HelloFresh is betting on fixed prices and affordability in times of volatile food prices. A tactic that pays off, as sales rose 31.4 % in the third quarter.
“Very resilient business model”
The meal box company has had a strong third quarter, as sales grew 31.4 % to 1.86 billion euros. This was partly due to new customers: 7.5 million people (+ 8 %) now use the service. Remarkably, profitability also improved, despite high inflation: the contribution margin rose by almost a quarter to 71.8 million euros, taking the AEBITDA margin to 3.9 %. This is all the more remarkable as in the summer season, there is always a lower margin, HelloFresh points out.
While the supermarket bill can vary greatly from week to week, the meal box supplier offers reliable prices, CEO Dominik Richter explains his company’s success. Another factor is that people are more often opting for home-cooked meals instead of more expensive takeaways or restaurant visits. “Over the past years we have succeeded in building a very resilient business model”, he says.
30 % more meals
“While the cost for food is impacted by the inflation worldwide, HelloFresh has been able to remain very affordable. In fact, HelloFresh has been able to further improve its relative affordability, mitigate inflation effects and has avoided passing on every price increase it receives in full to its consumers, while keeping the procurement margin stable”, Richter said. The company has started up additional production sites – after facing capacity problems during the corona pandemic – and productivity is also higher there.
HelloFresh does want to be able to offer customers even more variety: by the end of this year, the range of meals should be about 30 % larger than a year earlier. Product innovation will therefore also remain a key focus in 2023.