‘It’s bittersweet’: how recipe-box brands are managing unprecedented growth

The Drum 02 Apr 2020 06:30
Mindful Chef

Overnight, meal-kit company Mindful Chef has gone from bringing in around 150 new customers a day to over 2,000. This colossal growth has been powered by the UK government’s response to the coronavirus pandemic and subsequent lag in supermarkets to stock shelves quickly. But it’s presented a unique challenge for these start-ups: how to scale quickly in a national lockdown.

“It’s a very scary time for the world, but it’s also propelled services like ours into the mainstream,” Giles Humphries, co-founder of Mindful Chef, tells The Drum.

Humphries set up the meal-kit company in Devon in 2015 alongside two friends with the aim of delivering healthy recipe boxes which are gluten-free, dairy-free and contain no refined carbs. It’s grown steadily in weekly subscribers since then and now operates from a factory in Birmingham. In the last few weeks, demand for its meals has soared.

A noticeable increase in traffic came on Sunday 15 March, says Humphries, the last ‘normal’ weekend for many Brits. Restaurants, bars and cafes still remained open but most mass events had been cancelled, headlines highlighted how panic-buying was decimating supermarket shelves and predictions of nationwide school-closures were beginning to surface. The country finally looked to Italy and Spain and realised what was in-store.

“We would normally on board around 150 new customers a day. On 22 March we saw 2,500 and it’s not showing any signs of slowing down, even as the supermarket shelves are stocked,” Humphries continues. “It’s mind-blowing levels."

Despite shares having gained almost 40%, it’s being more cautious with any long-term projections and has kept its 2020 guidance for revenue growth at between 22% to 27%. It declined to comment to The Drum ahead of its 5 May financial update when it will give a full picture on the impact the coronavirus has had on its global business.

“We’ve seen a surge in orders. We’ve tripled sales, and some days it's quadrupled. Though it’s early days and probably just a spike,” Savelli says.

The rapid rate at which people have subscribed to meal-kit brands to see them through the lockdown period has presented an unusual problem for these companies – how to scale quickly and safely with minimal contact.

"At uncertain times like this, the community is of utmost importance and we want to encourage those in the local area whose working arrangements have been affected by recent events to get in touch,” said chief executive Laurent Guillemain. “We're taking all the necessary measures to ensure that the health and safety of our customers, employees and product is prioritised.”

“Right now, I’m in the office which includes our warehouse kitchen,” says Savelli. “We’re here with masks on, we wash our hands regularly, stay two meters away from each other, and we’re measuring the temperature of everyone before they come in. We don’t have lunch together. We’re restructured packing operations to keep people away from each other. We’ve also divided into four teams so that should someone get ill we can still have the business moving forward.”

At Mindful Chef, its customer service team has doubled in the past week to manage the orders it’s processing. The need for staff on site is also desperate but with the closure of chains like Pret and Eat as well as the grounding of airlines, the company been able to recruit many workers facing the prospect of job loss.

Much like finding staff to fuel these booming businesses, it’s been surprisingly easy to find the food supply to keep up with demand.

“There is plenty of produce out there; restaurants and bars account for a huge amount of food eaten every week. So, there’s all of that food in the chain that needs to be redistributed. Right now the supply chain is backtracking and trying to serve companies like ours which has seen a massive surge in demand which just takes time.”

Thoughts at these companies are squarely on managing the increased load and ensuring that customers get their food delivered in a timely manner. But slowly, as we move further into this crisis, thoughts will turn to how marketing will maintain levels of interest as well as retain the first time users flocking to their services.

“We have come to the realisation in the past couple of days that any form of modelling is being blown out the water. We need to allow this time to keep delivering meals, and then we’ll see where the land lies in a few weeks before we start forecasting and making marketing plans,” he says.

Conversely, Savelli at Pasta Evangelists is not killing its marketing plans but has abandoned its push into TV, OOH and events-based marketing in favour of a tried and tested digital strategy.

Despite the “fortuitous” implications of Covid-19 on his business, Savelli has ensured one initiative has been pushed through at lightning speed in order to support those most vulnerable.

“In a heartbeat we made that happen and it’s a noble cause, irrespective of coronavirus, that we’ll continue after this period has ended.”

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SavelliHumphriesHelloFreshGiles HumphriesPasta Evangelists
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