Read time: 5 minutes

Good morning! It's Thursday, October 19th. Today, we are looking at FarmboxRX, a fresh grocery delivery service that’s found a way to partner with Medicare and Medicaid providers to generate $75M this year!

THE FEATURE

FarmboxRX: Getting Insurers to Pay for Healthy Food

We all know that the food we eat impacts our health, but the medical industry and insurance companies have largely overlooked this key factor.

Ashley Tyrner and her company FarmboxRX are looking to change that through shipments of healthy foods and recipes to Medicare and Medicaid recipients.

FarmboxRX is on track to generate $75M in revenue this year without costing its 2.7M food box recipients a dime!

So, What’s the Business?

The idea behind FarmboxRX came from a time of struggle for Ashley Tyrner. 13 years ago, Tyrner was newly single, pregnant, and living off of food stamps. To make matters worse, she was living in a "food desert" (region(s) of the United States that lack fresh and healthy foods).

This personal struggle drove her to create FarmboxRX in 2014, a company that pioneers food as medicine and seeks to eliminate food deserts throughout the nation.

FarmboxRX began as a direct-to-consumer subscription service that delivered fresh fruits and vegetables from organic farms. The company partnered with Midwest and East Coast warehouses to ship farm boxes across the continental US, but it only generated $1M in revenue in the first 5 years.

Tyrner found the perfect opportunity to redirect her company in 2019 when she heard that the Centers for Medicare & Medicaid Services would allow produce to be offered to Medicare Advantage and Medicaid beneficiaries.

She contacted countless insurance providers in the hopes of partnering with them and, after many failed attempts, finally secured a deal with Vibra Health.

FarmboxRX's pitch to insurance companies is simple: if you pay for FarmboxRX shipments, you will lower costs on Medicaid and Medicare enrollees with chronic conditions like diabetes, hypertension, and cardiovascular disease.

While that pitch didn't win over Medicaid and Medicare providers in 2019, they are now scrambling to partner with FarmboxRX since it's proven its thesis with Vibra Health. The company is currently partnered with 87 health plans, including four of the top national insurers.

How They Win

When private companies want to get in on government programs, teaming up with key opinion leaders can go a long way.

As Tyrner pitched her company to Medicaid and Medicare providers, she met Sam Kass, the former executive director of Michelle Obama's Let's Move program.

With his help, FarmboxRX was approved for a government pilot program allowing SNAP recipients to use their EBT cards to purchase groceries online.

FarmboxRX became the only online grocer permitted to accept food stamps digitally and, as a result, absolutely cornered the market.

Key Observations

Ashley Tyrner's success can teach us two important entrepreneurial lessons.

1. Stagnating companies must identify opportunities to redirect and shift their business models to better meet market demand. In doing so, you can still keep true to your founding mission (FarmboxRX provides far more fresh food to consumers now than when they were a direct-to-consumer business).

2. When those opportunities do arise, it's critical to act fast to acquire a first-mover advantage. There are dozens of companies attempting to replicate what FarmboxRX has done, but Tyrner has already swept up the top insurers.

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