Pandemic restrictions could lead to more meal kit gains
The closing of restaurants combined with consumers having to stay home during the COVID-19 outbreak brought growth to meal kit provider HelloFresh during the first quarter of 2019 – growth that could signal further gains in the coming months for that company and its competitors.
HelloFresh revenue increased some 66.4% percent year over year in the quarter ended March 31, reaching approximately $754.8 million, the company said. The total number of active HelloFresh customers around the world increased 4.18 million, a year-over-year increase of 68.4%. In the U.S., growth was even more striking, as the meal kit seller’s active customer base increased to 2.64 million, an increase of 88.6%.
Many the first quarter gains for the company came during the second half of March as pandemic stay-at-home orders spread and restaurants and other businesses closed in the U.S. and around the world. "On top of our already very strong first two months of the year, our meals have attracted significant additional demand in the second half of March, as the global pandemic hit all of our markets in short order,” says Dominik Richter, co-founder and CEO of HelloFresh. “Especially in those times, it makes us proud that we were able to deliver 111 million meals to families throughout the world, allowing them to enjoy incredible home-cooked meals from the safety of their homes at a very affordable price point."
During the first quarter, the number of HelloFresh orders placed by consumers in the U.S. increased 82.2% year over year, to 8.95 million. Orders per customer in the U.S., however, dropped by 3.4%, to 3.4 orders per customer. And average order value remained pretty much steady, at about $52.6. Even so, HelloFresh adjusted its full year fiscal guidance, and now says that 2020 should bring year-over-year revenue growth of between 40% and 55%, up from 22% to 27%.
The impact of the pandemic is starting to show up in other first quarter financials from food retailers and meal kit providers. But not all such companies can point to signs of a Q1 sales bump, at least not yet. For example, Blue Apron, a HelloFresh competitor, recently said it has seen a significant increase in demand due to the COVID-19 pandemic, even though that demand was not fully reflected in Q1 earnings. The coming months will bring more clarity about how meal kit providers are really doing as this pandemic continues.