hellofresh-business-model

How Does HelloFresh Make Money? The HelloFresh Business Model In A Nutshell

HelloFresh is a German provider of meal kits founded by Dominik Richter, Thomas Griesel, and Jessica Schultz (née Nilsson) in 2011. HelloFresh has a relatively simple revenue generation model. The company makes money by charging users a weekly subscription fee for meal deliveries.

Origin Story

HelloFresh is a German provider of meal kits founded by Dominik Richter, Thomas Griesel, and Jessica Schultz (née Nilsson) in 2011.

HelloFresh is one of the few unicorns of the German start-up scene and is a product of the highly regarded Rocket Internet start-up incubator.

Griesel and Richter – both former classmates and business school graduates – got the idea for HelloFresh from Swedish service Linas Matkasse.

The service, which offered weekly meal kits and associated recipes, was projected to earn $45 million in revenue after just four years.

Sensing an opportunity, Richter recruited former Linas Matkasse employee Jessica Schultz to join him and Griesel at Rocket.

After just three months, the trio shipped its first meal kit. Soon after, subsidiaries were opened in the United Kingdom, United States, Australia, France, Austria, and the Netherlands.

The service was an instant success, with the company surpassing 1 million meal delivers per month in 2014.

In 2017, HelloFresh became the market leader for meal kit delivery in the key markets of the UK, US, and Australia.

It has since made several acquisitions, including American organic meal kit company Green Chef and similar Canadian company Chefs Plate.

Today, the company claims it is the most popular meal kit in the world. As of Q1 2021, it has 7.3 million active subscribers and over 11,000 employees.

HelloFresh revenue generation

HelloFresh has a relatively simple revenue generation model.

The company makes money by charging users a weekly subscription fee for meal deliveries.

Personalized meals plans are available in the following categories:

  1. Meat & Veggies – offering a wide variety of meat, fish, and seasonal produce.
  2. Veggie – a vegetarian option offering meals of seasonal, naturally produced vegetables.
  3. Family Friendly – for those desiring child-friendly recipes that are quick and delicious.
  4. Calorie Smart – these include meals of around 650 calories each that are dietician approved.
  5. Quick and Easy – tasty meals that require a minimum of prep and cook time.
  6. Pescatarian – offering a combination of vegetable and seafood meals.

Once a meal plan has been selected, prices are based on the number of people on the plan and the number of required recipes each week.

  • For 2 people requiring 2 recipes per week, HelloFresh charges $12.49 per serving plus a shipping charge of $8.99. For 3, 4, or 5 recipes per week, the serving charge drops to $8.99.
  • For 4 people requiring 2 recipes per week, the company charges $8.99 per serving plus the same shipping charge of $8.99. For 3 or 4 recipes, the price per serving is $7.49.

It should be noted that there are no cancellation fees, nor are there any fees associated with a HelloFresh member changing meal plans.

However, Hellofresh does charge a fee if an order cannot be delivered through no fault of the company or its affiliated logistical partners. This usually occurs because of an incorrect address or inadequate delivery instructions. Re-delivery fees vary by country.

Read Also: Subscription Business ModelHow Does BoxyCharm Make Money, How Does Birchbox Make MoneyHow Does Dollar Shave Club Make Money.

Key takeaways:

  • HelloFresh is a German meal-kit provider with a now global presence. Funded initially by start-up incubator Rocket Internet, the company was modeled on a similar Swedish company Linas Matkasse.
  • HelloFresh offers a weekly subscription service to customers. Exact pricing is dependent on the number of people on each plan and how many different recipes are desired.
  • HelloFresh does not charge users to cancel or change their plans, but it will in some cases charge a re-delivery fee for unsuccessful deliveries.

Related Visual Concepts

Subscription Business Model

subscription-business-model
Subscription-based business models are built on a recurring customer base, where customers usually have access to the product or service rather than their own. The customer can have the upside of the service without owning the good underlying it, which is maintained by the company running the subscription-based business.

Ipsy Business Model

how-does-ipsy-make-money
Ipsy is a monthly subscription service for cosmetic and beauty products founded in 2011 by Michelle Phan, Marcelo Camberos, and Jennifer Goldfarb. Phan used her large YouTube following to launch and grow the platform. Ipsy makes money by charging customers monthly for beauty subscription boxes. Various subscription plans are available depending on the beauty product size and customization level. Ipsy also operates an eCommerce store selling branded and in-house beauty products. The company also sells product placement spots to brands eager to receive highly targeted exposure.

Birchbox Business Model

birchbox-business-model
Birchbox is an online American monthly subscription service for skincare, perfume, and other cosmetic items. Birchbox was among the first players to start leveraging a subscription-based model to reshape how value is delivered to customers. Instead of a one-off purchase, Birchbox curates a set of samples that each time are sent to its subscribers, enabling them to discover new cosmetic products while reducing the friction and cost of discovery for new products.

FabFitFun Business Model

how-does-fabfitfun-make-money
FabFitFun is an online subscription box service sending electronics, cosmetics, fitness, wellness, and fashion items every quarter. Founded in 2010, it started as a simple website, and as it gained popularity, thus following later on a similar subscription-based model to Birchbox. It now generates revenues through membership services and brand sponsorships.

Dollar Shave Club Business Model

dollar-shave-club-business-model
Dollar Shave Club is an American online subscription service delivering razor blades and grooming products monthly. The Dollar Shave Club business model flipped upside down the “razor and blade” model popularized by Gillette. In short, where Gillette sold its razors at cost while making fat margins on its blades, Dollar Shave Club offered a subscription model to cut off the costs and friction of getting new blades and grooming products with a curated package.

BoxyCharm Business Model

how-does-boxycharm-make-money
BoxyCharm recognized a gap in the popular beauty subscription box market. Most companies were shipping boxes with sample-sized products that were not on trend or seasonally appropriate. As a proponent of the subscription box business model, BoxyCharm makes money via subscription revenue.

Razor and Blade Business Model

razor-blade-business-model
The razor blade business model, also known as the razor-razorblade model, involves selling a product at a lower price to sell a related product later for a profit. The razor and blade business model was popularized by King C. Gillette, founder of the safety razor company Gillette, which sold a durable razor at cost while selling disposable blades at a premium.

HelloFresh Business Model

hellofresh-business-model
HelloFresh is a German provider of meal kits founded by Dominik Richter, Thomas Griesel, and Jessica Schultz (née Nilsson) in 2011. HelloFresh has a relatively simple revenue generation model. The company makes money by charging users a weekly subscription fee for meal deliveries.

Main Free Guides:

About The Author

Scroll to Top
FourWeekMBA