Businessmodel of HelloFresh

Customer Segments

HelloFresh provides a subscription meal and recipe kit service to the general consumer market. The Company’s service is targeted principally at those aged between 30 and 50 years of age, largely including young professionals, and young families with working parents. Reports also suggest that around 80% of the Company’s subscribers are women. These demographics are targeted as they typically have less time to devote to meal preparation and grocery shopping, and are more likely to have enough disposable income to afford subscription services.

HelloFresh is based in Germany, which appears to remain its principal market. The Company also operates local services in the UK, the Netherlands, Belgium, Austria, Switzerland, the US, and Australia.

Value Propositions

HelloFresh provides value to its customers in the following ways:

• Its accessibility and ease of use, with the Company making its services available through various online and mobile channels, including mobile apps, with customers easily able to manage their subscriptions and accounts independently;
• The quality of its meals and ingredients, with the Company sourcing its ingredients from reliable and sustainable suppliers, and providing a varied selection of recipes spanning all tastes and dietary requirement;
• Its competitive pricing structure, with the Company providing subscriptions at competitive rates, that are comparable both to competing subscription services and to traditional grocery shopping;
• Its international reach, with the Company operating local services across Europe – including in the UK, Belgium, Switzerland, and Austria, the US, and Australia; and
• Its sustainability and food waste schemes, with the Company seeking to reduce food waste by providing only the correct amounts of each ingredient, and using only recyclable packaging. ### Channels

HelloFresh operates a website at www.hellofreshgroup.com, through which it provides information on its management team, its services, and its international reach. The Company also operates local website in each of its operating jurisdictions, which serve as online sales channels. These local websites enable customers to select subscription plans, browse menus and recipes, and manage account settings and payments. Similar functionality is available through the Company’s mobile apps, which operate on iOS and Android systems.

HelloFresh began by delivering its meal boxes to customers via third-party carriers; however, the Company has begun to develop its own in-house fleet of delivery vehicles in recent years, with a view to depending less on the services of third-party carriers. HelloFresh plans its routes each week based on the deliveries it has to make, taking the shortest route possible in order to make its deliveries more efficient and reduce its carbon emissions.

Customer Relationships

HelloFresh provides its services on a self-service basis through its online and mobile channels, with customers able to select subscription plans, manage account details, arrange delivery schedules, and make payments online without interacting with members of the Company’s sales and support staff. HelloFresh seeks to provide a reliable and efficient service to its customers, with a view to securing recurring business.

HelloFresh operates a customer care team that provides ongoing support to subscribers. Customers are able to access personal assistance with delivery issues, enquiries, and complaints by contacting the company’s support staff over the phone or online. The Company also provides a range of online resources to its customers, including FAQs and recipes.

Additionally, HelloFresh maintains an online presence through which it is able to interact directly with its customers and keep subscribers informed on company developments. This includes a company blog, as well as social media accounts with Pinterest, Facebook, Google+, Twitter, and Instagram.

Key Activities

HelloFresh is a meal plan subscription service provider. The Company sources, packages, and delivers meal boxes to subscribers, providing a varied range of recipes to customers, using pre-measured seasonal ingredients, providing in a simple and accessible meal solution. The Company offers several different meal subscription plans, with subscribers able to select different menus for each weekly delivery.

HelloFresh delivers its meals to customers on a weekly basis through its own fleet of delivery vehicles, as well as through third-party delivery companies. The Company is based in Germany, which continues to be its principal market. It also has local operating units in the UK, Austria, Belgium, the Netherlands, Switzerland, Australia, and the US.

Key Partners

HelloFresh works closely with a number of partner companies and organisations to provide quality meals and ingredients to its customers reliably and efficiently. These partners include:

• Supplier and Sourcing Partners, comprising a range of food producers, primarily local food and ingredient suppliers, that provide fresh, high-quality ingredients to the Company;
• Channel and Affiliate Partners, comprising a range of companies and websites that operate as part of the Company’s affiliate network, extending the Company’s own marketing reach in return for commissions on sales; and
• Delivery Partners, comprising third-party delivery service providers that support the operations of the Company’s own distribution and delivery fleet. HelloFresh has a number of supplier partners, comprising local operators such as Masser Potato Farms, Del Rey Avocado, To-Jo Mushrooms, Murray’s Chicken, and Love Beets. The Company also has a partnership with chef Jamie Oliver, with whom it collaborates in promoting healthy eating practices and the benefits of fresh ingredients.

Key Resources

HelloFresh’s key resources are its portfolio of recipes, its network of suppliers and supply chain, its online and mobile platforms, its It and communications infrastructure, its delivery channels and fleet, its partnerships, and its personnel.

HelloFresh owns and leases a number of properties as part of its network of offices and local operations. This includes offices in Germany, the US, the UK, Austria, the Netherlands, Switzerland, Belgium, and Australia.

Cost Structure

HelloFresh incurs costs in relation to the development of its portfolio of recipes, the management of its supply chain and suppliers, the development and maintenance of its online and mobile platforms, the maintenance of its IT and communications infrastructure, the management and operation of its delivery infrastructure, the management of its partnerships, and the retention of its personnel.

In 2016 financial statement HelloFresh recorded cost of goods sold in the amount of €127 million, including the acquisition of ingredients and supplies. The Company also incurred fulfilment expenses – comprising costs related to the receiving, packaging, and shipping of goods – in the amount of €117.6 million, marketing expenses totalling €80.5 million, and general and administrative costs totalling €14.8 million.

Revenue Streams

HelloFresh generates revenue through the provision of a meal delivery subscription service to customers across Europe, the US, and Australia. The Company provides several subscription plans: Classic Meal Plan, Veggie Meal Plan, and Family Meal Plan. Subscriptions are priced on a per-meal basis, and can cover between two and five meals per week, for two to four people. Prices in the US range from $69 per week for three meals for two people, and $129 per week for three meals for four people.

In its 2016 financial statement HelloFresh recorded an annual revenue of €291.5 million, up considerably on the €112.5 million recorded by the Company in 2015.