HelloFresh broke barriers five years ago when it pioneered a new subscription-model food delivery service. Now, the fresh food box company is taking its business in another new direction, launching a retail offering in partnership with Sainsbury’s.
We spoke to HelloFresh‘s Co-Founder and Head Chef, Patrick Drake, about the decision to take the brand to supermarket shelves, and how this will impact its customer engagement strategy.
You’ve been part of HelloFresh since its inception. How did the concept come about?
I was working as a solicitor in the city but felt very uninspired and spent more time in the executive kitchen than at my desk. After getting lots of experience including working evenings in the kitchen of The Cuckoo Club in Mayfair, weekends working for Spanish chef Jose Pizarro, and a stint at the Fat Duck In Bray, I knew that food was where I wanted to be. Some mutual friends connected me to my fellow co-founders at HelloFresh.
We were inspired by multiple other businesses, but we created the specific category of delivering ingredients for particular recipes on a weekly basis, and globally pioneered the business model. We’re now in nine countries globally delivering over 8.9 million meals per month to 850,000 subscribers.
How has your role developing the HelloFresh business changed over time?
Our growth has come from experimenting with every possible way to market the product and even though we’re five years old, we still act like a start-up. At the beginning we tried everything – I have been known to dress up in a carrot costume handing out fliers at Waterloo, mainly evading security! At the beginning, we packed our customer’s bags in my living room and delivered them on the tube. I’m not doing that any more, but I’m still very hands on and not afraid to get my hands dirty.
What challenges have you had to overcome when bringing fresh food to a home delivery, subscription model?
Our biggest challenge hasn’t been to do with the supply chain, it’s actually been a few steps back from that, creating a totally new category. Trying to get people to understand our concept – you can’t just take out a billboard and expect people to understand you’ve created an entirely new way to get your ingredients for your evening meal. It’s about talking directly with customers, with salespeople and customer referrals.
Who is the average HelloFresh customer, and how does the service fit into their lives?
We don’t really have an ‘average customer’; we appeal to lots of different people – busy professional couples, families, retired couples and empty nesters are all important. People use HelloFresh for lots of different reasons; taking the hassle out of dinner time, convenience and variety are all key factors in why our customers keep using us. The launch of HelloFresh Go will just help us to meet even more consumer demands from people who are looking for a spontaneous dinner time option, with all the benefits that HelloFresh currently offers.
How has customer insight evolved the HelloFresh model and recipe offering over time?
At beginning we had ten customers, largely made up of our friends and family. We now have 850,000 subscribers globally, so we’ve had to evolve our process and offering fairly rapidly. For example, we now have a system that analyses the data from over 80,000 pieces of customer feedback per month. This allows us to know exactly what our customers like and don’t like and develop our recipes accordingly. We’re at the stage now where we’re pretty sure what score a recipe will get before it’s received by our customers.
Which marketing channels have you found most successful in growing the HelloFresh brand?
Our marketing mix and approach is constantly evolving across a wide variety of media, but we have always been fortunate to have very strong underlying growth through organic word of mouth. Ultimately, the best marketing you can do is providing a great product that people want to share and talk about – especially with the growth of social media in recent years. As a result, a lot of our marketing focus goes into how we create an awesome customer experience, which both helps us grow through word of mouth but also via strong retention of our existing customer base.
What was the rationale behind your decision to move into retail, and what were the pros and cons you needed to weigh up before making the move?
The launch of HelloFresh Go is very much a natural extension of our business. This is a great opportunity for us to expand our customer base, as we have seen a huge demand amongst our customers and other consumers for a HelloFresh meal kit offering in retail. Moreover, this helps us in creating a multi-channel business and cementing our position as the world’s leading recipe kit delivery service.
Why have you chosen to partner with Sainsbury’s for your launch?
We felt there was a great synergy between our brands and our joint passion to help people live healthier lives. Moreover, we both believe in the importance of making a positive difference to our community.
Will you be targeting the same customer demographic, encouraging them to shop through subscriptions and in-store? Or do you see your retail products targeting a new audience?
We very much see the launch of HelloFresh Go as an addition to our service for our customers. We have loyal customers who love our subscription model and the fact that we deliver to their door – and that will always be the foundation the business is built on. Our customer feedback showed us that there is a huge opportunity for growth with a product that has all the benefits of HelloFresh i.e. the high-quality ingredients, the variety of new and exciting recipes and minimal waste – but that allows for spontaneity at meal time.
We want to be as flexible as we can be for our customers – new and existing – and that means offering a route to purchase outside of the subscription model – some of our customers would like the opportunity to add to their subscription with a fourth or fifth meal in the week and HelloFresh Go allows them to do that.
How will your marketing strategy evolve to embrace your retail product offering?
Due to the differing nature of this product from our e-commerce offering, we have had to explore new channels including a strong focus on in-store merchandising and out-of-store activities like flyering to drive awareness, education and visibility in-store. With regards to driving footfall to the store, we are using a lot of our traditional marketing strategy including PR, CRM, and social media.
What’s next in the pipeline for the HelloFresh brand?
This is an exciting year for us from a product perspective; as well as launching into retail, we are also focusing on more flexibility and customisation for our subscription customers. We’re also launching new box types throughout the year – our first stand-alone box for Easter has just launched and our customers are reacting very positively to this We plan to launch a Christmas box this year. At the moment, HelloFresh is known for providing inspiration around dinner time. We want to also be known for taking the hassle out of – and inspiring – special meal occasions too