Dive Brief:

• Meal kit provider HelloFresh announced it will add 100 positions to its IT and tech departments, according to a news release. The positions will be added to the company’s Berlin and New York offices.
• The company is looking to hire front- and back-end engineers, UX/UI analysts, quality assurance engineers and product developers.
• “At HelloFresh, we see our IT department as the backbone of our business. It drives innovation, product excellence, master personalization, and offers variety. We have the best talent on board already, and are now looking to grow the team significantly, across our two biggest offices, NYC and Berlin,” Nuno Simaria, HelloFresh’s Global Chief Technology Officer, said in the statement.

Dive Insight:

HelloFresh’s hiring spree stands in contrast to the freeze recently implemented by competitor Blue Apron. That company, which also recently fired its top human resources executive and saw its chief operating officer depart in late July, has struggled to regain momentum following a disastrous IPO in June.

Interestingly, HelloFresh’s hires may be in preparation for its own public offering. The company, which is based in Germany, reportedly tried to go public on the Frankfurt stock exchange in November 2015, but pulled the IPO due to concerns over its high marketing and customer acquisition costs. Owner Rocket Internet has said that HelloFresh needs to go public in order to grow.

On the plus side, HelloFresh is growing rapidly across Europe and America, fueled by investment capital and by innovative offerings like new 20-minute meals that offer pre-chopped and pre-prepared ingredients.

However, HelloFresh is struggling with many of the same challenges as Blue Apron. This includes high customer acquisition and marketing costs. HelloFresh spends a lot of money on its sales force, including door-to-door salespeople in cities like London. This would be worthwhile if customers spent a lot once they became loyal customers, but research shows that average spending by meal kit consumers is declining. HelloFresh is also spending a lot to fulfill its orders, according to an analysis by Business Insider.

HelloFresh’s biggest problem, though, may be the competition. In addition to a free-for-all of online startups, the company must square off against Amazon — which recently began testing meal kits for two in Seattle — and grocery retailers. Grocers like Kroger and Publix have begun offering their own meal kits in stores, and plan to grow their offerings. According to Nielsen, grocery meal kits racked up $80 million in sales last year, and should bring in much more this year.

Realizing the potential to save money and grow sales through a physical retail presence, HelloFresh partnered with British grocer Sainsbury’s earlier this year to offer £10 meal kits for two. This sort of partnership may be necessary for meal kit companies to survive, and there’s already been rumblings of a major deal in the U.S. grocery industry.