How HelloFresh will continue on its successful growth path

Today I’d like to shed some light on our thinking behind our multi-tier brand strategy that we pioneered in the US about 2.5 years ago. It’s a strategy that has allowed us to almost double the Total Addressable Market (TAM) in our largest market, the US, over the past two years. As a result, despite more than doubling our revenue over that period, our overall penetration increased a lot less.

Why is this important? The single biggest mistake one can make is looking at the current offering and penetration levels of a fast-growing business, i.e. using the size of an existing market to assess its future potential. This vastly understates the opportunity of new business models that redefine existing categories such as we do with the dinner-at-home category.  

To put it in simple words: For a high-growth business, the total addressable market is never static but always dynamic. With every new feature, price point, product or service level improvement, the value proposition becomes relevant for a larger number of households and users globally. 

In 2018, with our understanding of the different customer segments, their respective needs and their available budgets, we embarked on scaling our premium tier Green Chef and on launching our value tier EveryPlate. 

Our goal with EveryPlate was to help consumers put simple and delicious dinners on the table at an affordable price point. By capitalizing on our Technology and Supply Chain platforms, we’ve been able to pass along the savings to our customers and offer for the first time a fully fledged dinner solution that costs only $5 per portion - in line with the US median weeknight dinner spend! 

2 years after launch, we've been overwhelmed by the response from American consumers: EveryPlate is shipping >25million meals per year to US households, reaching this level twice as quickly as our core brand did in it's entry to the US market. 

In early 2018 we acquired a third brand in the US to target the premium segment of the dinner solution market. Green Chef offers a variety of plans to cater to different lifestyles and dietary preferences, such as Balanced Living, Plant-Powered, Paleo, and Keto. Prior to scaling GreenChef, we were essentially missing out on a very attractive customer segment who cooks a lot at home and cares deeply about their food choices. 

At the same time, we continued to increase the attractiveness of our HelloFresh offering by doubling the number of meals on the menu, significantly reducing the time from order to delivery and improving customer satisfaction meaningfully. 

Being in the market with not one but three brands, which all have distinct product offerings and which we sell at very different price points, has allowed us to scale to customer segments that we could not target with a “one size fits all” brand before. 

After successfully establishing and finetuning our 3-brand strategy in the US, we have now begun the internationalization of this strategy with the launch of EveryPlate in Australia. 

This follows the same playbook that we perfected in the US and will make the meal kit category more accessible to Australians. We now have an amazing value proposition in place for millions of households who like cooking and the concept of easy dinner solutions but who haven't been willing to spend > $AU10 per person on weeknight dinner. 

Much like in the US, we’ll be leveraging our best in class manufacturing capabilities, software solutions and supplier relationships, while building up additional economies of scale which we can subsequently pass on to our consumers to further increase the attractiveness of all of our brands. 

This is only a small first step in fully internationalizing our three brands globally. By rolling out these brands to our major international markets, we’ll be massively increasing the TAM that we can go after over the next few years.

Aside from the internationalization of our US brands, we’re also working hard to launch new geographies and, most importantly, perfect the product and service levels of our HelloFresh brand to attract and re-engage millions of households globally to the best solution for weeknight dinners. I personally look forward to many more exciting initiatives to expand our Total Addressable Market and to further delight millions of new and previously untapped households with our offerings all over the world.