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Marley Spoon looks to grow market share with more meal options

Meal-kit delivery service Marley Spoon has expanded the number of meals it offers to customers in Australia following a positive response to the bigger range in the company’s home market of Germany at the end of Q2.

As of October 18, Australian customers can choose from 20 rather than 12 meals each week and have the ingredients and recipes for every meal delivered to their doorstep. Marley Spoon, which listed on the ASX in July, now claims to have the largest offering of any national meal-kit provider.

Marley Spoon CEO Fabian Siegel said the move would help the company to grow its share of the fast-growing meal-kit market.

“Our main goal remains to delight our customers and provide them with a better alternative to the supermarket when it comes to weeknight cooking,” he said.

“We regard providing more choice as an important step towards this goal. We are excited to be the leader in choice and flexibility within the meal kit category in Australia.”

Marley Spoon’s Australian culinary team designed the new menu based on insights from customer data to suit local tastes, which is one of the ways the meal-kit provider reduces food wastage.

The meal-kit concept itself makes it possible to perfectly match supply to demand, since customers in a sense pre-order their meals for the week, drastically reducing the amount of food waste in the supply chain.

Supermarkets not an option

This is the reason that Siegel said Marley Spoon would never sell its meal kits in supermarkets, despite having received offers from retailers in Australia, the US and Europe in recent months, according to a story last week in Australian Financial Review.

“We don’t believe it’s a sustainable business … when you think about the 30 per cent waste you see on fresh produce in general and you could even argue with meal kits it could be higher if you don’t get it right,” he told the Australian Financial Review.

The publication previously reported that the new head of Coles, Steven King, was “fascinated” by the growth of meal kits. But Siegel said that supermarkets fundamentally misunderstand the category, which is a service rather than a retail business.

“As our customer base grows we’ll continue to grow alongside it and offer more solutions to home cooking for our customers at an affordable price. We now have the largest weekly offering of meal-kits in Australia and we’ll continue to delight our customers and provide them with a better alternative to the supermarket when it comes to weeknight cooking,” he said.

Marley Spoon’s net revenue rose 15 per cent globally in the September quarter, compared to the previous quarter. In Australia, revenues grew 36 per cent year-on-year on a constant currency basis.

The company in October said it was on track to achieve its prospectus revenue forecast of €93 million ($146.3 million) for the financial year ending December 31, 2018, but it now expects to lose between €32 million and €34 million (between $50.4 million and $53.5 million), up from its previous forecast of €25 million ($39.3 million), due to an increased investment in marketing to drive customer acquisition.

Logistics squared away

Following a tussle with competitor Hellofresh over the acquisition of logistics provider, BeCool Refrigerated Couriers, in May, Marley Spoon announced last week that is has entered into a commercial agreement with Home Delivery Services (HDS).

HDS offers chilled last-mile services and covers 85 per cent of the total population in Australia. The agreement enables Marley Spoon to add new delivery windows and increased postcode coverage and increase its service levels in existing areas.

“Our experience with HDS has been positive and we are happy to add an additional logistics service provider to our operations in order for our customers to receive fresh produce, ready to cook, straight to their door without any fuss,” Siegel said in a statement about the agreement.

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