a number of brand attributes that could be a right fit or that could be really attractive for Thrive Market. But just in terms of that first meeting, what are you looking for from a founder, from a brand that gives you confidence that what they're selling is right for Thrive Market? Yeah, I mean, there's kind of the formal criteria, which come down to our quality standards. So we have a never ingredients list that's over 500 long. It's literally the most extensive in the industry that I know of.

22:03And so that's a starting point. And the reality is, you know, for every brand that gets on Thrive Market, there's 100 plus that don't get on. What are some ingredients that folks might not expect to see on your never list? I mean, allulose is one that I can't think of because, you know, Whole Foods doesn't allow allulose products or products made with allulose in their stores. Yeah, we've taken a stand on some of the sugar alcohols. We've also taken a stand and well before this became a, you know, hot button issue with the Maha movement. And so that's one where like, you know, honestly, it's debatable though, right?

22:35Like there's people that have a strong opinion in support of GMOs for other reasons. And arguably, it's not the right thing to use GMO as a proxy for glyphosate resistance, but that's basically what we do. So that would be an example of one that we take in a hardline stance. And for example, there's products that are chicken products that if they're consuming GMO feed, we don't carry them on Thrive Market. And that's caused the staff to reject brands that we would otherwise have been excited about. Now, there are also times where we do change our quality standards. Either we step it up because new evidence emerges, or we pull back because we realize, you know, hey, maybe we were like throwing baby out with bathwater.

23:15So it's not that we think that we are beyond criticism by any means. So we welcome a debate on these things. But we have very high quality standards. But I would say once you clear the quality bar, the number one thing that I look for in brands and that we look for on the platform is authenticity. And again, this goes back to trust and it goes back to, you know, what over time brands that have an authentic reason for existing that are doing something, you know, ironically, like we use all this data, but a brand that is cynically just pursuing what they think is the next hot trend, they're not going to succeed, right?

23:51As a platform, what we want to look for is who is the brand that is pursuing the right trend but doing it for the right reasons? Because that's the brand that's going to make the effort in the supply chain to do it right. That's the brand that's going to have the compelling story. And as I said before, I think consumers are becoming wiser and wiser. Their bullshit detectors are stronger than ever. And so, yeah, I think the brands that we've seen that really crush it usually have an entrepreneur behind them or entrepreneurs behind them who are really authentically in it for the mission. I'm glad you said all that because I'm going to pick a brand that's on the Thrive Market platform that I first met at one of our Nosh Live events and then subsequently saw here at Expo West a year ago.

24:32That brand is J-O-O-N, which is a brand of shell-on pistachios. you see their branding, you see their package design, and you just want to pick it up and look at it. You taste the product and you think, oh my gosh, very high quality. Their flavorings are tremendous. There's just something about June that feels like it has the whole package, but it's a brand in a commodity space. It's not inexpensive for sure. And I think it might be for a certain set of consumers, but not necessarily for a broad set of consumers. I think the reality is if you are in a category that is more commoditized, like, you know, Shell on pistachios, that differentiation is very hard.

25:18And so I think a lot of brands are doing that with, you know, flavor profiles, with kind of unique kind of formulation innovations. I think it's really hard to do it just based on supply chain innovations and quality, but some brands have managed to do it. And what we do try to do is if we can find brands that have a product that's typically been commoditized, but they're doing it in a really up-leveled way, we try to tell those stories. We try to get them credit for what they've done well. Often, unfortunately, I think people want... It's like a yes-and kind of thing. Consumers want to know that you're doing things right, that you have an ethical supply chain, that there's a great story behind the brand, but they also want it to taste good, and they also want it to be unique.