With new avenues of fresh food distribution opening up around the world monthly, weekly, and seemingly daily food retailers must ask themselves one question every Monday morning. That question is what are we selling, to whom, and where? That is according to Steven Johnson, Grocerant Guru®, at Tacoma, WA based Foodservice Solutions®.
HelloFresh, was at one time only a Berlin, Germany based meal kit company. Is doing all the right things according to the Grocerant Guru® because it clearly appears that they are not only asking all the right questions on Monday mornings, but following up with action that is garnering top line sales and bottom-line profits.
Regular readers of this blog know that HelloFresh now has a growing U.S. presence. They are now entering the highly competitive online grocery business today with the launch of HelloFresh Market. So, HelloFresh Market is a digital store that offers customers a range of add-ons to the meal kit order they already receive on their doorstep—from quick meals to pantry essentials, fresh produce and ready-to-heat meals. That will drive incremental sales of Grocerant niche Ready-2-Eat and Heat-N-Eat fresh prepared meals according to Johnson.
Uwe Voss, CEO of HelloFresh U.S said during an interview, “Ultimately for us the goal is to move to a broader food solutions group instead of a dinner solutions group,”… “We hope to take customers to other meal occasions. Right now, they receive three to five dinnertime recipes from us, but we don’t have an option for you if you want a solution for lunch, breakfast or complements to dinner such as sides, soups and salads. We know customers are interested in this.”
Winning the Battle for
Winning the Battle for
Share of Stomach
Share of Stomach
This developing business strategy is so important as introduction of HelloFresh Market is part of HelloFresh’s midterm growth strategy, and an important step for the company with ambitions to become “the world’s leading fully integrated food solutions group.” We ask you what are your next steps? What new avenues of distribution are you going to be expanding your brand?
HelloFresh is aiming to grab a “larger share of the dollar spend,” HelloFresh Market seeks to offer greater value and convenience to customers as a one-stop option for both curated grocery items and mealtime inspiration, Voss stated. Regular readers of this blog know we call this garnering a larger share of stomach.
The HelloFresh Market will launch with what Voss describes as a “very curated set of grocery items.” But the company’s sights are set quite literally on the bread and butter of the grocery business. Which means cherry picking the most requested replenished grocery items. Basically, they are going to do to the grocery store sector the same thing dollar stores did. That is be open, upfront, and win market share.
Voss continued, “Our end game isn’t 150 items. We see growing to 1,000 to 2,000 SKUs over time, into items like bread and butter, dairy—high-frequency purchase items, adding that the HelloFresh Market grocery offerings are a “starting point” of items that should feel familiar to customers as they have already enjoyed them in HelloFresh meal kits.
Most food retailers now that know that selling 50 kinds of bread does nothing to drive top-line sales or bottom-line profits. Voss reiterated, “We’re not going to sell 50 types of bread and we don’t want to lose sight of what’s comfortable for our customers who stay with us for frequency of choice,” “The Market is very curated and fun—just like our cooking experiences.”
So, for HelloFresh, the beauty of its meal kit box model is the existing infrastructure to make its expansion into grocery delivery seamless for both the company and its customers.
Voss continued, “Building an exceptional meal-kit experience over the past 10 years has been key to establishing strong market leadership,”. “Through our state-of-the-art supply chain and technology infrastructure, we will provide superior full-service delivery for all meal occasions and capture a greater share of our customers’ overall food budget.”
“HelloFresh is leveraging the box to cover more food occasions,” …“Generally, as a business, we’re always looking to move closer to the customer and shorten the time it takes to get items delivered. With Market, it’s exactly the same as getting a HelloFresh box delivered. We got the whole supply chain taken care of. It’s just a matter of tagging additional high-value items on an existing order. “And it makes economic sense,”
So, how much will all this cost? HelloFresh customers can add grocery items to their meal kit orders without incurring additional shipping charges. “Say, you buy a cheesecake. It doesn’t come at an extra cost. The only thing you pay for is the cost of the cheesecake. We don’t charge extra for shipping according to the statement from HelloFresh.
Add things you know and like will help HelloFresh Market which will feature partnerships with a growing list of high-quality purveyors, such as Epicurean Butter, Pillsbury, Intelligentsia Coffee, Annie’s, Vive Wellness Shots and more, to offer a rotating assortment of new and exciting options, the company said.
HelloFresh has extensive experience in keeping its customers coming back for more. Its customers already rate its meal kit products every week, and Voss said the same ratings will apply to grocery items. “If a recipe doesn’t perform in our meal kits, it doesn’t come back. If there’s not enough interest in a grocery item, we will not continue to carry it.
“Our assortment is going to get more and more powerful because it’s cultivated by our customer,” added Voss. “We have to put a stake in the ground starting with 150 items. Not all 150 will be home runs out of the gate. We’ll continue to go deeper and deeper into what customers like.”
The grocerant niche is filled with Ready-2-Eat and Heat-N-Eat fresh prepared food that is portable, much of which has the halo of better for you around it. HelloFresh Market is focused you garnering a larger share of stomach. We think they are the right track.
Invite Foodservice Solutions® to complete a Grocerant ScoreCard, or for product positioning or placement assistance, or call our Grocerant Guru®. Since 1991 Foodservice Solutions® of Tacoma, WA has been the global leader in the Grocerant niche. Contact: Steve@FoodserviceSolutions.us or 253-759-7869