Dive Brief:

• Meal kit maker HelloFresh announced Wednesday the launch of HelloFresh Market, an online store featuring add-on meals and grocery items, in the United States.
• The new online market, which debuted recently in Europe, offers breakfast options, quick meals, pantry essentials, fresh produce and more that customers can add to their weekly order from the meal kit company.
• The U.S. launch of HelloFresh Market follows continued sales and customer growth in the U.S. for the German meal kit company as it looks to expand its operations globally.

Dive Insight:

As meal kit companies face declining sales growth coming off their pandemic-fueled recent peak, HelloFresh is introducing a marketplace strategy aimed at building out purchases beyond its core dinnertime offerings.

This includes breakfast and lunch options, as well as "everyday essentials" like snacks and spice blends that shoppers may want to stock up on at the same time they're picking their suppers for the week ahead.

"The company’s goal is to service as much of the at-home food consumption as possible, and the Market allows HelloFresh to capture a larger share of customers’ overall food budget, especially as Americans are embracing online grocery more than ever," a company spokesperson noted in an email.

In this way, HelloFresh is expanding beyond a traditional meal kit maker into more of a "food solutions group," as the spokesperson noted. The company said in the announcement it’s “significantly expanding” its options across categories after seeing a “strong link” between the size of its product range and the proportion of customers buying add-ons in Belgium, the Netherlands and Luxembourg, where it first launched HelloFresh Market. In that region, HelloFresh Market offers more than 150 add-on items.

The company is hoping to see similar results in the U.S. and said in the press release that HelloFresh Market’s range of options will roll out to all U.S. customers over the coming months. 

In its most recent earnings report, HelloFresh said it added more than 1 million active customers in the U.S. and saw sales rise 37% during the first quarter of 2021. The meal kit supplier is poised for further growth in the U.S. as it ramps up its production and distribution capacity. HelloFresh plans to open a nearly 440,000-square-foot production center in Phoenix later this year, following new facilities in Georgia and Texas. Last year, the company bought Factor75, an Illinois-based supplier of ready-to-eat meals oriented around health and wellness.

HelloFresh is also set on scaling its business globally. Earlier this year, the company announced its rollout of Green Chef, the New York-based organic meal kit company it acquired in 2018, in the U.K. — the latest expansion of its U.S.-only brands to international markets.

Coresight Research predicts the growth rate for meal kits will drop from almost 70% in 2020 to 18.2% in 2021. That's a significant decline, but still well ahead of the growth rates the firm outlined for the grocery market as well as online food and beverage.