If you, like many of us, exhausted your recipe repertoire days into lockdown, HelloFresh’s Laurent Guillemain may have a solution for you.
The meal kit giant has been supercharged by the pandemic with its offer of convenience for homebound Brits. The son of a Frenchman says HelloFresh’s business model means not only ditching the weekly shop but also ‘getting rid of the hassle of having to choose different meals to cook every night’.
Even in the first three months of last year, before the pandemic took hold, UK sales grew 62 per cent as the appeal caught on. Then lockdown happened.
Fresh face: Laurent Guillemain, 33, has seen surging HelloFresh sales
‘I’ll never forget the first week. We saw a huge surge in demand, even faster than we had seen in the previous three months. It quickly became obvious that this wasn’t stopping any time soon even though we were close to capacity already,’ says Guillemain, 33, who arrived to run the UK business is 2019.
HelloFresh already had a 200,000 sq ft facility in Banbury, Oxfordshire, and was due to open a second in Nuneaton, Warwickshire, by the end of the year. But Guillemain says: ‘We needed to find some capacity and quickly. Measures so we could support feeding the nation – additional assembly lines, retrofitted facilities with more cold storage space.
‘The food market had shifted considerably in those first weeks so we partnered with suppliers, ones who had lost capacity from the closure of sectors such as restaurants or hospitality, and who had some space in their own facilities to help us produce some of our kits.’
By the end of the year, when the second facility finally opened, HelloFresh had increased its staff numbers by more than 1,000 in 12 months, and sales for the year had risen 141 per cent on 2019.
The surge was the equivalent of ‘probably two to three years of acceleration’, Guillemain says.
‘I still expect us to keep growing as we come out of the pandemic – not at 141 per cent, but I would expect us to keep growing.’
He refers to the ‘stickiness of customers’ and explains ‘habits have been formed’ over the past 12 months. HelloFresh customers order meals for two, three or five days at a cost of up to £64.99 for a family of four. You can choose the meals from a menu of 35 options or provide some basic parameters and go for a random selection.
He says: ‘I think you are going to see there has been a shift. A structural shift. Lockdown has been so long now. Habits have been formed. People are saying to us they would like to keep ordering from us.’
Customers on their first box are ‘trying it out but by their fifth box customers realise they are quite enjoying the convenience and the food they’ve been getting’.
Guillemain adds: ‘One of the main drivers is convenience – not having to go into stores, having the goods delivered to your home. But also getting rid of the hassle of having to choose the different meals every night. The conversation you have every morning, or on a Thursday evening after work, about what’s for dinner and having to make a last-minute dash to the shop.’ He says carefully calculated portion sizes and meal kits made to order – HelloFresh orders take several days to arrive – mean less food waste. Some meals are designed for those who would rather not spend much time in the kitchen.
But he adds: ‘We’re also catering for customers looking for that fun of discovery, the surprise and delight of ‘I’m going to cook something new’. We did a survey which found 59 per cent of people hadn’t tried a new ingredient when cooking at home in the past six months. The average person only has six recipes in their cooking repertoire. So there’s that surprise element of learning to cook with new ingredients – something like samphire, for example, which a lot of people wouldn’t consider, as well as learning to cook entirely new dishes.’
It’s not difficult to identify the rivals whose market share he plans to chip away at. But he’s happy to clarify they include companies such as the takeaway delivery giant Deliveroo that has been lined up for an eyewatering £9billion float. He admits: ‘We see anybody within that same meal occasion as a competitor, some more direct and some less – supermarkets, in store and online, and rivals in the same space like Gusto, Mindful Chef. And we also look at food delivery, the likes of Deliveroo. We’re all competing for that same meal occasion: dinner.’
The firm was launched in 2011 and was listed on the Frankfurt Stock Exchange in 2017. Global sales are more than £3billion after doubling last year and, crucially, the group makes a profit. Its largest market is the US but Guillemain says there is a huge opportunity to grow in the UK, where sales grew faster than the US and its home market Germany last year.
The former management consultant says he thinks supermarkets, by contrast, will increasingly struggle to adjust to the surge in online demand. He says: ‘It’s very hard for the bricks and mortar grocers to make a profit with their online business. Online, if you attribute all the costs, typically does not make a profit for them. The product goes to a distribution centre, then perhaps to a regional one, then to a store, gets put on a shelf, and it’s from there many of them deliver to customers. That product gets touched many times and moved from place to place. It’s very expensive for them.’
Guillemain says HelloFresh is, by contrast, a ‘pure play’ food player set up in the most efficient way.
Online food sales before the pandemic represented 8.7 per cent of the market. That has almost doubled since then. Guillemain says: ‘So it shifted quite dramatically in the past 12 months. As online has got bigger they need to make that structural shift. That’s the predicament they’re in.’
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