HelloFresh growing more rapidly and profitably than any other online grocer?

The world's biggest meal kit maker (and online grocer) HelloFresh, has seen its growth rates decline. However, despite the decline in growth, HelloFresh was able to grow by 18.6% on top of Q4/2021, which still had lockdown behaviour.

The growth of 18,6% is also strong taking into account that HelloFresh revenues are approaching eight billion euros in overall annual revenues.

The growth came from increased average order value that was spurred by the increasing inflation. At the same time, the number of active customers and the number of orders declined from a year ago.

The profitability of HelloFresh improved slightly due to cost consciousness in fulfilment expenses (share of the revenue from 41% to 39%) and marketing.

The growth of HelloFresh was especially driven by the US business, which grew by almost 30%, whereas the international business grow only by 6%. The International segment was impacted by the first closure of a market as the company withdraw its operations from Japan.

It will be interesting to see how fast HelloFresh is able to grow as it has already reached quite a significant scale. However, this scale is big only for a meal kit company or an online grocer. In terms of future growth, HelloFresh has significant upsell potential with the ready meals that the company has started to roll out alongside meal kits.