What CEOs Can Learn From How AI is Reshaping the Grocery Industry

Speaker A: Welcome to the CEO Project podcast where Jim Schlixer, author of the best selling book Great CEOs Are Lazy and the founder of the CEO Project, provides ideas and tools to help CEOs of mid to large sized companies grow and optimize their businesses. Now let's get started with the show. Welcome everybody to the CEO Project podcast. My name is Jim Schlixer, I am your host. You know, we don't think that much about the grocery store and innovation that occur in the grocery store, but my guest today does. Uh, he's a serial entrepreneur and has a lot of views about growing businesses and engaging people and particularly working right now in the grocery space. So. Andy Ellwood is the founder of Stretch, a new AI platform reimagining how families navigate the grocery aisle. A serial entrepreneur behind companies acquired by Facebook and Google, Andy's built everything from global learning communities to purpose driven tech startups. His philosophy, make room for many, which we will be digging into, guides his work as he uses technology to create more access, clarity and opportunity for everyday consumers. Andy, welcome.

Speaker B: Thanks so much for having me.

Speaker A: I appreciate it. So like, wow, that's a little bit of a niche. Tell me about what you're doing in the grocery space.

Speaker B: I'm a new dad and Congratulations. Thank you.

Speaker A: So you're not, you're not. So you're not sleeping. Got it.

Speaker B: No. You know, I'm building a startup and I'm a new dad. I wasn't going to sleep anyway, so might as well utilize every hour that I'm, I'm awake to be building something and to be taking care of something. I joke that this is my, my founding father stage. I'm a founder during the day and a father during the evenings and early mornings. And in buying new things, lots and lots of new things, I realized I don't know how much things cost, especially when I'm buying lots of things all together, especially when I'm buying essentials and everyday things. And I'm so used to, in every other thing that I purchase, having some source of truth, some way of understanding what my options are. So if I'm um, you know, I would never buy a flight home to see my family in Texas without going to kayak or Expedia and looking to see what my options are toggling between, which, you know, which, uh, schedule I could go on, which airline I could go on, which airport, uh, I could fly out of, but for groceries, I just walk into one of the five grocery stores that's, you know, in my neighborhood and hope that they're charging me the best price for my entire list of goods. And so I said why is there not a source of truth for groceries? And said it seems like a basic thing that should exist in this world and it didn't. And anytime you talk to a founder that sees, uh, you know, sees uh, uh, a nail and they've got a hammer, they're going to swing. And so uh, we've been really, really excited about the response that we've gotten from the thousands of uh, families that we've already started serv, uh, uh, but the, it's just the beginning. And with grocery prices being up over 30% since the pandemic, it's affecting more people than it ever has. And so we feel like the timing for this solution is, is perfectly placed.

Speaker A: So how do you, how do you do that? How do you create transparency around, you know, these items? I mean, I mean, let me just say, doesn't Amazon do that?

Speaker B: Yeah. So what we're trying to do is show source of truth across all of your options. So not just one store. So if you download a retailer app or you go to a retailer website, they're going to tell you their price but they'll never tell you that the store block away has a better deal on the same products. And so creating a source of truth within Stretch. Free download, uh, available in both the app stores. Right now you upload your grocery list. 90% of people shop with a grocery list of some kind, uh, you know, text from your spouse, Apple Notes or maybe even piece of paper on the side of your fridge. Mhm. And Stretch turns it into a digital shopping list and shops it at every local store and says if you were to go to Kroger, it'd be this much. If you're going to stop at shop, it'd be this much. If you went to Whole Foods, it'd be this much. If you went on eventually online for Instacart, it'd be this much. It lets the let's the shopper choose which store is best for them this week. Sometimes it's a store that's closest and the store that you might have been planning to go to anyway, but other times it's like, hey, you know what? For if you drive three miles further, you could say 50 bucks on this week's grocery list because the items that you have are on sale at that store and not this store. And so being able to all of the dynamic pricing that's happening right now, uh, uh, is good for the retailers and not Great for the shopper. Yeah, right.

Speaker A: No doubt. And are they doing dynamic pricing even in grocery stores?

Speaker B: Absolutely. There is surge pricing on bread. Certain times a day, certain days a week, it costs more. And for me, it just really makes me angry that that is what we're gamifying, feeding our families, and it's to maximize profits and unfortunately, that the shopper is on the wrong end of that bargain.

Speaker A: Yeah, well, I could see them doing when like a hurricane's coming. Right, because, you know, all the water and all the milk and all the bread is going out the door.

Speaker B: Absolutely, absolutely. That, that totally makes sense. Right, but, but you know, for everyday shoppers, when families are struggling more than they ever have just seem, just seems wrong. And we wanted to be able to shed light on it and use technology to make the, the idea of, of, uh, accessibility and agency around. Like, I may, I may choose the store that costs more, but I know it costs $10 more or $20 more. And that's a, that's a trade off I'm willing to make this week. But when we talk to shoppers, they're like, I. I have no idea how much it cost at that store or this store or the store. I'm just in a rut going to here. And with prices being where they are, everybody's looking for a better solution. And technology is fortunately opening up that door for us.

Speaker A: You know, I wonder, you know, they talk about picking your grocery store based on convenience, like as whatever is close. And so I wonder how much savings I'd have to m. Make for me to choose to drive to some other place. Right. Break my pattern and drive to some other place where I don't know the store, I don't know the layout. I don't. I mean, I wonder, like, what's the, the activation energy, if you will, for me to go. Yeah, break my pattern.

Speaker B: Yeah, yeah, yeah. It's one of the things that in kind of the personalization understanding that we are gathering with our shoppers within the app is we call it proximity pricing preference.

Speaker A: Okay.

Speaker B: Um, how far would you drive to save how much money? And what we're learning is based on time of day and day of week, and, and we can maybe infer how many kids are in the backseat of the car. For some of our shoppers, they're going to make a different choice. So Tuesday at 10:30, kids are at school. Household CEO says, hey, you know what? I've got a little bit extra time. I'll drive the extra 20 minutes to save 100 bucks because it's the big shop of the week and they've got some great deals there. But Thursday at 6:30 on the way home from soccer practice, uh, I don't care how much it costs, I just need to get food on the table for dinner tonight. So just tell me which store has it in inventory. But even just being able to know that choice, uh, is something that we're hearing from the shoppers that have already started to use Stretch, that they're very, very grateful to at least have some bit of information that they can take action on.

Speaker A: Okay, and how do you gather this data? I mean, it sounds like you've got access to inventory and pricing for all these different players. How do you get that? Is it a screen scrape or you have some APIs in or how do you get that data?

Speaker B: Yeah. So the really big revelation, uh, for me and the reason that I decided to jump in and build this was before the pandemic, online prices were not the same as in store prices. There was an online price and there was an in store price. But because of the pandemic and curbside pickup and delivery companies having as much of a growth as they did during all of us being locked down, all the stores had to get down to a zip code level on inventory and pricing. And so they exposed that on their websites. And so we, uh, started off scraping and just grabbing the publicly available information. Uh, but now we're actually in the middle of working with retailers themselves to make sure that not just their list price, but their loyalty price, sales price, promo price and coupon prices are represented in the Stretch app. And that's going to be a huge advantage for those that are early movers. And they're pretty excited about it.

Speaker A: Yeah, but I'm surprised they're willing to do that. The transparency is not to their benefit.

Speaker B: So you would think so. And uh, I think that that was the initial belief for a lot of, a lot of them. But every single time that somebody shops on Stretch, if they, if that retailer is not on the map, that retailer is not in the list. They're not even being considered. And so being able to understand the consideration, uh, they're already exposing those prices to the Ubereats and the Instacarts and the doordashes of the world. And if you do enough work inside of one of those apps, you can gather some of that information and, and put it on your spreadsheet and then compare it yourself. Uh, um, what we're doing is we're just putting all in one place and then actually letting the retailers understand this is why you were not the best choice. It was your product selection, it was your price or it was your distance for every single trip to the grocery store. And that's invaluable information for them that they don't have access to right now.

Speaker A: Got it. Interesting. Well that's cool. So did you found this yourself or do you have uh, venture money behind you or is just you're pulling out of your pocket?

Speaker B: Raised a, raised a small pre seed round uh, uh, to get this off the ground and took 11 months to build the back end because to organize all this information across we're at 30,000 stores already across the U.S. we have 875,000 products in the database. And so to have all of that ready to just do the simple thing of compare um, my list, uh, it feels a little bit like magic. But uh, it was a lot of work and a lot of hours to get to the point where the app can look and feel simple.

Speaker A: Yeah. How much um, AI coding did you do in this process?

Speaker B: We do more every day. Um, you know we, you know if we started uh, with some early, you know, some early uh, testing and uh, but we have been fully red pilled by Claude code and the entire company, uh, you know we, we're building our own harness and and um, incredibly impressed by every single person in the organization has you know an agent that works for them, you know at least one uh, that's you know, running 24 hours a day, seven days a week and, and the speed that we're able to move and is something I've never seen before. It's my fifth, my fifth venture and it's just unreal how fast we've been able to build as much as we have.

Speaker A: I always say that one of the things AI is great at is quality testing of your output product. So there's a creation process and a test process like what's better at finding a misplaced comma period semicolon than AI? It ain't a human, that's for dang sure. Right?

Speaker B: Absolutely, absolutely. Yeah. And it's amazing like I said at every level within the organization, junior, senior, grizzled, uh, old startup veteran to you know, to just out of college, you know, everybody sees it just keeps having these aha moments like we have, we have every single Friday we have AI show and tell and everybody brings a thing that they learned this week and as a result we all just keep getting better and when it's you know, developers talking about what they were doing, you know in code review. And so we're like, oh, what would that look like if it was in, you know, in marketing review? And then, you know, the marketing review is talking about, you know, generation of new content. And then, you know, the product team is like, oh, could we use that for know, the, the prototypes? You know, so it's just, you know, we're all pretty cyclical in, in the way that we share and, and it's, it's created a pretty, pretty amazing culture here at the, at the company. That's great.

Speaker A: I think that's a great idea that, you know, anybody trying to deploy AI into the company is, you know, AI show and tell on a regular basis to share ideas, I think is a great idea. So, you know, we talked earlier about your philosophy. Make room for many help. What is that?

Speaker B: Yeah, so it comes from a quote from Emerson in his essay called Power.

Speaker A: Okay.

Speaker B: And the full quote is there's always room for a man of force, for he makes room for many. And, and it struck me that I've had a lot of privilege in my life and I've had a lot of, you know, I've got a lot of scars for the things that I've tried that worked and, and the things that I tried that didn't work and, but it's, it's put me in a unique position and if I can kind of have big brother energy. Right. I'm the oldest of four, you know, I'm, I try and be the big brother that you wish you would have had, like, you know, help you reach things on the tall top shelf, get you over the fence if you're, you know, in, in a race. And I've wondered like, what would it look like for me to make room for other people to have, have access to things that I've had access to because of blessings, uh, that I've had in my life. And I uh, think about the, the, the movie, the Princess Bride, my favorite movie. And you know, Andre the Giant, you know, at one point he just like they're trying to get through the crowd and he just goes, everybody move. And then the protagonists are able to like run off and save the princess.

Speaker A: Mhm.

Speaker B: Sometimes I just want to, you know, clear the way for others, uh, to be able to do a thing that I've already had the chance to do. And so that's kind of how I think about for many. And it's, you know, I think it's the spirit of abundance. You know, there's so many people that are holding on tight to things and they're not, you know, they're not letting go of things. And I've just found that the more that I open up what I already have, the more I get back in return.

Speaker A: Yep. And I really do think the world breaks down into, you know, scarcity versus abundance thinking. And when you meet somebody who's an abundance thinker, they're just game changing. Like, well, we're not cutting a fixed pie. We can just make a bigger pie. No big deal. Like, and it's just a whole different attitude about life and um, the energy they provide. And so. Yeah, I love that. By the way, my, my niece is. One of her favorite little lines is from Princess Bride is, um, anybody want, uh, Stop it. And I mean it.

Speaker B: Anybody want to. Peanut.

Speaker A: Exactly. Which drives her mother crazy, which is perfect. That's why she does it. Anyway, sorry, you're going on to another point.

Speaker B: No, no, I'm just gonna say, you know, I'm from Texas, and in Texas we were saying that I'd rather have half a watermelon than a whole grape

Speaker A: m. Yep, that's a good line. Yeah, I love that. That's awesome. Um, so you said you're a serial entrepreneur and actually sold some businesses to Facebook and Google. What, what kind of businesses were those? Curious.

Speaker B: Yeah. Yeah. So I, I, you know, came up on the sales side of finance. Um, you know, sold life insurance as my first job out of college and then was privileged enough to be rookie of the year for Northwestern Mutual. Uh, you know, when I was 23, I sold more life insurance in America than any other 23 year old. Which in hindsight is, feels a little bit of a d. Uh success because life insurance is maybe not the most glamorous thing to be selling. But I learned that if you can sell life insurance, you can sell just about anything else.

Speaker A: Yeah.

Speaker B: And was fortunate to be recruited to go sell private jets for Warren Buffett.

Speaker A: Uh, fun Net jets.

Speaker B: Um, so I ran the North Texas sales region for them when I was 26 and you know, a very unique position to be in. I got to see how the other half lived. And they actually, my, you know, my clients were the ones who, who asked me to, you know, or encouraged me to go take some personal risk of my own. And so I joined a startup. Um, right as the App Store was built, was, was, uh, launched. Uh, it was one of the first, uh, first apps to be featured by Steve Jobs on the Apple stage. It's called Goala. And uh, and we ended up being acquired by Facebook because Sean Parker was on our board, and we showed him our pitch deck for series B. He's like, he's like, just talk to Mark. Like so much of what you're saying is what Facebook's going to build with Timeline. And so that ended up, you know, being the first acquisition that I was a part of. So I love. I led partnerships for that team. Nice. Um, all the way through to acquisition. So we required pre ipo Y really have a partnership position at Facebook then, you know, they had ad sales guys and I was, I was like, that's fine, you know, but, uh, I got another offer from another startup that had seen what I'd done with that team, and they said, come do that for us. And it was a small little Israeli startup called Waze. And so, so I joined Ways, opened up the New York office for them, and led partnerships globally until we were acquired by Google. Okay. So, you know, first company gets acquired by Facebook, second company gets acquired by Google. And I think startups are easy. Everyone should do this.

Speaker A: Yeah, everyone should just possibly go wrong.

Speaker B: What could possibly go wrong? So I started a first one as a founder. That one got acquired, you know, after three years. And so I was like, man, three for three. Let's put it all on red. Um, and unfortunately, the one that I put it all on red and spent eight years of my life on is the one that didn't work. Uh, and. But I, you know, again, learned a ton in that process, and I'm super grateful for that. But unfortunately, uh, we were already on shaky ground for a, a myriad of reasons. And then the pandemic happened and there just wasn't any coming back from that. So, uh, took a beat, you know, from, from that company, found time to get married, become a father, and then now I'm building Stretch.

Speaker A: Nice. Well, I don't think you're an entrepreneur unless somewhere in your history there's a big smoking hole in the ground from

Speaker B: one of them that went in.

Speaker A: Right. So that's absolutely. That's a, that's a credibility piece, actually. Um, so is your team virtual or are you physically located near each other? I think you're in New York. You're in Manhattan.

Speaker B: Yep, we are. Yeah. We're in, uh, Union Square. So because of what we're building and because of the speed with which, you know, this is a right now opportunity. Right? This, you know, I just see it just like this is a space that's going to be claimed for the hundred million Americans who are struggling to figure out how to feed their families right now. And I I said, you know, I've done virtual before. I've, you know, I've, uh, been virtual for most of the companies that I've worked with. But this one feels like it's important for a small team powered with AI to be face to face. And it really has made all the difference. So our offices in Union Square were together at least three days a week, um, but have been intentional about hiring in the city. And then we have an offshore team for some of the development work. And then we, uh, and you know, we have a designer as well that's outside. Outside. But, uh, the core team is all in New York and, and I'm really, really grateful because the speed with which we can answer questions and then get back to, you know, letting cl. Um, and then just turn around and be like, look, all right, oh, next. And then it's, it's been a lot of fun and you know, just serving, serving real people with real problems. You know, we, we all shop for groceries and, and I think that that's the part that's been really fun to be building for everyone and not just for a subset of people who can afford to have technology work for them.

Speaker A: Nice little old school, bringing people together in a high tech business. That interesting. So I think that's great. But I think on a collaboration side, there's like some things that are just done better face to face collaboration is one of them. Coach have this whole idea of there's a bunch of C things we do that better face to face coaching and collaboration creating is another one. So, yeah, um, I gotta write an article like that. Like the five Cs of working together kind of thing.

Speaker B: Yeah, yeah, I love it.

Speaker A: Um, that's good. So how has the acceptance been of the offer? It feels like it's, it's a little bit of a. You talk about 100 million people struggling to feed themselves. It feels like a down market offer. How's the acceptance been of this product?

Speaker B: Yeah, so before we launched, you know, when we were just making sure that we were pointing in the right direction, we talked to over a thousand shoppers last summer, uh, 47 different states. And the, the thing that we knew for sure was that the, the down market, the, you know, the lower half of the economy was, was this, was they, they were eating up everything that we were tossing out. We're like, hey, if, if we, if you had an app that could do this, they're like, you know, it would give me my Saturday back.

Speaker A: Right?

Speaker B: Like right now I download six apps, I build my shopping list at all six. And then I put them all into a spreadsheet and then I look on the spreadsheet and say, all right, I'm gonna go this store for this and this store for this and this store for this.

Speaker A: Wow.

Speaker B: What if you had one app that did all of that for you? They're like, I would get my entire Saturday back. Wow, okay, we can do that. But the question that stopped me in my tracks was when we said, you know, this is. So this was end of last summer. In the past six months, how has your sh. Grocery shopping behavior changed? The largest delta was from middle class and upper middle class and upper class families. Mhm. Lower class families. They hadn't changed that much because they'd already traded down as much as they possibly could. But because of the way that the grocery industry and the pricing have just continued to rise post pandemic. Mhm. And coming into, you know, 2025, 2026, seeing that it was affecting everyone, 84 of people said that they were worried about being able to afford groceries next month the way that they paid for groceries this month. And that just really kind of showed us the, the lens. And I think that when we think about who we're building this for, there's certain people who have more money than time. And Instacart has them on lock. Right. Convenience, convenience, convenience. I don't know how much costs. Just make sure it's there by the time I get home. Then you have, you know, the couponers that will literally go to six stores and they like, they only care about getting the absolute best price because they have more time than they have money.

Speaker A: Right.

Speaker B: But our sweet spot, and we feel the underserved sweet spot is this middle group, which is, I don't have extra time or extra money and I'm constantly making a trade off for which one it is right now.

Speaker A: Right.

Speaker B: I have a little bit of extra time or I feel a little bit. We had a little bit left over. At the end of this month we're going to be able to get those things that we might not splurge on normally. And that's where I kind of go back to that source of truth of, you know, which, which of the trade offs do you want to make and you at least know what, what that option is.

Speaker A: Got it?

Speaker B: Yeah.

Speaker A: I use that example, um, you know, when you first get married and you're not making any money and you got to paint a room, you go get paint and brushes and you go paint the room. Over time you make a bit of money. You go, I'd rather throw money at the problem and make it go away than spend the time. The time is more valuable than the money in that case. So. Yeah, I hear you that there's a layer. And I gotta tell you, like a lot of our clients, our CEO clients, if I said, how much is a pound of chicken cost? They would have no idea. Even if they shop because they just throw it in the cart, they don't look at what it costs because it doesn't matter to them. Uh, it's just about, we want chicken, we're gonna have chicken. Right? So I hear you. There's a group that clearly matters. Um, and, and also some of them being situational. So, so what's the long term for this? Is this, uh, we're going to go get Google to buy this one too? Or Facebook or, uh, or Instacart. Like, is that the long term play for this one?

Speaker B: I swore I would not ever become a founder again unless, unless there are, there are a handful of things that I agreed on with my wife. But the biggest gate that to get through first before I got to the other things, was it had to be a decade long problem.

Speaker A: Okay?

Speaker B: So if I decided to jump in and build another company because I, I know what that takes, right? And I know how most people should never do it, right? Like, you shouldn't be a founder until something drives you so nuts that the only solution is to become the guy who builds the solution, right? But the decade long problem was kind of the commitment that I, you know, that my wife and I made, right? Was like, if you're willing to say that you're going to go all in on this and you're willing to work on that problem and think about that idea and serving that constituency for a decade, it's worth us as a family making the sacrifices that we're going to do. And so it, that disqualified a ton of good ideas, nice things through.

Speaker A: Yeah, nice, nice things.

Speaker B: Like, really interesting things, you know, like, who doesn't want to build a pickleball app? You know, like. But I didn't want to give 10 years of my life to that.

Speaker A: Yeah.

Speaker B: And so, so when I thought about how big of an opportunity this is, that was kind of the moment. And so I've said it to all of our investors. I said, you know, we're building this, uh, not as a flip it and sell it and you know, go, go make a single or double. Like, we've got 100 million Americans who really, really need this and we think that we can serve them. We think that that's probably going to attract a lot of interested parties at some point in the not too distant future. Especially as we start to bake in some of the agentic commerce features that are coming as we earn trust from our shoppers. Those are all in the works and you know, further down. But this is, you know, we start by just giving people information they can take action on and then the trust us to make recommendations for them and then they trust us to point out things that they should try next time and then maybe one day they'll, they'll trust us to act on their behalf. But all of the agentic solutions that are coming in commerce right now are act on my behalf is, is step one. And there's no trust that's been built. And so it's the reason that just over the past 12 months you've seen the biggest players launch things and shut them down pretty quickly in that space. Because there's just not the consumer adoption. And for us, most of our shoppers are not in cloud code knowing how to do MCP connectors so they can save money using Instacart.

Speaker A: Right.

Speaker B: Instacart launched something and it's beautiful and I use it. But that's not most of the shoppers that we're working with. And we think there's the much more simple first step that opens up every door down the line.

Speaker A: Yeah, love it. And is it a charged app or is it the ad supported or. Free app?

Speaker B: Yeah, so it's free. Yeah, free app. Um, but you know, three revenue lines, business intelligence. Um, eventually we'll work on advocacy, couponing and some ads. Um, but then the affiliate revenue of if you build your shopping list with us, you choose that store, we push it to the store for curbside pickup or delivery. Um, that's where, that's where things start to get really big, really fast.

Speaker A: Awesome. That's fabulous. Andy, what do you do for fun?

Speaker B: I lead a gentleman's dinner society in New York City.

Speaker A: Oh, what fun. Good.

Speaker B: Started off as just a fun idea. A friend of mine who, you know, we kind of knew each other, but I knew he had a really big network of people I didn't know. And I had a really big network of people he didn't know. Seven years ago I said, hey, I'll cook.

Speaker A: Mhm.

Speaker B: You bring three people I don't know. I'll bring three people you don't know and we'll have dinner.

Speaker A: Okay.

Speaker B: And we just hosted our 67th dinner last week. What fun and so we have an alumni group of over 200. 200 guys in the city. Uh, our WhatsApp group is. Is my favorite, you know, active WhatsApp group, where it's. It's high signal, low noise.

Speaker A: Yeah.

Speaker B: Um, but we just, you know, found that there's a lot of men that are just looking for a space to be able to say things that they can't say in other circles. And, uh, you know, and it's been a lot of fun to be able to see the doors that have opened. People are working together, people invested in each other's companies. Um, but, you know, finding community right now, I think, is one of the most important things.

Speaker A: M little similarity to what Levy does. He does a dinner club like that, uh, in New York, actually. So, um, you may bump in him at some point, I think. Uh, Jonathan. Jonathan Levy, I think is his name. And he's.

Speaker B: Okay. Yeah, yeah, I've heard. I've heard his name. Heard of him.

Speaker A: Upper Upper east side. Um, awesome. Well, this was. This was great, Andy. Thank you for taking the time to share with us what you're doing. And it was fascinating, and a couple of great ideas came out, so thank you.

Speaker B: Awesome. Thanks so much for having me.

Speaker A: And for those of you that joined us, thanks for coming along. We'll see you next time on the CEO Project podcast. Thanks for listening to the CEO Project podcast. We'll see you next time. Be sure to subscribe to get all the future episodes and check out our website, www.theceoproject uh.com.