- HelloFresh is on track to double its production capacity around the world over the next 15 to 18 months, the German meal kit company announced Thursday.
- The company has also boosted its revenue expectations for fiscal year 2020, and now expects global revenue to grow between 107% and 112%, up from a previous range of 95% to 105%. HelloFresh also believes its revenue will grow a further 20% to 25% next year.
- HelloFresh is in the midst of an expansion initiative fueled by the pandemic, which has helped its business surge in the United States and internationally.
In a reflection of the importance the United States plays in its business, HelloFresh said it plans to expand product lines that have until now been limited to this country to customers in other parts of the world. Those brands include Green Chef, an organic and vegan-focused brand the company acquired in 2018, and Every Plate, which is centered on low-priced options. Factor, the health-focused line Hello Fresh is gaining as part of its recent Factor75 acquisition, is also set for international distribution.
In addition, HelloFresh intends to broaden its assortment and expand in the lunch and breakfast markets, where it has not previously focused its efforts. The company said it plans to invest in automation systems to help it achieve its goal of serving a larger variety of customers.
HelloFresh added that it expects its profitability in 2020 to be higher than previously anticipated. The company raised its projection for adjusted earnings before interest, taxes, depreciation and amortization margin this year to between 12.5% and 13.5%, up from 11.25% to 12.75%. That figure is likely to fall between 9% and 12% in 2021, HelloFresh said.
HelloFresh’s latest announcements about its rapidly growing business, which the company made in conjunction with an investor presentation, come as it continues to bolster its operations in the face of rising competition.
The company is up against multiple competitors looking to strengthen their positions in the meal-kit segment of the food market. This includes Freshly, which Swiss food company Nestlé acquired in October in a deal worth nearly $1 billion, and Blue Apron, which has been reshaping its executive ranks as it looks to regain its footing after a shaky 2020. Kroger-owned Home Chef has also raised its game, earnings executive call-outs in recent earnings reports and announcing in November a pair of new product lines.
In November, HelloFresh said it would acquire Factor75, an Illinois-based purveyor of ready-to-eat meals, in a transaction worth up to $277 million that is set to power HelloFresh’s ambitions in the United States — home to half of its customers. The combination brings several new production facilities to HelloFresh, along with access to a large swath of potential new customers.