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.

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