Summary

  • Ready-to-eat food delivery firm HelloFresh provides its services in 14 countries including the US, UK and Australia, on a subscription basis.
  • The German company has already raised guidance four times in 2020 on the back of robust performances witnessed during the pandemic and beyond.
  • Though HelloFresh is facing competition from its local rivals, the company said their subscription base rose during pandemic.

HelloFresh SE (XETRA: HFGG), a German meal-kit delivery firm, is seeing higher demand as the pandemic-hit consumers are desperate to add some jazz to their home-cooked meals amid strict lockdown.

Ready-to-cook food delivery service HelloFresh promotes itself as a “curated box” for food. The firm delivers a complete box with instructions for each recipe that are easy to follow. The subscribers can choose the ingredients as per their choice. The package comes with not just the fresh, pre-portioned ingredients but also nutritional information for healthy meals.

With HelloFresh, users get a chance to be a gourmet chef and that too at their home. With the meal-kit delivery, consumers are saving up on the energy on shopping for the ingredients to prepare the meal, making life a bit easier. The comfortable process in selecting the meal and payment is changing the lifestyle of busy Australians.

Healthy and fresh meals at your doorstep

HelloFresh recipes take about 30 minutes to cook a fresh and delicious dinner. Be it steak, fish or vegetable salads, versatile and straightforward recipes will not just help with hunger but also provide the much-needed nutrition.

Most recipes take time with preparation routines like cutting veggies, marinating the meat and then some more time is spent on cooking. With HelloFresh, the customers can cook stress-free dinner with little setup and cleaning afterwards. The classic box provides three nights of dinner for two people each week. HelloFresh also has a subscription box for four people, a family box and a veggie box.

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Trillion-dollar industry globally

The read-to-cook meal firm has already raised guidance four times in 2020. The company said that consumers are now dining more at home because of the lockdown restrictions on restaurants. The company has its primary market in the US, where the firm is serving hungry, health-conscious customers with convenient food.

In its latest guidance released on 16 October, the company has increased its FY20 revenue growth guidance to between 95% and 105% on a constant currency for the HelloFresh Group. Previously, the revenue growth guidance was between 75% and 95%. The company increased the guidance on the back of robust performance in Q3 2020, which continued in Q4 2020.

The revenues for 2019 stood at €1.8 billion. HelloFresh provided 280 million meals in 2019 and had approximately four million active subscriptions in both the first and second quarter. HelloFresh operates in 14 countries such as the US, UK, Germany and Australia with around 7000 employees in these countries.

HelloFresh’s shares soared all-time high of €55.20 after it released its latest guidance report. The industry experts believe that it could go higher and expect the share price in the range of €63 -€65.

HelloFresh gained praise from the analyst as they believe the company’s revenue would double in 2020, and there is a massive growth paved ahead. Few analysts believe that HelloFresh shares trade at the discount rate because the company has a higher churn number. The HelloFresh customers use the subscription for a week or so and then discontinue, only to return after a while.

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Facing competition in Australia from Marley Spoon

Marley Spoon AG (ASX:MMM), a meal kit delivery service, features legendary chef Martha Stewart’s award-winning recipes and smart cooking techniques. The company recently teamed up with culinary icon Maggie Beer.

Marley Spoon is witnessing its sales rising amid the coronavirus pandemic. Marley Spoon said on the rising customer base that its order frequency and average order sizes reduced substantially at the beginning of the health crisis. Slowly, it gained momentum and remained at pre-coronavirus pandemic levels.

Also Read: Marley Spoon (ASX:MMM) announces $56 million capital raise to fund global growth

Way forward for HelloFresh

HelloFresh chief executive Dominik Richter said that before the coronavirus pandemic, its consumers were cooking about 50 per cent meals at their home. The numbers started to rise with pandemic forcing people to stay home.

The company is improving its product and assortment to meet the consumer expectations and provide the exact meals its customers are looking forward to cooking and eating daily.

 

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