Munchery closes on-demand meal-delivery business

Jose Garcia, center, tosses a half-peeled potato at the Munchery kitchen in 2016. The meal-delivery company told customers Monday it was shutting down. Jose Garcia, center, tosses a half-peeled potato at the Munchery kitchen in 2016. The meal-delivery company told customers Monday it was shutting down. Photo: Stephen Lam / Special To The Chronicle 2016 Photo: Stephen Lam / Special To The Chronicle 2016 Image 1 of / 14 Caption Close Munchery closes on-demand meal-delivery business 1 / 14 Back to Gallery

San Francisco startup Munchery, which delivers microwavable dinners and meal kits in its hometown and other Western cities, has gone out of business, according to an email the company sent customers on Monday.

“Today, with a heavy heart, we’re reaching out to announce that Munchery is closing its doors and ending operations effective immediately,” the company wrote. “Any outstanding orders with Munchery will be canceled and refunded.”

Munchery was among a crop of on-demand food-delivery services that tried to do it all: make chef-prepared meals in their own kitchens, handle delivery and create their own brand names. But they couldn’t match the economics of companies like UberEats, DoorDash and Postmates offering deliveries from existing restaurants that already had kitchens, chefs and brand awareness.

Munchery’s gleaming kitchens in South San Francisco, Los Angeles, Seattle and New York reportedly produced many more orders than they sold, resulting in massive food waste. In November 2016, James Beriker, a former Yahoo executive, replaced co-founder Tri Tran as CEO. Tran left the following year.

In May, the company ended food delivery in Seattle, Los Angeles and New York and cut about 30 percent of its staff, planning to focus on San Francisco, its largest market. It had 350 employees in the Bay Area after that layoff.

It continued to ship meal kits to a broader area. As of Monday, the Munchery website showed about 40 cities, including ones in California, Washington, Colorado, Arizona, Utah and Nevada, where consumers could order dishes like steak with cauliflower gratin, apricot glazed pork chop, and salmon with golden beet relish.

In the meal-kit business, Munchery also faced well-funded competitors like Blue Apron. The New York company went public in 2017, but its shares have since fallen more than 80 percent, closing Friday at $1.40. Amazon, which owns Whole Foods, and several large grocery chains now sell their own meal kits.

San Francisco’s Sprig, which also created its own kitchen for chef-produced meals, shut down in 2017 after going through $57 million in funding. Meal-kit delivery service Spoonrocket closed in 2016 after consuming $13.5 million in funding.

But Munchery burned through even more money. Founded in 2011, it had raised $125.4 million, according to Crunchbase. Menlo Ventures and Sherpa Capital were among its venture capital backers.

Carolyn Said is a San Francisco Chronicle staff writer. Email: csaid@sfchronicle.com Twitter: @csaid