HelloFresh on its shift away from discounting to drive sustainable growth

Meal-kit subscription brand HelloFresh is seeking to create a “more sustainable customer base” for growth going forward by moving away from focusing on discounts.

Instead, HelloFresh will aim to speak to families about what its proposition can offer them to meet their diverse needs, Patrick Stal, senior vice-president for international marketing. The brand is launching its largest integrated global campaign today (26 August) to underline the role it can play in families’ lives as kids go back to school

The brand exists in a category with some “pretty intense” messaging around discounting, Stal tells Marketing Week, something that it itself has taken part in. This was something that “made sense” a few years ago, but that no longer provides the basis for the kind of growth HelloFresh wants, he notes.

“I think discounting is a really great tool to introduce people to something new, to lower the barrier, but over time, it doesn’t create necessarily the world’s most sustainable customer base, and what we really want to do is create a more sustainable business going forward,” he says.

Discounts shouldn’t be at the heart of what we talk about as a business.

Patrick Stal, HelloFresh

HelloFresh generated $7.6bn in revenue last year, and is on track to deliver over a billion meals to customers globally in 2024. It is no longer a small venture. The meal-kit subscription market is no longer in its infancy either, meaning it is time to evolve, says Stal, adding that he expects to see more “maturity” come into the market as a whole in how it communicates.

While the recipe box category must move away from its current position of “activating like discounters”, promotional activity will continue to be an important tool in HelloFresh’s kit; for example, rewards for referring a friend to the brand will continue to be incentivised.

“Discounts shouldn’t be the heart of what we talk about as a business. I think we have a lot more to talk about, and interestingly, our customers expect us to talk a lot more about the things that make our experience unique,” Stal says.

Providing value in consumers’ lives

Its latest campaign focuses on unique families and the value that HelloFresh can offer to their lives. The TV ad that leads the campaign depicts a number of different families, with very different dynamics and interests, from a tennis-obsessed family to one in a home filled with modern art.

The creative brings to life in a “hyperbolic” manner the way that HelloFresh can suit a range of needs, says Stal; for example, through the variety of recipes that are available for consumers. The brand aims to fit into the diverse lives of its consumers. This was one of the reasons it chose to launch its largest global integrated campaign to coincide with the back-to-school moments, says Stal.

“We really looked at our customers’ lives and try to understand where we can offer the most help, and we see that there’s this unique moment of back to the school, where families sort of get back to normal, back into the rhythm,” he says.

HelloFresh can offer consumers help at this moment, he notes. It can help families to reintroduce structure into their lives, through easy home-cooked recipes to suit their tastes, after a summer break period that can be quite disruptive for families.

An ongoing education

While the meal-kit box category has matured significantly, there is still a role for education on the products and what they can offer consumers, say Stal.

“There’s still an educational element for the category,” he states. “Even in the UK […] and the category is quite mature in UK, but there are still billions of dinners consumed a year that are not meal kit dinners that I think we would like to compete for,” he says.

HelloFresh is trying to win in occasions where consumers might otherwise go to the supermarket, order in, or even eat out, he notes.

During the pandemic years, people staying at home helped drive trial for the category. In 2019, HelloFresh’s annual revenue was $1.8bn, by 2020, that had more than doubled to $3.8bn. Then in 2021, it generated $6bn of revenue, demonstrating the injection of momentum that the pandemic gave to the category and to the brand.

Stal points out that, while the pandemic gave rise to exponential growth in trial, HelloFresh has continued to grow.

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There is a lot of headroom to drive this sustainable growth, with many consumers having never tried meal-box kits before. Even for those who have tried HelloFresh, the brand can offer consumers a lot more than it could a couple of years ago, notes Stal. The ingredients, variety of the menu and digital experience are now a “different thing” than they were during Covid, he notes.

Post-pandemic, HelloFresh has also thought carefully about the ways in which it wants to grow.

“So, the question we’ve asked ourselves is, how and where do we grow from here, and how and where do we grow with customers that will enjoy our proposition for the long term?” Stal says.

HelloFresh wants to prioritise attracting a customer that is not just in it for the short term but who is actually going to become a longer-term subscriber to the brand, he notes.

When judging the long-term success of the campaign launched today, the brand will look to attract customers to it and keep them within it, says Stal.

“Our marketing is here to perform and to grow the business,” he says.

Cementing new assets

This campaign also introduces new aspects to the brand. The first is a new brand line, ‘Hello Dinner, HelloFresh’. In addition, it has introduced a new visual identity and the brand’s first sonic brand.

The brand line reflects the idea that, while HelloFresh can meet other occasions, dinner is where its proposition is most often used. The aim of the visual identity is to be bolder, while the brand aims to ensure its new sonic identity will, in time, become instantly recognisable.

“These new assets are not flukes,” says Stal. “They are here to stay, and we’re going to build a lot of equity into them.”