The business model of HelloFresh — Business Models Inc.

We are living in strange times where many companies are hit hard. However, there are also companies, like food delivery services such as Uber Eats and your local grocery delivery service, that experience a surge in demand. After all, people need to eat and in times of crises people seem to value healthy food more. We see more and more restaurants pivoting their business model towards online ordering and home delivery or scheduled pick-ups. Consumers get a fresh and high quality meal with no effort required. Grocery delivery services bring fresh ingredients and home supplies straight to people’s doorstep. Have a look at the business model of HelloFresh how this works if you have a bold vision.

Hello? Is it a meal you’re looking for?

HelloFresh has an ever bigger ambition and set out to change the way we eat forever. Their goal is to provide everyone with healthy ingredients and recipes to awaken the chef inside us. The subscription model allows customers to choose how many meals they want per week, how many people the meal should serve and what kind of ingredients they want in their meal. HelloFresh has created numerous recipes utilizing the skills of professional chefs from all over the world. Ingredients are prepared so that all the customer has to do is to follow the instructions and cook their meal. All meals follow a six-step cooking process which lasts no more than 30 minutes, taking the hassle of long cooking times. One of the most important elements of the company is that there are 19 new recipes created every week and each package is customizable.

Business Model Canvas of HelloFresh

No more grocery shopping?

One question that comes up is, “Is HelloFresh cheaper than going to a grocery store?”. The company has gone out of its way to do price comparison studies. It turns out that it is 75% cheaper to use HelloFresh than traditional grocery stores. This is because the middleman is cut out. HelloFresh sources directly from suppliers and they do not mark up the price of ingredients. Recipes are kept seasonal and ingredients are prepared in the appropriate portions so there is no food waste. On top of that, all of the ingredients that HelloFresh uses are responsibly sourced to minimize negative impact on the environment.

Direct insights from customers

If you take a look behind the scenes, we see a data-driven platform that collects all of HelloFresh’s subscriber preferences. These customer insights allow the company to constantly improve their value proposition. By leveraging the power of data, HelloFresh is in a great position to optimize their own supply chain. The company is also able to directly improve customer experience by being able to make accurate predictions of what recipes customers want next.

By making the jump from a simple delivery to a well thought through recurring meal plan, HelloFresh is a clear example of the Services shift. By creating additional value out of food delivery through food and recipe preparation, customers are willing to pay a premium. Consumers are empowered to take ownership of their diet with none of the stress of cooking.

This case is part of the research for our book Business Model Shifts. Read more about the different shifts that businesses are making and how you can do the same for your own business in the book.

Originally published at https://www.businessmodelsinc.com on June 17, 2020.

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We are a global business design agency specializing in strategy and innovation.

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Business Models Inc.

Business Models Inc.

We are a global business design agency specializing in strategy and innovation.

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