HelloFresh | Online food retailer
HelloFresh is a fresh food delivery service that provides recipes, instructions and ingredients in exact quantities delivered to your house. In this article, we will look at, 1) what is HelloFresh?, 2) products, 3) business model and key components, 4) learning from HelloFresh’s success, and 5) HelloFresh Reviews.
WHAT IS HELLOFRESH?
HelloFresh is a fresh produce delivery service. The concept is based on allowing people who use the service to cook their meals from scratch using the items provided in the delivery box. The company believes that everyone should be able to access great quality, fresh food items as well as get information on how to create interesting meals using them. This service is an alternate to take out food from restaurants or processed ready to eat meals which may end up being more expensive and less healthy.
To achieve this, the company sends its customers recipes as well as all the ingredients needed to make them. The items are delivered to the customer’s door and are provided in exact measurements needed for the recipe. This is meant to take away the hassle and headache of procuring ingredients and then figuring out what to make and instead allow people to just cook and eat. The recipes are created by experienced chefs who work towards making them easy to comprehend and assemble in a short periods of time. Instructions come written in easy to follow steps. The only ingredients a customer needs to keep on hand are salt, pepper, olive oil, butter and white sugar.
The company offers free delivery which is an exciting prospect for many of its customers. Typical meals include chicken chowmein with oyster sauce and water chestnuts, chocolate chilli con carne, wild mushroom and truffle macaroni and ratatouille with lemon roasted sea bream. The quality of the food is generally very good with extremely fresh vegetables and well prepared meat and fish.
History of HelloFresh in the UK
The company was created in January 2012 by a former lawyer turned chef, Patrick Drake and Oxford graduate Ed Boyes. Drake pursued his culinary dreams by training at the famous Fat Duck restaurant by Heston Blumenthal. He now serves as the head chef at the enterprise while Boyes is the managing director.
The first ten boxes were sent out from Drake’s living room accompanied by hand-written recipes. The recipients were mostly family and friends. Since then, the company has growth swiftly, with 100,000 meals delivered just a year later. The two employ a team of 25 employees. The company spread from its initial target market of London to all over the UK. At least eight new recipes are developed per week.
HelloFresh in Other Countries
- Germany: HelloFresh was created in Germany by Dominik Richter, Thomas Griesel and Jessica Nilsson. The three moved to Berlin in 2011 and after an assessment of different business models and industries, they decided to work on the grocery business. The area combined their interest in fresh food and nutrition with an opportunity in the market. The company was initially backed by the somewhat notorious venture firm and incubator, Rocket Internet. The collaboration allows HelloFresh to benefit from Rocket’s global presence and resources.
- Netherlands: In the Netherlands, HelloFresh was co-founded by Maartje Frederiks. She quit her job as a consultant to venture out on her own with this startup. The company aims to serve 1 percent of all households in Netherlands by 2015.
- Austria: The company also operates in Austria.
- USA: Co-founded by Hamish Sheppard, hello Fresh delivers close to 1 million meals all over the United States. The company recently raised $50 million in funding to continue expansion.
- Australia: HelloFresh was co-founded in Australia by Tom Rutledge who is a former Masterchef contestant. He remains responsible for product development, recipe creation, supplier relationships and the supply chain within Australia. The company does not have a lot of competition in the Australian market and find efficient logistics to be their biggest challenge.
The company strives to provide details of its suppliers to show where the items are coming from. The company tries to use local, UK based, seasonal and organic ingredients and provides other items only when it is absolutely necessary.
Customers may not get to choose their own recipes however. The company currently allows customers to swap one meal in their box only and does not provide options for specific dietary requirements. This can be a problem for people who don’t eat a certain type of meat of dislike certain food items.
A customer has the option of buying ingredients for three to five meals in a week and portions can vary for two, four or six people. This option is for people choosing meat or fish items. For vegetarians, the options are a bit smaller with three meals at a time for two, four or six people.
Recipes come as cards with step by step instructions and accompanying photos. Preparation and cook time usually stays within 30 minutes.
The company introduces its suppliers. The main suppliers are:
- Fishmonger – supplies fresh fish free from preservatives
- Butcher – supplies all other meat
- Greengrocer – supply the best seasonal fruits and vegetables.
BUSINESS MODEL & KEY COMPONENTS
According to HelloFresh, the target customer base is generally between the age of 30 and 50. These people enjoy a busy lifestyle and 80 percent of the customers are women.
The two founders Patrick Drake and Ed Boyes continue to run the company. Drake is the trained chef and works as the head chef and recipe developer. He creates the recipes that go on the cards that go out with the boxed ingredients. Boyes looks after the operational side as Managing Director. There are 18 employees in the Central London office along with a team of box packers.
There are several types of boxes that customers can subscribe to. The price is approximately 39 Pounds for a three meal box for two people and 36 Pounds for a vegetarian option. The option for four people is 59 Pounds and for six people it goes up to 89 Pounds. The five meal box is 49 Pounds, 89 Pounds and 129 Pounds for two, four and six people respectively. Delivery is free within mainland UK with delivery charges for further off areas such as Ireland, Scotland etc.
Though not a completely new concept and with a few competitors in market, the HelloFresh business is thriving and growing. There are a few reasons for this success. The first is the quantities of ingredients in the box. Regular items such as potatoes or unique items such as pink Himalayan salt are all measured out in the quantities that are required exactly. This means that there is no need to save unused ingredients that may not have a use later on.
In addition to this, the recipe cards which drive the ingredients are developed in-house with new recipes added every week. These are written in clear step by step instructions accompanied by photos which makes it extremely easy for even a novice cook to follow.
LEARNING FROM HELLOFRESH’S SUCCESS
Learnings from USP
The HelloFresh USP remains its ingredient quantities and easy to follow recipes. The premise for the business has been kept simple and effective. The reason behind limited ingredient quantities is to attempt to reduce wastage and run more efficient operations. The company had to work hard with suppliers initially to convince them to re do their supply sizes to accommodate the recipe requirements. But once the suppliers were on board, this unique aspect of the business became one of the key successes of the model.
Further Lessons for Entrepreneurs
Patrick Drake’s Tips for Entrepreneurs
Patrick Drake has taken many drastic steps over the years that have turned his life around. He went from being a lawyer at Goldman Sachs to a trainee chef at the Fat Duck to an entrepreneur. He has managed to create a successful growing business with his partner. Some important thoughts from Drake regarding entrepreneurial ventures are given below:
- Don’t Overthink the Product: Drake feels that often entrepreneurs make the mistake of spending too much time thinking about the product. He feels that this is actually procrastination out of fear of their product not becoming popular.
- Be Passionate About Your Idea: Drake, and many other successful entrepreneurs are of the firm belief that passion is the key to a successful startup. From his own example, he feels that a chef’s work hours are as demanding and punishing as a lawyer’s and similar levels of stamina are needed to survive. But because food is his passion, he finds himself with endless energy and drive.
- Don’t be Afraid: Drake worked in various kitchens occasionally during his breaks from his work as a lawyer. Eventually, he realized that to truly achieve his dream, he needed to take the plunge and burn his bridges. It is only this decision to not be afraid that will lead an entrepreneur to eventual success.
Marketing Tips from HelloFresh
As the business has grown, the Hello Fresh team has employed different means of getting their company’s message to its customers. One of the biggest challenges for the company to overcome has been the preconceived notion that boxed meals of this nature are an expensive item to subscribe to. In reality, it ends up saving time and money at the grocery store and takes away the need to buy various unique ingredients that may never be used again as well as regular items like salad which is often wasted. Some of the ways in which the company marketed itself include:
- Low Initial Marketing Budgets: At the onset, the company kept its marketing budget low. The belief was that constraints encourage creative thinking and innovation. These were traits that the creators felt were essential in a startup enterprise.
- Guerilla Marketing: During the early days, the team would dress us as carrots and distribute root vegetables outside different tube stations. Attached would be a tag that challenged people passing by to cook a delicious dinner using these vegetables. The tag also had a URL with a link to the Hello Fresh head chef, Patrick Drake, making carrot soup.
- Mixing Online and Offline Activities: The company has always recognized the importance of mixing online campaigns with offline activities. This has helped the company build customer advocacy which is essential to the cusses of any food based business. The company has run live Google Hangouts for allow customers to cook alongside Patrick in their own kitchens. To complement this, the company also holds regular live customer events which connects customers and suppliers with each other.
- Involving the Food Blogging Community: The company has had a surprisingly few issues raising funds for their business. Instead, the biggest struggle has been marketing and raising awareness. Together with this is the mindset that an organic food delivery service will naturally be expensive. In reality, direct comparisons show that there is an equality in prices and there are no delivery charges in most locations. To counter this problem, the company identified and contacted popular food bloggers and convinced them to try out the product. The result was feedback from normally harsh critics and a lot of free endorsement and publicity.
Ruth reviewed her HelloFresh box in August of 2014. She received a 25 Pound voucher for HelloFresh at her local tube station. She decided to try the service out and ordered herself a trial box. She received 3 dinners for 14 Pounds. These meals were meant for two people. Included were free delivery and recipe cards. On the first day, she attempted to make Cumin Spiced Beef Skewer with Satay Sauce, Rice and Sugarsnap peas. She found the recipe easy and fun to prepare. The rest of the portion size was agreeable but there was too much rice per person. On the second day she attempted to make the Gremolata Crusted Tilapia with Roasted Mediterranean vegetables. Again she found it easy to prepare and assemble. The third day she made Sweet and Sour Pork with Bulger Wheat. The recipe was simple and easy to follow.
Overall, she felt that though the service was convenient and she would use it again, but she would not choose to make it a permanent exercise as it somewhat curtails the freedom of choice when cooking.
The well-known newspaper reviewed the service in 2012. The verdict was that the quality of food was excellent with extremely fresh vegetables and well prepared meat and fish. The reviewer felt that the meat was in generous quantities and could cater to even 3 people from a box meant for two. However, the vegetables were less in quantity and often the variety not that create or inspiring. In one of two recipes a few key ingredients had been left out of the box such as noodles for a chowmein. The biggest point of contention was the inability to choose the recipes that are delivered in a box. With an aversion to pork and a mild interest in fish, the reviewer ended up dreading these two meals.
Sophie reviewed a HelloFresh box in July 2014. She decided to try out the vegetarian box for 2 people. She found the portion sizes quite generous and there were leftovers that could be used later on. Deliveries are on Tuesday or Thursday at the time of the recipient’s convenience. She found her ingredients neatly packed and fresh in a chilled packaging. Her first meal was Gnocchi with homemade crème fraiche pesto and tomato bruschetta. The meal was ready in 30 minutes and one of Sophie’s favorites. The second meal she prepared was Baked Tofu with peanut satay sauce and steamed bok choi. She found the recipe gave her an enjoyable way to eat tofu. Her third meal was stuffed peppers with pistachio and Italian cheese crust. Overall, she found it a good way to try out unusual food and new recipes without any of the fuss of finding ingredients and recipes.
Image credit: HelloFresh.
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