Sick of wondering what to concoct from the scraps in your fridge? Too tired to venture to the supermarket? Local takeaway reeling off your order from memory? Introducing HelloFresh – an easy and convenient way to create healthy, tasty meals with minimal effort.
Founded in Berlin in 2011 and currently operating in Germany, the Netherlands, the UK, France, Australia and the US, HelloFresh’s online recipe and grocery delivery service is gaining popularity amongst home cooks.
A subscription to HelloFresh sees different recipes sent to your home together with the high quality, fresh ingredients needed to turn them into gastronomic delights. The idea is to make cooking these recipes simple and fun, plus opening you up to a variety of cuisines and flavours. Designed to be flexible and cost-efficient, the concept is ideal for time poor would-be chefs that just want to get a decent meal on the table in less than half an hour, or those seeking a little culinary inspiration.
But delivering perishable goods can prove tricky, as seen with other start ups like Field and Flower. Power Retail talks to Tom Rutledge, founder of HelloFresh in Australia and former MasterChef contestant, about launching into the Australian market, logistical challenges and what lies ahead for this subscription venture.
Tom Rutledge, founder of HelloFresh in Australia
Point of difference: Recipes with fresh ingredients delivered to your door
Can you describe how HelloFresh came about? Are you the sole founder? What is the professional background of your foundation team and what expertise does each member bring to HelloFresh?
HelloFresh is a concept borrowed from a successful Swedish food delivery company. I am the founder of the Australian HelloFresh venture that launched at the same time as ventures in Germany, The Netherlands, and the UK. The head office is in Germany with IT, online marketing and fund raising expertise centralised there. As the sole founder in Australia, I was initially responsible for product development and recipe creation, establishing supplier relationships and the end-to-end supply chain, and of course marketing. Over time I have built a team that focuses on these three distinct areas in addition to customer service.
HelloFresh is backed by Rocket Internet – what was involved in this process and have you taken on further investment since then?
Rocket Internet is an investor in the business. It is fantastic to have such an experienced outfit behind us and the know-how they have acquired in their involvement with ventures like Zalando, Groupon and The Iconic has been immeasurably valuable. We did just complete our second raising late last year which will take the company (globally) to break even and beyond.
How long did it take to bring the concept to market? When did you launch? Can you give me any indication of business growth since then (staff numbers, sales growth %)?
A very short runway for the business as the preference is always to build then optimise as you determine what the market wants, rather than perfect plans then build according to what you think the market wants. We launched in March last year and we are now servicing Melbourne, Sydney and Brisbane. We have grown at over 35% month on month and we now have a team of about 10 (excluding warehouse labour) focusing on different aspects of the business.
What does your product range look like? How is it sourced?
We have a couple of core products – a classic meal subscription and a vegetarian subscription (and a fruit box) available in various sizes for 3 or 5 meals per week and for 2, 4, or 6 people. Our model is to ship a standard product so at this stage we don’t offer choice but constantly change the recipes in the box to reflect seasonal produce and the sort of food you feel like eating given the time of year. We source from family owned businesses for our meat, vegetables and dairy. It requires a bit of planning knowing the order quantities based on the subscriber numbers.
How do you differentiate your business offering from other competitors in the market?
I haven’t seen anyone that offers our service here in Sydney. Our core product, in many ways, is recipes because these determine the box contents. Here we differ from a supermarket because we provide inspiration and planning on top of groceries and delivery. In terms of the other meal delivery services we differ because we are ready to cook rather than ready to heat or ready to eat. This is one of things I’m most proud of with HelloFresh. We make cooking a quick and healthy meal convenient, but at the same time we equip people with the know-how so they can do it themselves whether they continue as a HelloFresh customer or not. The same can’t be said for dinners that come out of a reheated plastic tub. And as well as demonstrating how easy it is to make delicious healthy dinners with great ingredients and simple processes, we also provide the satisfaction of knocking dinner together and sharing it with family and friends. You just can’t get that from a packet or takeaway.
Can you break down your marketing mix for me? What works best and where does the bulk of your marketing investments lie?
Having sustained contact with customers works best. Events and fairs have great value. We also have a customer referral program which is a great channel for us. We tinker in the typical online channels but do very little in terms of traditional offline advertising.
Fulfilment of fresh produce must bring unique challenges – can you talk me through your logistics and how you guarantee quality/timely delivery for customers?
This is easily the greatest challenge for our business and something that needs to be solved for food retailers in general as consumers come to expect the same convenience and service they’re accustomed to in online retail. We receive, pick, pack and deliver all in one day to meet the challenge of handling perishables. And our delivery windows are later in the day to maximise the chance that people are either home for their delivery or it’s not sitting out for too long if they’re not.
What’s next for HelloFresh? Are there any developments on the horizon and do you recognise any potential challenges in the coming year?
We just want to continue to grow at our current rate. As part of this I suspect we will tinker with our model – perhaps more delivery days and possibly supply chain replication in other areas to extend our reach. We’ll also look at ways to expand our product offering. Our customers are always asking us about supplying more than we do. I guess they want to eat HelloFresh for more than just dinner!