HelloFresh is an outlier in the online grocery market

Contrary to majority of its online grocery peers, the German meal kit company continues to grow rapidly. Many online grocers have struggled to reach growth on top of the exceptional Covid numbers. The last six months have been especially brutal for the pandemic era darlings, such as rapid delivery companies. The rapid delivery companies have been laying off people in droves and closing markets to focus only on the core markets. HelloFresh is an outlier in all that.

What?

Very robust growth of 26% on top of 60% growth in Q2/2021. THe trailing 12 month revenue in Q2/2022 is 162% higher than two years ago (the first pandemic quarter).

Profitability of HelloFresh has returned to pre-pandemic 7,5% level. Despite the decline this a a very high level for an online grocer or any kind of grocer.

Of the HelloFresh business segments, the growth has been driven by the US segment, which continues to grow at a 37% rate.

What does this mean?

Despite the rapid growth in the US, HelloFresh has a lot of upside in the market. Even when accounting the marginal nature of meal kits, the US market with X trillion in grocery spend offers huge potential for the company.

The leadership of HelloFresh has also shown great aptitude in opening new markets. That also brings great upside as the company keeps on reinforcing the foundation. This way HelloFresh is not reliant on the possible downturns in individual markets.

Meal kits as a category seems to have suffered severely from the ending of the pandemic. Well-managed HelloFresh stands out in the meal kit. It is smart strategic move by the leadership to start extending the company from pure meal kits to cover the grocery needs more broadly