Is the Concept Behind HelloFresh Going to Crack the Online Food Market?

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HelloFresh

When it comes to food delivery there is one category that is more fascinating than the other two; and mainly so because it sits right in the middle.

So, those three categories are:

  1. Getting your groceries delivered in the same way you would buy them at your local supermarket.

  2. Getting recipes and corresponding ingredients bundled in.

  3. Getting meals from restaurants via delivery.

General user experience as well as the price of (2) sits right in between (1) and (3). In theory, that makes this a very compelling way of, essentially, selling food online. ((3) is not feasable for taking over your routine supermarket run, (1) can not yet(!) be run as a sustainable business.)

As the saying goes, Rocket Internet has 100 words for food delivery. In a rather uninspiring turn of events, the Berlin based company builder has turned most of its e-commerce efforts to all imaginable ways of delivering food.

Two Rocket Internet endeavours stand out due to their current size and success: Delivery Hero, (a major Rocket investment), and HelloFresh, “Europe’s 4th most valuable company” according to Tech.eu.

While Delivery Hero’s delivery of meals from restaurants is impressively successful, it is also not very interesting to talk about. (There really isn’t that much to say about that company. Other than that I don’t see a moat around the business yet that will keep it safe from any asymmetrically acting new entrant, like, say Amazon Prime.)

HelloFresh wanted to go public last year but cancelled the IPO in more or less the last minute.

Nonetheless, both companies are, right now, the best and only candidates in Rocket Internet’s portfolio for a potentially upcoming IPO. HelloFresh is with €305 million of revenue in 2015 the bigger company of the two. (Delivery Hero had €198 million of revenue in 2015. (via, German))

The Verge recently did a giant review/comparison of HelloFresh and similar companies from a consumers point of view. Here’s what The Verge had to say about HelloFresh:

Hello Fresh was founded in Berlin in 2011, and has 500,000 global subscribers. The company doesn’t have much in the way of shticks or gimmicks, though celebrity chef Jamie Oliver is responsible for many of its recipes. As is often the case, the lack of gimmicks turned out to be an indicator that the product was actually good!

The Hello Fresh box is usually $69, which comes out to $11.50 per serving. However, Hello Fresh is constantly paying C-list celebrities to post on Instagram about their service, which is relevant because the posts are accompanied by great coupon codes! Hello Fresh had the best packaging stratagem by far — everything I needed for each meal was placed naked into one of three smaller cardboard boxes, inside the big cardboard box. It took up a lot more fridge space, but there was infinitely less plastic wrap to feel like a heel about. (…)

The winner for The Verge is HelloFresh:

If I were going to convert to a meal-subscription lifestyle, the best option would probably be Hello Fresh. It struck the best balance between teaching me new skills and not taking up my entire night; the food was reliably edible, and I appreciate gimmickless chicken. I’m not going to come down too firmly on that, because it’s purely hypothetical. I’m not going to convert to a meal-subscription lifestyle.

The Verge’s praise of HelloFresh’s packaging is interesting. In my personal experience1 the packaging and the product as a whole showed me one thing above all: Euphemistically, there is still a lot of room to grow. The packaging takes up a lot of space in the fridge, which among other things increases the mental cost of using HelloFresh.2 It also is an indicator for a logistics headache. Every single package delivered by HelloFresh (and the likes) is comparatively3 huge; additionally to carrying food.

But, whoever cracks the processes, the (modularized) packaging and the user experience, is going to have a huge business on their hand.

Regarding the last aspect (UX) I was surprised to learn that HelloFresh’s option for a vegetarian box is unique in the industry. It makes sense on several levels, business wise as well as from the user’s perspective.

HelloFresh is a company we will be following closely from now on.

More on this topic:


  1. I tried the product months ago so you don’t have to. 
  2. I’d really like to see the kind of fridges that can hold the contents of the biggest HelloFresh boxes and other food without being overstuffed. Even the smallest box made our fridge into a mini logistics centre for HelloFresh. 
  3. Only beaten by the Home & Living category, I guess. 

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