Today, 1 in 8 Americans receive Supplemental Nutrition Assistance Program (SNAP) benefits. Nearly 1 in 2 will qualify at some point in their lives. This is not a place on the edge of grocery retail. That’s the trend, going in and out of eligibility as the economy tightens and loosens.
Fodder It is built for this consumer. It is not in the interest of the consumer. And differentiation is the whole thesis behind the company’s recent $40 million Series B.
“We don’t see ourselves as an EBT point solution,” Forage CEO Ovik Lavian Karen Webster said. “We view ourselves as building a network for affordability.”
This framing is important, Lavian said. SNAP technology has spent most of its life in a narrow corner of payments, helping a qualified shopper finish a grocery order and nothing more. Forage is approaching the product as the first in a much larger platform targeting households for whom stretching their food budget is the daily task. No venture capital has emerged to address the benefits.
“Investors didn’t just want to update their SNAP benefits,” Webster said. “They obviously invested because they believe there is a much bigger business here.”
The bigger business is affordability itself, which is delivered to a population that most retail infrastructure was never designed to serve well, LaVian said.
For merchants, this changes what SNAP acceptance is. It stops being a compliance check box at the register and becomes part of how the store wins and retains the price-conscious shopper. With interest dollars falling each month, consumers are shopping more selectively, comparing promotions across merchants and drawn to retailers that make a tight budget go further, LaVeyan data finds.
Asked whether merchants should treat SNAP as customer acquisition or customer retention, LaVian said the question begs the wrong choice.
“I think it’s both,” he said. “If you don’t meet that consumer’s needs, that customer won’t come back to shop at your store.”
Webster linked this to broader consumer behavior, pointing to PYMNTS research showing that low-income consumers are often receptive to online shopping because digital channels allow them to compare prices across retailers without additional transportation cost. For this shopper, the ability to search for a lower price became as valuable as the convenience of ordering online.
This vision is in Forage’s founding DNA. Before starting the company, LaVian built payments technology at Uber, then led Instacart’s payments and commerce business, where he helped bring SNAP acceptance to online grocery. Experience convinced him that most assumptions about subsidy recipients simply don’t match how those consumers actually shop, or the obstacles they face getting to a store at all.
Affordability is the network. SNAP is the on-ramp.
The assumptions that LaVeyan wants to overturn are practical ones. Today, 1 in 3 SNAP recipients live in a food desert, where the nearest full-service grocery store can be miles away, and 1 in 5 live with a disability. Many rely on public transportation or self-employment, turning a trip across town to a second or third store into a real economic cost.
“Being able to shop online with Instacart or with any of our partners, actually resonates more than it might for other demographics,” LaVian said.
This means that the network reaches in two directions simultaneously. On the business side, Forage connects retailers with more than 40 million benefit recipients. And on the consumer side, it’s building tools that help those families manage money that software alone would never address. New capital finances both.
“We are going to be more ambitious than we were before,” Lavian told Webster.
On the consumer side, the company recently launched an app that allows users to track benefit balances and superficial savings opportunities. The need is urgent and predictable.
“The average EBT family of four receives more than $700 in EBT benefits per month,” LaVian said. “These benefits are mostly exhausted by the second half of the month.” And when the subsidy money runs out, the affordability problem doesn’t go away. Households continue to look for ways to cover grocery expenses until the next cycle rolls around, and this back half of the month is exactly where the affordability network gains its footing.
On the infrastructure side, Forage is working on expanding the rails that handle restricted payments. Beyond SNAP, he has moved into health savings accounts and flexible spending accounts and is working to build support for Women, Infants, and Children (WIC) benefits. Programs serve different purposes, but they share the difficult parts. Product eligibility, compliance and transaction guidance. Solve those problems once and every new program extends the same network to the same consumers.
LaVeyan has been upfront about the standard the network should be held to, starting with fraud.
“We should not be tolerant of any level of fraud in wire transfers,” he said. “The total number of dollars stolen by bad actors from vulnerable American families should be zero.” He said preventing fraud, which is routine in traditional card payments, should be standard across government benefits programs, because households that are robbed are the least able to absorb the loss.
Watch the interview
Watch Karen Webster Complete conversation With Forage CEO Ofek Lavian to learn more about:
- Why investors see affordability infrastructure as a much bigger business than processing wire transfers.
- How the Forage Network connects merchants with over 40 million benefits recipients.
- Why online grocery is more important for consumers in food deserts or balancing multiple jobs.
- How the expansion of WIC, HSA, and FSA could reshape the future of restricted payments.
