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Anyone else surprised by Blue Apron and Hellofresh making the list? I can't imagine there are two multibillion dollar food recipe delivery subscription compani

Anyone else surprised by Blue Apron and Hellofresh making the list? I can't imagine there are two multibillion dollar food recipe delivery subscription companies. Is this as crazy as I think it is?

gpvos 11y ago
Food is pretty important in people's lives.
- organsnyder 11y ago
  That doesn't stop ~60% of new restaurants from failing, though.
  - AnimalMuppet 11y ago
    It doesn't stop grocery stores from having something like 1% margins, either.
troels 11y ago
Hellofresh is a Rocket Internet clone, so not too surprising that it looks exactly like Blue Apron.
- arthurpaul 11y ago
  Not a clone. Hellofresh was founded in 2011 ( http://goo.gl/Dct4ZY http://goo.gl/Dct4ZY ) and BlueApron in 2012 ( https://goo.gl/gCQ3SI https://goo.gl/gCQ3SI )
  - rahimnathwani 11y ago
    "HelloFresh is actually a clone of Swedish company Middagsfrid" https://www.cbinsights.com/blog/rocket-internet-clone-funding/ https://www.cbinsights.com/blog/rocket-internet-clone-fundin...
whazor 11y ago
HelloFresh has a montly sales of 20 million. Lets assume they get a margin of 40% (which is just my guess). Then they can pay off these investments within 31 years. And I did not even consider their rapid growth.
- jpatokal 11y ago
  40% sounds hysterically optimistic. Typical margins in the restaurant business are around 3%, and while HelloFresh's model and costs are obviously pretty different, they're still grappling with restaurants as competitors and dealing with many of the same problems: supply chain management, perishable product, hygiene and quality are a major concern, labor-intensive business, etc. Also, given the rate at which HelloFresh is throwing around free boxes and discount coupons and special offers here in Australia, I would be astonished if they're profitable at all.
  - koliber 11y ago
    It depends if you are talking net margins or gross margins.
    - jpatokal 11y ago
      The previous poster's calculation of taking 31 years to earn a billion at 40% of $20m/month assumes net margins.
  - jon-wood 11y ago
    Its a massively profitable business model (at least once you've got the initial momentum building via discounts and freebies out of the way). Lets look at their "Classic Box" (https://www.hellofresh.co.uk/food-boxes/classic-box/ https://www.hellofresh.co.uk/food-boxes/classic-box/), which is £39 a week for three meals. I priced up what I could see of the box contents using Hubbub (https://beta.hubbub.co.uk https://beta.hubbub.co.uk) - largely because I work there, and so know my way around, and it came to a little over £20, and that's without any real effort to match the portion sizes they're shipping, I could probably get it down to more like £15 just by buying just the amount of each ingredient needed for the meals being made, and going direct to the producer rather than via high street shops who are going to be adding their own margin. That leaves, pessimistically about £20 to cover delivery, and the customer's share of central costs such as recipe development, packing, and the usual business expenses of a web based company. At the sort of volume they're doing, I could see them easily making 40% profit, and potentially more than that.

Anyone else surprised by Blue Apron and Hellofresh making the list? I can't imagine there are two multibillion dollar food recipe delivery subscription companies. Is this as crazy as I think it is?

gpvos 11y ago

Food is pretty important in people's lives.

organsnyder 11y ago
That doesn't stop ~60% of new restaurants from failing, though.
- AnimalMuppet 11y ago
  It doesn't stop grocery stores from having something like 1% margins, either.

troels 11y ago

Hellofresh is a Rocket Internet clone, so not too surprising that it looks exactly like Blue Apron.

arthurpaul 11y ago
Not a clone. Hellofresh was founded in 2011 ( http://goo.gl/Dct4ZY http://goo.gl/Dct4ZY ) and BlueApron in 2012 ( https://goo.gl/gCQ3SI https://goo.gl/gCQ3SI )
- rahimnathwani 11y ago
  "HelloFresh is actually a clone of Swedish company Middagsfrid" https://www.cbinsights.com/blog/rocket-internet-clone-funding/ https://www.cbinsights.com/blog/rocket-internet-clone-fundin...

whazor 11y ago

HelloFresh has a montly sales of 20 million. Lets assume they get a margin of 40% (which is just my guess). Then they can pay off these investments within 31 years. And I did not even consider their rapid growth.

jpatokal 11y ago
40% sounds hysterically optimistic. Typical margins in the restaurant business are around 3%, and while HelloFresh's model and costs are obviously pretty different, they're still grappling with restaurants as competitors and dealing with many of the same problems: supply chain management, perishable product, hygiene and quality are a major concern, labor-intensive business, etc. Also, given the rate at which HelloFresh is throwing around free boxes and discount coupons and special offers here in Australia, I would be astonished if they're profitable at all.
- koliber 11y ago
  It depends if you are talking net margins or gross margins.
  - jpatokal 11y ago
    The previous poster's calculation of taking 31 years to earn a billion at 40% of $20m/month assumes net margins.
- jon-wood 11y ago
  Its a massively profitable business model (at least once you've got the initial momentum building via discounts and freebies out of the way). Lets look at their "Classic Box" (https://www.hellofresh.co.uk/food-boxes/classic-box/ https://www.hellofresh.co.uk/food-boxes/classic-box/), which is £39 a week for three meals. I priced up what I could see of the box contents using Hubbub (https://beta.hubbub.co.uk https://beta.hubbub.co.uk) - largely because I work there, and so know my way around, and it came to a little over £20, and that's without any real effort to match the portion sizes they're shipping, I could probably get it down to more like £15 just by buying just the amount of each ingredient needed for the meals being made, and going direct to the producer rather than via high street shops who are going to be adding their own margin. That leaves, pessimistically about £20 to cover delivery, and the customer's share of central costs such as recipe development, packing, and the usual business expenses of a web based company. At the sort of volume they're doing, I could see them easily making 40% profit, and potentially more than that.