10 Years HelloFresh: From Start-up to Scale-up
When HelloFresh set out ten years ago to become the leading global food solutions group, our vision was to revolutionize people’s grocery shopping and everyday cooking habits. A decade later, we reflect on our mission – to change the way people eat, forever – and on our journey of shaping and growing the meal kit industry as we built a global, scalable, profitable business model with ample growth opportunity.
Pioneering the meal kit concept
HelloFresh pioneered the meal kit concept in many European markets, and we recognized this model had major disruptive potential due to its highly attractive unit economics. By designing the recipes and meals, manufacturing them ourselves, and sourcing directly from suppliers, we owned more aspects of the value chain and captured a greater profit margin per box.
“We saw the golden window of opportunity to conquer untapped online space – the online grocery market – that was ripe for disruption, especially as supermarkets struggled to adapt to e-commerce realities,” said Dominik Richter, co-founder and CEO of HelloFresh. “We built HelloFresh with e-commerce at the core of our model, surrounded by a strong team focused on operational excellence. Over the past decade, we’ve scaled up to 16 global markets, added four new brands, and served a variety of products and meal occasions, but our commitment to excellence has never wavered.”
Key to HelloFresh’s success are superior supply chain solutions and strong relationships with the highest quality suppliers and delivery partners. Our growth flywheel allows us to scale more efficiently over time, with outcomes of a lower cost structure, improved product and selection, a better customer experience and higher order rates.
HelloFresh is transforming the food supply chain. Our direct to consumer concept offers both a higher profit margin per box as well as reductions in food waste and emissions.
Scaling up HelloFresh
Looking back on a decade of HelloFresh, we are pleased the initial growth we achieved following our launch has continued as we execute against our vision to become the world’s leading food solutions group. Yet becoming the global meal kit leader certainly did not happen overnight.
Since our launch, HelloFresh has ambitiously pursued a global roll-out of the meal kit model. We launch into new geographies, expand our reach in existing markets, and analyze new opportunities. This strategic approach has powered our ability to scale up while expanding our total addressable market.
Before HelloFresh became profitable, building and scaling this business required significant and long-term investments – especially in our production capacity. We knew a sophisticated supply chain was critical to our vision, so we invested early and often in building the infrastructure that would allow us to execute against our pillars of growth and profitability: TAM penetration, TAM expansion, and better monetization of our customer base.
“HelloFresh is still tiny compared to the market opportunity we are serving, and we are focused on expanding into new geographies, new customer segments and new demographics,” said Thomas Griesel, co-founder and CEO of HelloFresh International. “Looking ahead, we are committed to further TAM expansion – launching innovative products in new geographies – and increasing our average order value by finding unique ways to serve HelloFresh customers.”
HelloFresh is active in 16 countries on three continents, operating more than 20 fulfilment centers.
High ambitions for future growth
We benefit from our established experience and infrastructure, allowing us to scale more efficiently. The early days of HelloFresh focused on the dinner opportunity, but we knew upon launching this concept there was a range of food-related verticals which can be easily added to the original meal kit model. For example, we are investing in the ready-to-eat market with the acquisition of Factor in the U.S. and Youfoodz in Australia. Our e-commerce platform, HelloFresh Market, offers a one-stop shop for curated grocery items in the USA and Benelux countries. Today, we serve multiple meal occasions beyond dinner – including breakfast, lunch, snacks, and ready-to-heat meals – and customers can choose from a variety of price points and dietary preferences that best suit their needs. Capturing a bigger share of our customers’ monthly food budget is key to our growth, and we continue to adapt to changing consumer preferences – especially as we see more meal occasions occurring in the home. In a recently conducted study nearly half of the respondents (41%) stated that they cooked at home more frequently than they did ten years ago.HelloFresh’s business model and the development of how consumers think about food go hand in hand.
HelloFresh started out with just a few dozen employees with high ambitions. We put a strong focus on innovation, technology, and a data-driven decision-making culture, and this has proven key to our success. Ten years later, we’ve stayed true to our culture while growing our team – a true testament to our evolution from a start-up in Germany that has scaled to 16 markets globally, on three continents, with six brands under our roof.
Our successful track record and proven playbook launching new geographies makes expansion a very attractive, risk-adjusted growth opportunity for HelloFresh. What began as a meal kit company continues to evolve into an integrated online grocery retailer that last quarter served 227 million meals to nearly 7 million customers. We are proud of our journey to date, and we look forward to the next 10 years as we continue our mission to change the way people eat, forever.
Revenue has been growing steadily over the last ten years.