HelloFresh CEO Discusses the Future of Meal Delivery Service

So I've obviously known TOA for quite some time and Nico, the organ, basically the main man behind the organization, approached me a couple of months ago if I want to support it. I basically said yes straight from the start because I think it's a very unique concept. It's very different to a lot of other startup conferences and I think it's really a very worthy case to support and I'm super happy to be here and actually see it live.

I'm not so much of a conference guy to be honest. I've obviously done my fair share of conferences over the years. I think it's especially important if you want to raise funds, if you want to get your startup in front of investors, etc. But like I said, I've never seen a conference like TOA and I think that's the kind of unique approach that I really liked. Having been in tendi last year and knowing a lot of people that have been and always told me this is a very different conference, and that's why I think it's such a unique one, right?

So the vision for HelloFresh is really to say if you are someone who can commit to cooking at home, then we want to make it as easy and as accessible for you to actually do that. The way that it works at the moment is basically you subscribe to a plan and then once per week we deliver a box full of pre-portioned ingredients with all the recipe cards that you need to actually cook a number of meals straight to your doorstep. And then within 30 minutes you can basically cook nutritious and delicious meals at home. So really trying to remove all the friction, all the barriers that people might have to home cooking that makes it very convenient.

Well, like when we started out, we were I would say a business that catered to a very niche market because the service and the product as we had it in the beginning is very different to what we have right now. When we started out, it was basically us saying we only deliver to couples, we only do three meals per week, you cannot choose or pick which kind of meals you want to have, we don't cater to different lifestyles. But over time, what we've done is really kind of tried across different dimensions to innovate and to say we want to be able to deliver to different household sizes, we want to be able to offer you a menu of let's say eight meals or ten meals per week where you can actually choose which ones you want to have. We want to offer it at different price points. We've introduced a more competitive family offering. So I think over time we've just broadened our customer segments and I think going forward you can also expect to see a lot more of that. So really the goal is to say if you like home cooking, then no matter your household size, your budget restrictions, or your dietary preferences, we want to be able to send you an awesome product that you love.

I'm very much a foodie myself, yeah. So I'm super interested in all the stuff that's going on. I think there's so much stuff going on right now and also cooking has been a big passion for myself. I've always been very worried about the kind of use of ingredients and the kind of ingredients that you get when eating out, especially when going for a cheap dish or something like that. So I've always tended to cook a lot at home because I just wanted to know where does my stuff come from, wanted to have that transparency. And when we then came up with the model for HelloFresh, we basically built it around a lot of the things that we couldn't find anywhere else and where we said this is what the consumer of the 21st century really wants. And yeah, they want to know where their ingredients are coming from, how healthy they are, how nutritious, and how well they go together. And if you talk to people, I think a lot of people actually say you know I don't want to rely on processed foods, I don't want to do takeaway all the time. It's actually quite expensive to take away all the time, but it's also quite hard to do home cooking if you need to run the shop after hours or think about a new recipe. All of those things: will I actually make it? Will I be able to create it? How long is it going to take me? I don't want to do that stuff on a weeknight after I came home from work. And that's basically all the pain points that we want to address one by one.

So we made a conscious decision to come to Berlin. I came to Berlin about 5 years ago with the firm goal I would like to start my own business. Always felt very entrepreneurial, had started businesses before. Came with my two co-founders to Berlin because we said that's the best place to start a company. We were all German speakers, so basically we said do we want to do it in Berlin or do we want to do it in London? We actually lived in London before, grew a little tired of London, knew a lot of guys that were just starting up in Berlin and felt like this is an ecosystem that's developing, that's evolving. And within Germany, I don't think there is any other place that's close to Berlin. Even in Europe, very, very few.

It feels a lot less risky for good people to actually join HelloFresh. And at the same time, it still feels like there's a lot to be done over the next couple of years, so it's not the end of the journey. So I think what we can offer at the moment is really to say great city that we're headquartered in, we can offer competitive salaries and good packages, plus it's really an awesome company, an awesome concept that has a lot of opportunity to grow further. So I think that has helped us a lot in the last 12, 18 months to attract a lot of good people through the company. And I think the abundance of great people that want to join us is much, much greater now than it has been like two or three years ago.

It's actually a question that every now and then pops up and where we have evaluated what are the opportunities out there or not, but it's not something that we're concerned with on a daily or weekly basis. In the end, we obviously want to create a great return for our investors, for ourselves, for the management, for all employees that are incentivized with stock options or equity. But in the end, I would say we're basically focused on getting maximum value. We're not so much focused on getting maximum value for the next six months but for the long run, because I think what all investors will buy into is saying we want to be part of a large successful company. If that takes three years, five years, or eight years, that doesn't matter so much, rather than saying we want to be part of something really big and really successful.

So I think there will certainly be, as in any industry, there will certainly be businesses that go out of business, others that are successful, etc. But overall for the space, I'm really bullish on the food space because I think that a lot of new concepts that merge make sense are actually so much better for consumers than what they used to historically. And hence I think that because it's such a big category, there is ample space for actually a lot of great companies to emerge. I'm sure that HelloFresh will be a very successful and a very good one and kind of leading the pack, but I also think that it's not mutually exclusive to other companies operating in that food space also becoming very successful.

Generally, we do think that HelloFresh and people working for HelloFresh apply the greatest care and have the greatest passion for the product. That's why when we think we can do something very well, we also want to do it ourselves because we do think that somebody having instilled the HelloFresh culture will apply more care and will apply more attention to the product quality than some outsider. So from a strategic perspective, we want to own as many steps as possible of the value chain. But obviously it needs to make sense economically and it needs to make sense in terms of the buzzword I guess as opportunity cost. So where do you actually want to spend your time? You don't want to spend your time on everything. You want to pick those areas where you can make a difference, where you can create a competitive edge. And figuring that into the equation then means that there is a lot of parts that we want to do ourselves but not all of them.

I think what we've definitely learned is that things tend to take a little longer than anticipated in the beginning. But that's something that really has that enormous hockey stick growth curve then it basically hits you and you can't really prepare for that. So I think that's definitely one of the lessons that you learn. You come up with a plan, you start implementing that plan, and a lot of times you're like why doesn't that work right from the start? Why is it not like 5,000 customers coming in through the door first time? It's a great product, etc. So things take time. And in the end, it's a marathon, it's not a sprint. It does feel like a sprint in a lot of different occasions just because there are so many things that you need to get done till tomorrow, till end of the week, till end of the month, etc. But in the end, you're really in it for the long run. And being in it for the long run also means that the way that you treat customers, the way that you flexibilize your offer, the way that you let them customize the offer, all of that needs to make sense over the long run. Optimizing for the next three months or the next six months, at the beginning maybe you need to do it because you don't have so much cash runway, etc. But at some point, it's really about becoming the best brand and it's about becoming the best company for your long-lasting customers. And that means having a time horizon over which you apply certain decision-making processes of 3 years, 5 years, etc.