With its acquisition of Chefs Plate, HelloFresh aims to become Canada’s market leader in meal kits.
Toronto-based HelloFresh Canada said it expects to garner a 60% share of the meal kit market next year, with projected revenue from the two brands totaling $200 million (Canadian).
HelloFresh Canada, part of Berlin-based HelloFresh, bought Chefs Plate for undisclosed terms last month. The company said it expects to leverage its global scale and realize synergies to spur growth and bolster the brand positioning of Chefs Plate.
"Looking into the new year, we're very excited about the growth to come for the HelloFresh and Chefs Plate family, as well as for the meal kit industry in Canada more broadly," Ian Brooks, founder and CEO of HelloFresh Canada, said in a statement. "The 2019 projections on revenue and market share only reinforce the market data that's been released on meal kits."
Citing research from The NPD Group, HelloFresh noted that meal kits are among the fastest-growing food segments in the Canadian market. Since 2014, the meal kit business in Canada has more than doubled to reach $120 million in sales, with over 600,000 meal kits being delivered to Canadians per month, according to NPD.
HelloFresh also pointed to findings that indicate a greater willingness among Canadians to replace traditional meal options with meal kits. For example, before the emergence of meal kits in the marketplace, 47% of consumers would have prepared food at home, 31% would have purchased food from a restaurant and 18% would have bought a ready-made meal at a supermarket, NPD research revealed.
"We are proud to be the Canadian market leader in meal kits and to be changing the way Canadians eat," Brooks added.
To make its meal kits more accessible to consumers, Toronto-based Chefs Plate plans to cut prices to as low as $8.99 per serving starting in early December, according to CEO Jamie Shea.
"By lowering cost, we open up meal kits to Canadians who might've seen price as a barrier while continuing to increase the value of our product and long-term customer satisfaction," Shea stated.
The companies see the dual-brand strategy as enabling them to better cater to Canadian customers by providing meal kits for every need.
Chefs Plate kits provide pre-portioned ingredients and easy-to-follow recipes to help consumers make dinner in 30 minutes or less. Each weekly menu includes recipes serving two to four people, 15- and 30-minute preparation, and vegetarian and non-vegetarian options. Meanwhile, HelloFresh — which delivers to all provinces — bills its “cook from scratch” meal kits as carefully curated recipes with locally sourced, fresh ingredients that take care of the meal planning, shopping, measuring and delivery for consumers so they can focus on the cooking and eating. The brand offers Pronto, Family and Veggie meal kit lines.
In its most recently completed quarter, HelloFresh said it delivered 46.5 million meals to 1.84 million active customers worldwide.
The company also has made moves to boost its U.S. market share. In June, HelloFresh meal kits made their retail store debut at Ahold Delhaize USA supermarket chains Stop & Shop and Giant Food. And in March, HelloFresh acquired Green Chef, a Boulder, Colo.-based organic meal kit service, which also caters to people on specific diets, such as vegan, gluten-free, Paleo and Keto.
In 2017, HelloFresh’s U.S. revenue soared 90.1% to about $674 million. The company also more than doubled its number of active customers (to 890,000), orders (to 3 million) and meals delivered (to 20.7 million) in the U.S. Figures for Canada, part of the International business segment, aren’t broken out.