HelloFresh is investing $US70 million to have AI help plan dinner
The Berlin-based company announced on Monday a $US70 million ($108.45m) investment in its menu subscriptions.
The funds will more than double the number of meals on offer and increase the range of star proteins such as beef and seafood. It will also bolster the use of AI technology to streamline decision making during ordering, even as the choices for recipes increase.
The refresh is taking place for customers in the US, its biggest market; the company says it will enhance product offerings in other countries at a later date.
In 2024, the group delivered over 511 million meals in North America, which also includes Canada.
The investment is intended to enhance brand loyalty and bring in customers in the face of inflationary food pressures, says Assaf Ronen, HelloFresh group president in an exclusive interview with Bloomberg.
While '$US70 million is a very large check,' he says, 'the more we invest in customers, the more they stay with us.'
HelloFresh sees opportunity as Americans cut back on dining out amid rising food prices. The company is currently valued at around €1.5 billion; at its peak in 2021, it hit €16.7 billion as a result of the pandemic.
According to a series of recent company polls, including one among 5000 customers, nine out of 10 respondents said they're planning to eat more at home in the upcoming year. And 58 per cent of respondents said they're bored with what they eat every night.
To that end, a major portion of that $US70 million will be used for a broad expansion of weekly meal offerings, from 45 to more than 100.
Customers will now be able to start cooking dishes like seared salmon with couscous, spiced vegetables and lemon yogurt, and eggplant caponata pitas with mozzarella.
There's more premium meat cuts, including grass-fed rib-eyes and whole chicken thighs, and triple the amount of seafood will be available with no upcharge; depending on location, subscription prices might range from about $US60 for two two-serving recipes per week, including delivery, to about $US370 for six recipes for six people weekly. The cost-per-serving runs from about $US10 to $US11.50.
The company is also including the option of more seasonal produce and more specialty products, like nutritional yeast and kimchi. Upcharges will be in place for options like multi-course meals and platters.
Portion sizes will also generally increase, says Mr Ronen (look no further than Reddit's HelloFresh thread if you want to discuss).
Some sides will increase by 50 per cent while some proteins will be 20 per cent bigger. There will also be increased customisable options for swapping out ingredients, like chicken for pork.
Mr Ronen, who was vice president of the Alexa division at Amazon.com a decade ago, says AI technology will help customers navigate the expanded menus and prioritise selections.
'What's at the top of your list will be more relevant for you.'
The more each customer orders, the more the system will Netflix-style prompt meals that reflect your preferences-for instance, recipes that take five minutes versus 50 minutes in the kitchen.
Mr Ronen won't confirm how much meal prices will go up in response to these improvements, but he says when they take effect in September, they won't be relatively higher than price increases in the broader economy.
'Pricing is something we're always looking at. In some places, there is a price increase, but it's lower than the rise in inflationary food prices,' he says.
Upgrades in HelloFresh's 30-plus distribution centers worldwide will also be implemented with the investment.
The company will install humanoid-style robots in warehouses to speed up the meal kit packing. In the future, Mr Ronen says HelloFresh will increase its use of robotics: 'We look at this refresh as our big first step but not as a last step.'
He claims that there's no plan to cut the company's workforce. But 'the more we do, the more we need robots to meet demand. It's about not needing to grow employees three times' in the future. Or, he says, 'its just going to take people longer to get their meals.'
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