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Saturday, Jul 13, 2024

From Burger Biz to Baby Biz

RETAIL: Former Jack in the Box Execs Pivot to Baby Product Online Store

SAN DIEGO – It may seem like an unlikely career pivot, but two former Jack in the Box executives have taken their corporate experience and are operating a startup online store specializing in baby shower and toddler gifts.

HoneyBug already has taken in $6.5 million in sales since launching in 2019 and is considering its first fundraiser to accelerate its trajectory within the next few years.

Jennifer Kennedy

CEO Jennifer Kennedy and Chief Operating Officer Rachel Webb said the lessons they learned in the quick-service restaurant industry that they applied to their new business included giving customer choices, focusing on items people wanted most, and even packaging.

Part of the career shift came along with a natural life change. As a mother of a 6- and 8-year-old, Kennedy noticed that her social activities began to change after becoming a parent.

Rachel Webb
Chief Operating Officer

“Before I had kids, I spent all my time going to bridal showers and brunches and hanging out with my friends,” she said. “And then once I had kids, all of a sudden, you’re spending time at kid birthday parties and baby showers.”

As senior vice president and the chief product and innovation officer at Jack in the Box, Kennedy had a demanding job that often left little time for personal errands such as gift shopping.

“I found myself often in a Target parking lot on the way to a bridal shower or a baby shower, throwing stuff together,” she said. “There is this desire that you want to show somebody that you care about them and that you thought about them by putting together this really thoughtful gift, but I wasn’t doing it. I was kind of just flinging something together.”

Moments like those gave Kennedy an epiphany that there had to be a better way.

The HoneyBug online store provided the solution. A user visiting the site can choose from among thousands of products from about 500 vendors across the country. While consumers could hunt down those products online themselves, HoneyBug allows them to curate them into personalized gift baskets.

About 100 items are shipped to customers each day, with half going out from the HoneyBug warehouse in Carmel Mountain and the others shipping directly from vendors.

The founders of HoneyBug have brought lessons from corporate America into their small business. Photo courtesy HoneyBug

The Right Packaging

“At Jack, I had really kind of made my mark with packaging, and we knew that having something that’s a beautiful piece of packaging with a really nice unboxing experience is something that everybody really enjoys,” Kennedy said, referring to the Jack in the Box Munchie Meal.

“It was a very cool box that people really gravitated towards,” she said, describing the boxes as filled with “late night indulgences” that people might pick up at the end of a night out.

“Rachel and I always laugh at that,” she said. “The idea was pretty easy and the marketing side of that all came together very easily. Then we hit the ground running. We had our million-dollar run rate in just a few months.”

Webb, who led analytics and investor relations at Jack in the Box, also said there were lessons learned from her previous career.

“We used to say, if you could just shave off like 1% of the market share from McDonald’s, for example, you can have a multi-million-dollar business,” she said. “So we kind of took that same approach with HoneyBug. If people are getting gifts from Target and Nordstrom and Amazon, how can we shave off just a little bit to make a sustainable business model that really appeals to the customer’s needs?”

Consumer Choices

Webb said HoneyBug is able to do more targeted online marketing to potential customers than large retailers, which can help shave off some of big players’ market share.

Kennedy said HoneyBug also is considering launching its first fundraiser and is in discussions with potential investors. A $1.5 million fundraising round could get the company to $25 million in lifetime sales within three years, and a longer-term vision is to grow the company to the point of going public.

In another lesson from Jack in the Box, Webb said it is important to give consumers choices, even if they stick to favorites. As an example, people appreciate seeing salads on restaurant’s menu, although they still mostly ordered hamburgers.

Likewise, HoneyBug has expanded its product line to include gifts for toddlers, but about 60% of sales are still the company’s original baby shower gift boxes, she said.

“If you lose sight of what the customer wants, you don’t have a business,” Kennedy said.

“And so, for us, we really started to focus on what the customer wants.

“When they bring something to a baby shower or birthday, they want to show that there was some thought in it,” she continued. “So we really leaned into the emotional state of this thing. And it’s nice to see that we tapped into something that was so real.”

CEO: Jennifer Kennedy
HEADQUARTERS: San Diego, Carmel Mountain
BUSINESS: Retailer for baby and toddler gifts
CO-FOUNDERS: Jennifer Kennedy, Rachel Webb
WEBSITE: https://www.shophoneybug.com/
REVENUE: $6.5 million in lifetime sales.
CONTACT: 888-271-5284
NOTABLE: HoneyBug was co-founded by executives from Jack in the Box.


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