Meal delivery start-up Munchery earns money on every order in every city, says CEO

Key Points
  • Munchery CEO James Beriker says Munchery is "contribution margin profitable" on every order.
  • Munchery has faced a difficult year, including layoffs and the resignation of its founders in January, but the company says it's positioned for profit in the next year.
Source: Munchery

Food delivery service Munchery is making money on every delivery on every city, CEO James Beriker told CNBC.

"All our markets are contribution margin positive," Beriker said. "That means we make money on everything we make."

Munchery creates prepared meals in its centralized kitchens, then delivers them to customers. The start-up, which has raised more than $125 million from investors, has had some struggles in the last year.

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In November 2016, a Bloomberg report said that the company wasted an average of 16 percent of the food that entered its San Francisco kitchen -- higher than typical restaurant rates -- and in January the company laid off 30 workers and parted ways with founders Conrad Chu and Tri Tran.

Beriker differentiated Munchery from pure delivery services like GrubHub, or meal kit companies like Blue Apron, which require customers to cook meals from delivered ingredients.

"We make and deliver all natural/organic prepared meals to our customers. It is a model that lends itself to profitability at scale -- and we expect to be there as a company by early to mid next year."

On Wednesday, Blue Apron reduced the price of its IPO as investors expect fierce competition from 's acquisition of Whole Foods.

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