Startup Model – Delivering Weekly Meal Kits

The Model: A service where users can order weekly meal kits through a subscription purchase. The menus, ingredients, recipes, suppliers, packaging are decided by the startup and are based on the location of the users.

Startup Doing It: HelloFresh (German startup)

What I Like:

Core Idea – Curation added to Foodtech is a recipe for a big business.

Subscription – The customer is hooked on for a longer period. Also subscription makes managing the supply chain and forecasting customer demand easier. Since the purchasing can be done in bulk with more surety, the margins tend to improve as well.

Curation – Since the startup sets the menu, the hassle of ordering is reduced. Hello Fresh ensures that the meals are healthy, fresh and matched to the taste (through data analytics and location) of the customer.

Pricing – Since the meals are prepared by the startup, pricing and hence the margin is higher.

Control over Customer Experience – Since the startup is doing everything, from making the food to delivering it, it has more control over the overall experience of a customer and is not dependent on an external vendor.

My Concerns:

2 Business Models – Hello Fresh is basically running 2 models simultaneously. For every expansion, they need to set up a kitchen and a logistics setup. This will require more money and effort each time they scale.