Hello Fresh Pivots Strategy

Hello Fresh recently announced a new strategy after receiving its second profit warning in five months, citing higher marketing expenses and costs of investing in its ready-to-eat business, reports Reuters.

The revitalization strategy includes plans to bolster its ready-meal delivery arm to offset the stagnating revenue of its core meal-kit operations. The initiative includes a goal to boost revenue from ready meals by 50 percent in 2024. Analysts estimate the ready-meal side accounts for 20 percent of sales.

Union Investment, HelloFresh's 12th largest shareholder with a 2.9 percent stake in the firm, said the reboot was management's "last chance" to restore credibility, according to the report.

"If this [does] not succeed, a change will be urgently needed," said Union Investment's portfolio manager Christian Reindl.

Sebastian Patulea, an analyst at investment banking firm Jefferies’ said that, although ready-to-eat meals are rife with opportunity, it’s unclear if they can make up for the loss of meal-kit revenue, or if it can be expanded into Europe. Full Story