HelloFresh lifts revenue in Q1

Internet Retailing

17th May 2018

Meal kit delivery company HelloFresh lifted overall Group revenue by 44 per cent in the quarter ended March 31, 2018, compared to the same period last year, thanks in part to its strong performance in Australia, where HelloFresh saw first-quarter revenue increase 50 per cent.

The Group delivered 48.3 million meals to 1.88 million active customers in the quarter, driving $468 million in revenue, and narrowed its losses to $34 million from $46.5 million in Q1 2017.

Tom Rutledge, CEO and founder of HelloFresh Australia, said the meal kit company’s local arm contributed significantly to the these results and promises to continue to do so.

“Last year was a really successful year for us in terms of product improvements and portfolio expansion. We are now able to meet a greater range of customer needs and we’re seeing our order values grow, which is great from a margin perspective as we’re able to spread the relatively fixed costs of fulfilment – packaging, fulfilment, and product creation effort – over higher basket sizes,” he told Internet Retailing, noting that HelloFresh Australia has been consistently profitable over the past several quarters.

Tom Rutledge, HelloFresh CEO

HelloFresh Australia said in a statement that it has sold more meals and added more customers in Q1 than ever before and has a current run rate well in excess of $200 million.

This follows HelloFresh Australia’s expansion from capital cities to suburban and regional areas and its launch of a gourmet recipe range aimed at boosting average order value and the bottom line. The business now ships more than 550,000 meals each week across NSW, VIC, QLD, ACT, SA, WA and NT.

At the same time, HelloFresh Australia set new records across key customer experience metrics in Q1, while reducing marketing spend, according to Rutledge.

“We are … seeing a new standard in marketing efficiencies because of advancement in our attribution technology, focussed investment, and increased referrals from strong product improvements. All of these factors lead to reduced marketing spends, higher lifetime values, and ultimately, returns for our investors,” he said.

The recent collapse of Aussie Farmers Direct has highlighted the complexity of delivering high quality fresh produce to customers’ doorsteps on a large scale, but Rutledge said HelloFresh has the data and disciplined approach to do so successfully.

“We are convinced that the market is ready for this concept, but that doesn’t mean that all who try to serve can do so successfully. That’s why we have seen a number of similar service providers leave markets in which we’re active,” he said, citing My Food Bag’s exit from Australia and Marley Spoon’s exit from the UK.

“Success is hard because there are hundreds of levers that need to be pulled all along the value chain to ensure both a top-notch customer experience profitable operations.  We’re now the leading meal-kit proponent in every market we’re active – as well as globally.

“We’ve been able to achieve this through a data-led approach to decision making and building strong expertise through a tight focus on a small range of products meeting a specific consumer need. Continuing this disciplined approach and prioritising an ever improving customer experience will allow us to continue to serve more and more customers.”

Updated at 11:21 AM AEST.