HelloFresh, the Berlin-based meal kit company with a growing U.S. presence, is entering the highly competitive online grocery business today with the launch of HelloFresh Market. The digital store offers customers a range of add-ons to the meal kit order they already receive on their doorstep—from quick meals to pantry essentials, fresh produce and ready-to-heat meals.
“Ultimately for us the goal is to move to a broader food solutions group instead of a dinner solutions group,” Uwe Voss, CEO of HelloFresh U.S, told WGB. “We hope to take customers to other meal occasions. Right now, they receive three to five dinnertime recipes from us, but we don’t have an option for you if you want a solution for lunch, breakfast or complements to dinner such as sides, soups and salads. We know customers are interested in this.”
The introduction of the Market is part of HelloFresh’s midterm growth strategy, and an important step for the company with ambitions to become “the world’s leading fully integrated food solutions group.”
Aiming to grab a “larger share of the dollar spend,” HelloFresh Market seeks to offer greater value and convenience to customers as a one-stop option for both curated grocery items and mealtime inspiration, Voss said.
The Market will launch with what Voss describes as a “very curated set of grocery items.” But the company’s sights are set quite literally on the bread and butter of the grocery business.
“Our end game isn’t 150 items. We see growing to 1,000 to 2,000 SKUs over time, into items like bread and butter, dairy—high-frequency purchase items,” said Voss, adding that the HelloFresh Market grocery offerings are a “starting point” of items that should feel familiar to customers as they have already enjoyed them in HelloFresh meal kits.
“We’re not going to sell 50 types of bread and we don’t want to lose sight of what’s comfortable for our customers who stay with us for frequency of choice,” Voss continued. “The Market is very curated and fun—just like our cooking experiences.”
The introduction of Market in the U.S. follows a successful launch in the Benelux region, where customers can choose from over 150 add-on items to complement their weekly meal kit recipes. Within this region, HelloFresh observed a strong link between the size of the product range and the proportion of customers purchasing add-ons through the Market, which the company will look to replicate in the U.S. As a result, HelloFresh is significantly expanding its product range across categories to provide customers with a variety of items tailored to enhance the shopping and cooking experience.
For HelloFresh, the beauty of its meal kit box model is the existing infrastructure to make its expansion into grocery delivery seamless for both the company and its customers.
“Building an exceptional meal-kit experience over the past 10 years has been key to establishing strong market leadership,” said Voss in a statement. “Through our state-of-the-art supply chain and technology infrastructure, we will provide superior full-service delivery for all meal occasions and capture a greater share of our customers’ overall food budget.”
“HelloFresh is leveraging the box to cover more food occasions,” Voss told WGB. “Generally, as a business, we’re always looking to move closer to the customer and shorten the time it takes to get items delivered. With Market, it’s exactly the same as getting a HelloFresh box delivered. We got the whole supply chain taken care of. It’s just a matter of tagging additional high-value items on an existing order.
“And it makes economic sense,” continued Voss, who said HelloFresh customers can add grocery items to their meal kit orders without incurring additional shipping charges. “Say, you buy a cheesecake. It doesn’t come at an extra cost. The only thing you pay for is the cost of the cheesecake. We don’t charge extra for shipping.”
The range of Market offerings will be rolling out to all customers across the U.S. over the coming months. Its curated offerings are categorized into Seasonal Bundles (cheese burgers, baby back ribs and mac and cheese); Quick Meals, Quick Breakfast (cheesy breakfast tacos, kale salad, cheese tortellini with marinara sauce and assorted Intelligentsia coffees); Sides & Complements, Desserts & Treats (garlic bread, gumbo, salads and sweets such as chocolate chip cookie dough and cheesecake); Proteins, Fresh Produce (chicken, ground turkey, apples and avocados); Grains & Pastas & Breads, Cheese (Jasmine rice, brioche buns and ricotta cheese); and Pantry Essentials, HelloFresh Flavors (olive oil, salt, pepper and seasonings).
The Market features partnerships with a growing list of high-quality purveyors, such as Epicurean Butter, Pillsbury, Intelligentsia Coffee, Annie’s, Vive Wellness Shots and more, to offer a rotating assortment of new and exciting options, the company said.
HelloFresh has extensive experience in keeping its customers coming back for more. Its customers already rate its meal kit products every week, and Voss said the same ratings will apply to grocery items. “If a recipe doesn’t perform in our meal kits, it doesn’t come back. If there’s not interest in a grocery item, we will not continue to carry it.
“Our assortment is going to get more and more powerful because it’s cultivated by our customer,” added Voss. “We have to put a stake in the ground starting with 150 items. Not all 150 will be home runs out of the gate. We’ll continue to go deeper and deeper into what customers like.”
HelloFresh has been steadily increasing its meal kit footprint in the U.S. and globally. Last November, the company acquired Factor—the greater Chicago-based company specializing in health-focused ready-to-eat meals. And this month, HelloFresh announced the acquisition of Youfoodz, one of Australia’s leading ready-to-eat meal services in the direct-to-consumer space.
HelloFresh SE operates in the U.S., the United Kingdom, Germany, the Netherlands, Belgium, Luxembourg, Australia, Austria, Switzerland, Canada, New Zealand, Sweden, France, Denmark and Norway. In the first quarter of 2021, HelloFresh delivered 239 million meals and reached close to 7.3 million active customers. HelloFresh was founded in Berlin in November 2011 and went public on the Frankfurt Stock Exchange in November 2017. The company has offices in New York, Berlin, London, Amsterdam, Sydney, Toronto, Auckland, Paris and Copenhagen.