Dive Brief:

• HelloFresh co-founder Thomas Griesel hinted that the meal-kit company may extend into ready-made meals, telling a German newspaper, “we see a very big market niche.” 
• The company already offers some ready-made meals and snacks in vending machines in corporate offices in Berlin, but there are plans to expand those meals throughout Germany. 
• If HelloFresh were to expand into ready-made options, Griesel said the meals would be available online, not at supermarkets. 

Dive Insight:

If HelloFresh is looking to continue expanding its business, ready-made meals make plenty of sense. The company already has the culinary expertise and operational capacity in place, as well as a vending machine pilot in its corporate offices from which to glean hit-or-miss insights. 

It would also make sense for a company that operates in a convenience-driven category to go one step further to meet a demand for time-pressed consumers. Because of these on-demand lifestyles, the global ready meals market is expected to become a $143 billion category by 2023, growing at a clip of more than 10% through 2023. 

There is room for HelloFresh and its expertise to shake up this category. Most read-made meals in grocery stores are produced by the grocers themselves, meaning brands could have a chance to stand out. The timing is ripe, too, as the company experiences an abundance of momentum that recently pushed it past Blue Apron for the top spot in the U.S. meal kit space. HelloFresh’s global sales grew more than 50% last year.  

HelloFresh has already leveraged that momentum with its brick-and-mortar rollout scheduled for Ahold Delhaize’s Giant Food and Stop & Shop. While subscriptions still drive a majority of meal kit sales, in-store purchases grew by 27% last year, according to Nielsen. This in-store presence allows the company to better capture new customers and retain traditional consumers while saving on acquisition costs that have hindered subscription-based meal-kit companies. 

Offering the ready-made meals in stores would seem a natural fit, and HelloFresh may eventually do this after testing the new offerings online. The prep-to-eat time for its meal kits is typically 30 to 40 minutes, though the company, like many others in the space, has been focusing on meals that cut down on time spent in the kitchen.

Even without a definitive commitment that HelloFresh is going to add a ready-made line, Griesel seems to be plenty optimistic about his company’s chances in the space, noting that the “the quality and freshness of what is currently available is questionable.”