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HelloFresh's Wild Success Story Is a Complicated One

How the No. 1 meal-kit company on the planet got to the top
By Newser Editors,  Newser Staff
Posted Jun 27, 2018 5:30 PM CDT
Updated Jul 1, 2018 10:30 AM CDT
An undated photo provided by HelloFresh shows a HelloFresh dinner kit.   (AP Photo/HelloFresh)

(Newser) – Blue Apron's fall from grace is well known: Since its 2017 IPO, shares are down 70%. So why is competitor HelloFresh sitting so pretty? That's the question Burt Helm seeks to answer for Inc., a question that took him to Berlin to meet the company's 32-year-old co-founder Dominik Richter. He was recruited by German internet tycoon Oliver Samwer to launch the company in 2011, Samwer having noticed a Swedish meal-kit company was doing exceedingly well and worth imitating. Now HelloFresh is the one doing exceedingly well: It's worth more than $2 billion, is the No. 1 meal-kit company on the planet, and expects to see sales rise by a third this year. Richter tells Helm that data is driving the success—enabling it to better market, distribute better meals, and expand its offerings. It's not that simple, finds Helm.

He writes that he found a story of "aggressive marketing tactics, health department complaints, threats of violence, hard drugs, dumb money, and, at its center, founders who have been so relentlessly focused on growth, they've barely stopped to consider what happens when they actually win." The speed with which it entered new markets was "breakneck," but by 2015, as the company was going nationwide in the US, Blue Apron was still shoulders ahead. By June of that year, five US operations managers, the COO among them, had quit. A "free-for-all" followed, per one former employee, who said workers hid beer in the ceiling. After the bathrooms were vandalized at its New Jersey warehouse, Porta-Pottys were brought in. And then there are the retention-rate issues. But the VC cash kept flowing. Read the full story for much more on HelloFresh's issues and its successes.
(Read more Longform stories.)

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