HelloFresh is selling fewer orders, but getting more value from the customers who remain. I’m not particularly surprised. I have been watching the subscription box grow up for a long time.
The card is the product. The ingredients were only ever the delivery mechanism.
Years ago, I launched one of the early subscription boxes in the UK. It had nothing to do with meal kits. Ours was a home-growing box: everything you needed to grow food at home, delivered regularly to your door. That might mean a balcony, a window box, a small garden or an allotment. The idea was that the box did more than deliver products; it removed enough of the difficulty around getting started that the habit itself became easier.
This was around the same period that a new generation of subscription businesses was appearing across food and lifestyle. SimplyCook arrived with recipe kits. Others followed with coffee, snacks, wine, beauty, shaving and eventually almost every category that could reasonably be put into a cardboard box and delivered through the letterbox or left on the doorstep.
What fascinated me then was not really the box. It was the relationship.
If somebody chose to subscribe, you no longer had to win them back from zero every time they wanted the product. You had permission to appear at their house again next month. You could learn what they liked, change what went into the box, increase the frequency, add something new and, if you did the job properly, become part of a routine.
That was the theory, at least.
So I wasn’t particularly surprised by HelloFresh’s latest numbers. The company reported that quarterly orders fell 13.7 per cent, from 25.3 million to 21.8 million, after deliberately reducing marketing expenditure. Revenue has been under pressure too. Yet average order value increased by 6.5 per cent in constant currency to €71, helped by premium recipes, product improvements and customers adding more to their boxes.
HelloFresh describes the strategy as a shift towards “higher quality” customers.
That phrase caught my attention because it tells us quite a lot about where the meal-kit business has arrived.
The first era of subscription commerce was obsessed with acquisition. How many people could you persuade to subscribe? How cheaply could you find them? What offer would make somebody try the first box? Venture capital and cheap digital advertising made it possible to chase enormous customer numbers, and the meal-kit companies became particularly good at it. For a while you could barely open a magazine, podcast or parcel without finding a discount code for dinner inside it.
The ambition was enormous. Meal kits were not presented simply as another way of buying food. They were going to reorganise the domestic kitchen.
Then the pandemic arrived and, for a period, it appeared they might.
When the box became the kitchen
There was a moment during lockdown when the meal kit looked almost perfectly designed for the world we had suddenly entered. Restaurants were closed, supermarket visits had become difficult and millions of people who had previously outsourced large parts of their eating lives were back in their kitchens.
The meal kit solved several problems simultaneously. It brought food to the door, gave you something to cook and removed the daily question of what that something should be. Choose on a screen, open the box, follow the instructions.
HelloFresh’s growth during that period was extraordinary. Revenue more than doubled in 2020 and the company delivered hundreds of millions of meals. By 2021 it was approaching a billion meals a year.
Looking at those numbers then, it was easy to assume that a permanent change had taken place. Grocery shopping had moved online. Restaurants had moved onto apps. Perhaps dinner itself was about to become another subscription.
But domestic food habits are difficult things to replace.
The supermarket is still incredibly efficient. So is the takeaway. So is opening the fridge and making something from whatever happens to be there. Sometimes we want to cook properly; sometimes we want beans on toast. Sometimes somebody shops on the way home. Sometimes the plan changes at six o’clock.
A household is not a perfectly predictable consumption machine, however much the technology around it would like it to be one.
That, I think, has always been the tension inside meal kits.
They are extremely good at solving dinner, but dinner does not always want solving in the same way.
I never thought the box was the clever part
Perhaps because I had built a subscription business myself, I always looked at meal kits slightly differently.
The physical box was necessary, but commercially the valuable thing was the place you had earned inside somebody’s routine.
With our growing boxes, once someone had decided they wanted to grow food, there were all sorts of sensible things that relationship could eventually contain. Different seeds, seasonal products, tools, advice, additional growing projects. The original purchase created the opportunity for everything that followed.
HelloFresh is now doing a much more sophisticated version of the same thing.
The meal kit gets the company into the kitchen, but once it is there the commercial question becomes: what else can travel through that relationship?
Premium recipes. Add-ons. Breakfast. Snacks. Extra proteins. Prepared meals. Different eating occasions. Across the wider HelloFresh group there are now businesses extending into ready-to-eat food, premium meat and seafood, pet food and other categories.
That makes the latest rise in average order value particularly interesting. Fewer orders do not automatically mean a weaker business if the people who remain spend more, stay longer and buy from more categories.
The logic has shifted from how many households can we acquire? to how valuable can each household become?
That is a very different stage of the subscription story.
The customer changes before the product does
There is a phrase businesses use when growth starts becoming expensive: customer quality.
It sounds harmless enough, but what it really means is that not every customer is equally valuable.
Some arrive because the first box is heavily discounted and disappear as soon as they have to pay full price. Others order sporadically. Some remain for years, regularly add extras and choose the more expensive options. The latter group can support a great deal more infrastructure than the former.
HelloFresh is explicitly saying it wants more of those customers.
And perhaps that tells us something about what the meal-kit category actually became.
During the expansion years, the underlying question was whether meal kits could become a mass-market replacement for part of the supermarket shop. The customer-value strategy suggests a different destination: a smaller but more committed group of households prepared to pay a premium to remove friction from cooking.
There is nothing insignificant about that market. But it is not quite the same thing as changing how everybody eats.
In fact, I suspect meal kits work particularly well for a very specific contradiction in modern food culture. We want to cook, or at least we like the idea of cooking, but we increasingly resent the administration around it.
Planning meals is work. Shopping is work. Remembering what is already in the cupboard is work. Deciding what everybody wants on a Wednesday evening can sometimes feel like more work than actually making it.
The meal kit removes much of that invisible labour while leaving enough cooking behind for us still to feel that we made dinner.
That is a surprisingly sophisticated product.
What has also changed is the meaning of convenience.
The early language of meal kits was often about simplicity: the right ingredients, the right quantities and an easy recipe. But once customers understand the basic service, there are only so many ways to make chopping an onion more convenient.
So the proposition naturally begins moving upwards.
Better ingredients. More interesting recipes. Premium proteins. Greater choice. Add-ons. Personalisation. Health requirements. A slightly nicer version of the evening meal.
HelloFresh’s rising average order value suggests that this is working with at least part of its customer base. The company is no longer simply monetising convenience; it is monetising the opportunity to upgrade convenience.
I recognise that progression because most good subscription businesses eventually encounter it. Acquisition gets you started. Retention makes the economics work. Expansion makes the customer valuable.
The box is simply the vehicle.
Did meal kits actually change how we cook?
This is the question that interests me more than whether HelloFresh sells 21 million boxes or 25 million.
I think they did change cooking, just not in the way the early growth curves suggested.
Meal kits helped normalise the idea that the weekly menu could be selected through an interface. They taught millions of households to accept fresh ingredients arriving through parcel-style logistics. They turned recipes into a service and made the planning of dinner something that could be outsourced to a platform.
Most importantly, they identified where a great deal of the friction in domestic cooking actually sits.
It isn’t necessarily at the stove.
It is everything before the stove.
That insight has survived even where some of the extraordinary pandemic growth has not.
What meal kits have not done is make the supermarket redundant or turn every household into a subscriber. Instead, they have become another layer in an increasingly complicated food system: supermarkets, restaurants, delivery apps, ready meals, meal kits and whatever happens to be left in the fridge all competing to answer the same basic question.
What are we eating tonight?
From subscription box to kitchen platform
Looking at HelloFresh now, I think the more useful way to understand the company is not as a meal-kit company but as a business trying to own a recurring relationship with the kitchen.
The distinction matters.
A meal-kit company ultimately has to keep selling meal kits. A kitchen platform can use that relationship to sell many different solutions to the problem of eating at home.
This is why I wasn’t surprised to see the company reducing acquisition spending while trying to increase the value of existing customers. At a certain point, mature subscription businesses stop asking how many boxes they can push through the system and start asking how much of the customer’s life can sensibly fit inside the box.
I remember thinking about a primitive version of that all those years ago with seeds, soil and things people could grow on a windowsill. Once somebody had invited us into that part of their life, the opportunity was not simply to send them another packet of seeds. It was to help them grow more.
HelloFresh is discovering the same principle at enormously greater scale.
The meal-kit revolution may therefore be settling into something less dramatic but commercially more revealing. It hasn’t replaced the weekly shop. It hasn’t made dinner completely predictable. It hasn’t turned every kitchen into a subscription kitchen.
Instead, it has found the people willing to pay to make one difficult part of everyday life easier, established a recurring relationship with them and begun working out how much more valuable that relationship can become.
Perhaps that is what comes after disruption.
Not everybody changes.
But the people who do become very valuable indeed.
Kitchens as Platforms — Eat Your Screen
Eat Your Screen is a book about how the screen changed what we eat — published a chapter at a time while it is still being written, alongside a weekly dispatch on the culture it is about.
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