Launched quietly in 2011 under a different name HelloFresh began its rise to dominance through the support of Oliver Samwer, the German internet mogul. Samwer dominated the European e-Commerce market with “look-a-like” cloned concepts through his parent company Rocket Internet.
Samwer recruited Dominik Richter as co-founder and CEO not because he was a “foodie” or Chef but because he had excellent education credentials and a proven competitive nature.
Oliver Samwer recognized an opportunity and decided to test and dominate the subscription meal kit market.
HelloFresh launched from Berlin, Germany in October 2012 with Dominik Richter at the helm.
Within a few months of HelloFresh’s launch Plated and Blue Apron began the race for meal-kit company category dominance.
Fast forward through the competitive landscape and we find Plated was sold to Albertsons in 2017 and Blue Apron stock is down 70 percent form its 2017 initial public offering.
In stark contrast HelloFresh financials showed a different trajectory – 51% year over year revenue growth with many profitability challenges relative to labor and other overhead expenses.
What makes HelloFresh the Global Leader in meal kits?
Analysts agree that the relentless and tenacious management style (from inception) has driven growth to meal kit world leader at any cost.
HelloFresh senior management was successful in streamlining the supply chain by sourcing directly from identified global and regional providers.
With failing outside competition HelloFresh continued their dominance by providing improved customer service and lower prices while maintaining profitability.
This strategy is apparent as they focus on acquiring regional market share across Europe and the United States while controlling overhead costs.
With over $300 million in financing from Rocket Internet, Goldman Sachs, and DST Global they continue to distance themselves from top competitors that include: Blue Apron, Home Chef, Plated, PeachDish, Maria, Ooooby, Gousto, Gobble, My Food Bag, Sun Basket, Purple Carrot and Chef’d.
Rocket Internet has since divested themselves of HelloFresh back in 2019.
Why is HelloFresh the global leader in meal kits? It might not be for their product or service.
HelloFresh’s success has been a result of aggressive and effective marketing and food waste cost control tactics. And HelloFresh’s marketing strategy is nothing less than genius. And intuitively, HelloFresh is able to control the consumer experience by knowing exactly what each customer will receive, even before they place an order.
CEO and co-founder Dominik Richter has always relied on market data to heavily influence marketing and sales plans.
This approach continues to serve them well. One of their most aggressive moves has been through international business and facilities acquisition.
In March 2018, HelloFresh acquired Green Chef, a US organic meal-kit company.
In October 2018, Toronto-based HelloFresh Canada acquired Chefs Plate, a Canadian meal-kit company.
But the company is making major moves to gain a more dominant market share through both online and offline channels.
In a recent interview with Business Insider, CEO and co-founder Dominik Richter commented on the company’s goals, “I think we will be the biggest in terms of sales and marketing investment.
Considering what our direct competitors are doing it seems they have been slowing down on improving their key performance indicators.
We are running full throttle here. We think we will be much more cost efficient than what they have been able to put in place so far.”
Financially, HelloFresh has been a success. In less than five years, the company grew to more than 2500 employees in 30 countries.
Most encouraging to investors, HelloFresh’s revenue reached $410 million in the first quarter of 2018. “It is a very profitable business,” said David Yu , an investor with the investment firm DST Global, which bought a $100 million stake in HelloFresh.
Irresponsible and Inaccurate Reviews confuse Buyers
In June 2015, HelloFresh was criticized for their response to negative reviews of their service received on Google.
The company responded by posting a comment on the Google My Business page of the reviewer.
One of the more common issues with fake reviews is that they are written by those who have something to gain. This can be in the form of money, free products or other financial incentives.
In a recent article on Reviewed.com HelloFresh ranks 4th:
- Home Chef
- Martha and Marley Spoon
- Blue Apron
- Green Chef
- Purple Carrot
But we need to put this review into context, “Recommendations are independently chosen by Reviewed’s editors. Purchases you make through our links may earn us a commission.”
This review article is completely absent of any detailed ranking review and appears 100% subjective. It’s only purpose is to drive affiliate clicks to meal kit providers – worthless to any reader.
The Observer.com reviewed HelloFresh, Blue Apron and their 4 competitors and proclaimed PeachDish as winner in an article that still ranks well from 2016.
However, PeachDish has gone out of business. This is where we find several publishers do not update content and skew rankings with sloppy content that ranks – don’t believe everything you read!
Clearly these reviews are heavily biased and hold no weight in a true sense. Unfortunately, real people read these reviews and believe them.
Meal Kits are all about the Quality of the Ingredients and selection of Recipes
One review fact that remains consistent is that HelloFresh continues to delivery high quality ingredients and a selection of recipes with competitive cost structure that keeps customers subscribed.
Checkout the HelloFresh meal’s cost review here.
Not to mention they provide industry leading meal kit delivery services.
Instagram Influencers like Melissa Ortiz @melissaortiz5 demonstrates their support for Hello Fresh in this image.
With a subscription based business model any operator MUST deliver a continuing addition of new recipes with the highest quality ingredients.
The scale of the business is reflected in their ability to deliver over 2 million meals per week throughout Europe and North America.
HelloFresh has demonstrated a unique ability to rapidly respond and deploy new meal kit concepts and options.
Over the course of 6 years they have evolved from a single-box offering into a complete meal kit platform capable of supporting millions of active customers with distinct preferences. This includes delivering custom recipes on an ad hoc basis.
HelloFresh has mastered several key concepts, which have led to their success.
First, meals are not mass-produced but are custom assembled and delivered fresh the next day.
Second, HelloFresh produced meal kit options and new selections on a weekly basis.
These are characteristics that give HelloFresh an edge in the space.
HelloFresh has been competing with its competitors all over the world, like Home Chef and Blue Apron keeping good operators at bay.
managing to keep pace with emerging trends, HelloFresh has added options for Keto, Paleo and Gluten-free selections.
There is a fundamental reason HelloFresh has survived and prospered in a challenging business category and the reason is they stay focused on delivering the best overall fresh food meal kit quality with great taste.