board box—premeasured groceries, step-by-step recipe instructions, and the almost-realized fantasy of a home-cooked meal.
But then, as quickly as the category mushroomed, it began to
fall apart. “There aren’t a lot of people looking at funding meal-kit companies anymore,” says Ellie Wheeler, a partner at Greycroft and an investor in Plated, which sold to Albertsons for an
estimated $200 million in September. “It’s a tough ride to still be
invested in one of those.” VCs are now abandoning the category,
also-rans are getting snapped up, and Blue Apron, the one-time
leader, now limps along, sales declining, its stock down 70 percent from its 2017 initial public o;ering.
Yet soaring high above this fray, seemingly unscathed, is
HelloFresh. The German upstart posted global sales growth
of more than 50 percent last year and expects sales to increase
another 30 percent in coming months, as it pushes past
$1.3 billion in global annual revenue. This year, after lagging
far behind Blue Apron in the U.S. for most of its entire history,
HelloFresh caught up and overtook it, making it the No. 1 meal-kit company in America as well as the rest of the world. The
company went public in November 2017 in Germany, and as
of presstime, is worth more than $2.3 billion.
So how has HelloFresh managed to defy the fate of its competitors? Richter explains the startup’s strategy as he would one
of its recipes: His team finds the target customer, busy families
(by examining data); fine-tunes the e;ciency of the marketing
e;orts (by collecting lots of data); improves the quality of the
recipes (using insights drawn from, yep, more data); expands
the range of the o;erings to cater to even more customer segments (thanks to even more insights and even more data).
But in reality, HelloFresh’s history is far more complicated
than his just-add-data-and-stir formula. It involves hundreds of
millions of venture capital dollars, aggressive marketing tactics,
health department complaints, threats of violence, hard drugs,
dumb money, and, at its center, founders who have been so
relentlessly focused on growth, they’ve barely stopped to
consider what happens when they actually win.
“Master multitasker? Heat up a second pan in Steps 4 and 5 to cook
multiple ingredients at the same time and shave off a few minutes.”
—From “Korean Beef Bibimbap With Zucchini, Mushrooms,
and Carrots,” HelloFresh recipe WK 44 NJ- 12
Inside the defunct wholesale bakery in Berlin that now houses HelloFresh’s headquarters, the decor is hardly subtle in reminding you that, yes, this is a fresh-food company. Farmers’ market–style, green- and-white striped awnings shelter rows of com- puter monitors. Farmhouse tables are a folksy contrast to the industrial concrete floors, while
stacks of empty cardboard HelloFresh boxes—looking like they
might at any minute be loaded up with mahi-mahi and shipped
o;—double as makeshift walls throughout the open o;ce. The
co-founders’ o;ce is set apart from all this charm. Lofted in the
back, inside a sparse, glass-walled conference room, are Richter
and Griesel, silently pecking at their laptops, in mission control.
“You’d go up the stairs and there was a glass container, with
Dominik and Thomas sitting in there, not talking to their employ-
ees, making sure no one is socially
interacting with them,” recalls Simon
Schmincke. In September 2012, the
months-old startup was plotting its U.S.
takeover. Schmincke—one of Rocket’s
which the company made available
for rent to its startups—was hired to
become HelloFresh’s new U.S. CEO.
Before flying stateside, Schmincke had
embedded himself at HelloFresh’s head-
quarters to soak up intelligence, but was
surprised to discover he’d have little
contact with the co-founders. “After two
weeks, I’d seen Dominik maybe 30 or 60
minutes total,” says Schmincke. “I was
like, ‘Dude! You’re flying me to the U.S.
I’m running your company. Should we maybe have co;ee?’;”
Up until then, Richter and Griesel, the company’s COO,
were doing what they had been recruited to do: act as “execu-
tion machines,” as former employees have described them.
They had managed to hatch HelloFresh at stunning speed,
shipping its first box within three months, and shortly there-
after sending advance teams to Paris, London, Amsterdam, and
Sydney to launch, simultaneously. By the summer of 2012, as
word got out of the coming launch of Blue Apron and Plated
in the U.S., the founders decided they needed to open an o;ce
in New York City, too—and sent Schmincke.
Following the Rocket playbook, the advance teams were typically made up of other young generalists, often former bankers
and consultants, or Rocket’s own entrepreneurs-in-residence. To
gin up enthusiastic press, these outposts sometimes cast a photo-
Staff used drugs and drank alcohol in the open, according to three employees who witnessed
these activities or found empty bottles and drug paraphernalia.