The infectiously enthusiastic Luke Grob is director and head of product and innovation at HelloFresh, the UK’s leading cook-from-scratch delivery service. Produce Business UK popped in to his central London head office to see what makes him and the fast-expanding company tick
The HelloFresh website informs its customers of the firm’s belief that “everything positive in life starts with great food and that everyone should have access to the highest quality ingredients and the knowledge to cook them”.
So no surprise that the office is a hive of positive activity, with people buzzing about on their mobile phones, chatting excitedly around their desks and holding what certainly look like impromptu tasting sessions in the trendy kitchen.
Grob himself is no different – clearly up for whatever the challenge throws at him, he is energetic and eager to learn. Unusually for an interviewee, he asks as many questions as he’s asked during our hour-long conversation. He’s frank too, as you’ll find out in the course of this interview.
The HelloFresh model is based around 12 recipes, five Classic, three Vegetarian and four Family Box. Every customer on the books each week gets a choice of three from five.
The recipes, beautifully illustrated and with step-by-step guides to cooking them, are delivered, along with the precise ingredients direct to the customer’s door. They are created by top-class chefs and preparation time is within 30 minutes.
OK, so that’s set the picture. But what’s at the centre of everything, of course, is the produce that goes in each HelloFresh box that’s delivered. The first question I ask Grob is what products top his list in terms of importance.
“Meat and produce are the most important items in our boxes,” he answers. “They are the main ingredients we are judged on. That can be difficult because for many British consumers, when they receive an online delivery of vegetables, previous experience [with online retailers] means that their default position is to expect problems.
“We started off HelloFresh with a mission to change the way people eat forever. We stand or fall on delivering the highest quality ingredients to thousands of customers every week and our job is to make them realise that what we are putting in our boxes is the best quality they can get.”
As with any start-up, there have been issues over the years; Grob admits, for instance, that onions have been the product he has found hardest to perfect. Now, thanks to a link-up with Parrish’s Farm in Bedfordshire, he is getting to the bottom of the matter. “Naively, I thought an onion was an onion and I never expected onions to be a problem,” he admits. “But we were buying them in 20kg bags and having to throw away a lot.
“I met James Parrish, explained what our problem was and was very honest about everything. We operate with an open book, we have relatively long lead times and we buy good volumes. He’s on board with us now and already we’ve made good progress – now we’re working out how we can tell his story.”
Keeping waste to a minimum is a big driver of the tight forecasting model and Grob says HelloFresh is making giant strides in this area. “Last week, we fed our entire customer base in the UK and ended up with half a pallet of produce left over.” That’s not typical, of course, he says, adding that the company does have outlets through the partners it works with for any product that isn’t sold. “We are always looking for ways to optimise everything and a zero waste supply chain is a realistic aim,” he adds.
Produce partners
HelloFresh is working closely with Stubbins Food Partnerships, using the company’s Waltham Cross facility as its produce hub. “It was crucial to partner with a specialist who shared our vision and our passion for customer-centric attention to detail,” says Grob. “We look forward to growing our relationship with Stubbins Food Partnerships for years to come.”
He adds, however, that another priority over the next few years is to develop close, personal relationships with a select group of growers. Already in the welcome booklet that is sent to all customers are affectionate testimonials to two Isle of Wight growers – The Tomato Stall and The Garlic Farm, and they sit alongside Yorkshire based potato grower Linroyale and R&G Fresh Herbs own-brand Nature’s Flavours, from the south east of England as torchbearers for the HelloFresh philosophy.”
That approach cuts both ways. “The key thing for us is that we work with growers and together we can tell a story that gives our customers confidence in what they are putting into their bodies and educates them on why this is nutritional,” says Grob. “We want to work with people who are ethical and responsible, people who have a lifetime of expertise and a real pride in what they do.
“With the Tomato Stall for instance, we started out as a tiny customer for them, but very quickly we have become one of their largest customers and in time we want to be able to reinvest as part of the ecosystem of the company. They introduced us to The Garlic Farm and that’s working in the same way.
“So far, we have been lucky I suppose that we have managed to meet and speak to the right people,” he adds. “Word of mouth has been really useful – I find that’s still very important in the vegetable sector.
“We’ll always be looking for new suppliers. I still get excited when I meet them and get a good feeling. I believe in the adage that if you don’t trust someone, you shouldn’t work with them, but if you start to work with them, you have to give it 100% trust. What am I looking for? I want to know whether they are passionate about their product, how knowledgeable they are and what inspires them. It’s all about us partnering up with people who add the product knowledge, expertise and experience that we don’t have yet.”
Grob is threatening a ‘scooter tour’ of the UK to drop in on growers unannounced and find out about their businesses that way. As he once spent nine and a half hours shelling peas to fulfill orders when a plane failed to take off in Kenya, it’s pretty safe to say his threat is not an idle one.
“It would be great of course if all of these suppliers found us, but at least half of the fun is finding them ourselves.”
As is always the case with a 12-month business, even one that as yet does not sell fruit in any big volume, overseas supply is a valuable part of the mix. “We have made a big push to sell as much British produce as we can, and the booklets we send to our customers focus on that, but of course we have to operate a global supply chain,” Grob says. “I think maybe we’ve fallen into the supermarket trap of trying to brush that under the rug – I don’t want us to do that. We have suppliers of vegetables around the world and their product is fantastic.
“We want as much of the product we sell as possible to be sustainable, homegrown or bought through a British supplier. But what’s most important is that we find the best supplier of each product at all times. I want to be championing the right people with the right ethos.”
Serving the full spectrum
HelloFresh’s own customer demographic is a broad church, says Grob, all the way through the Aldi shopper to Waitrose aficionados. “Whichever retailer they shop with, they have extremely high expectations of what they want their produce to look like when it arrives. We’ve argued about in the office many times – I think that the number one thing is taste and if the vegetables are mis-shapen then that shouldn’t be a problem, but the supermarkets in the UK have, rightly or wrongly, built a level of expectation of appearance that is not going to disappear.
The buying, technical and culinary teams are expanding fast. In the last few weeks, Laura Altham has joined from M&S as head of buying and Rose Chaffe came in from Sainsbury’s as head of supply chain. “I was interested to see what they would think about the suppliers we’ve already got on board as they have come from a retail background,” Grob says. “But they have met most of them now and thankfully, they agree that we have chosen wisely. We have gone for who we believe are the crème de la crème of producers.
Head chef Patrick Drake, a former Goldman Sachs lawyer-turned-chef who co-founded the company with management consultant Ed Boyes three years ago, has been both entrepreneurial driving force and developer of the recipes for HelloFresh from day one. He will soon be responsible for a much larger culinary team, as the expansion plan includes wider menus, even more targeted recipe development and, amongst other things, the addition of fruit into the mix.
“We’ve got peaches in one of our recipes in the next few weeks and if I’m honest, I’m dreading it,” jokes Grob. “It’s the first time fruit has been part of the equation and it is going to present us with different challenges, but we’re confident now that we’ll get it right.”
HelloFresh stocks between 18 and 26 produce items at any given time and Grob says his eventual aim is to have a specified grower in place for each of the core lines. “This is where we do have an advantage over a supermarket,” he says. “We don’t have 50,000 SKUs to manage and forecasting is a much tighter and easier job. I could tell you now within 5-10% what I will need to order in eight weeks time.
“Because we are in control of that and have very clear margin expectations across our box of products, I am able to set prices at a level where realistic fluctuations won’t hurt us. I am not in a position where I have to constantly be looking to drive prices down. We buy a bundle of goods for each box, so if I set a worst case scenario price I will pay for, say, broccoli and the price stays below that, I’m happy. But I know that once the price rises above that maximum level, I can’t be profitable. As long as I can forecast margin well enough in advance, we’ll be fine.
“We are selling at supermarket prices, but we are giving our customers better product – that’s difficult, it requires good planning.”
That works for the grower too, he says. “The produce business is tough enough and working with the supermarkets can be ruthless. I think we are a more consistent type of customer. With a good understanding of each other’s needs, we can grow together and build real long-term relationships.”
And as those relationships grow, Grob envisages improvements on the operational side too. “We are buying in bulk now, but delivering in retail pack sizes, and that requires us at this stage to work with a large packhouse. One of the main things we try to instill into the packers, who are all supermarket shoppers of course, is if they wouldn’t pick it up off a supermarket shelf, it should not be going in our box. But as we get bigger, I see that [function] moving back to the farm.”
Customer focus
While growers and chefs are crucial to the HelloFresh vision, it wouldn’t be anywhere without its customer base. London is a large sales area, with hotbeds of activity in the Home Counties and cities including Oxford, Cambridge and Edinburgh. A massive ramping up in advertising is spreading the net wider and HelloFresh continues to drill the data to better understand its customers.
“We are continually trying to work out our demographic, our customer profiling and segmentation,” says Grob. “We know who our core customers are now, but we have no desire to focus in on those groups and ignore the rest of the market.” It’s the broad church referenced earlier in this article that interests Grob. “That’s the joy of what we’re doing – everyone needs to eat. We’re not just selling them recipes, but the chance to spend half an hour together talking while they are preparing their food, or time to sit around the table together eating it. Spending time together is a lost family trait and if we can give that back to people while they eat healthy, nutritious food then we’re really achieving something.”
Nothing is left to chance by the rapidly evolving business, with all products and meals sampled and tested constantly, and a perpetual, bordering on obsessive search for the views of customers. As I sat in reception, one of the team was detailing some of the most common feedback to whoever was hanging on the other end of the line [I’d tell you what he said, but then they’d have to shoot me!].
“We get detailed feedback. We may be a food delivery business, but we are also a data business,” Grob says. “Every week, we receive thousands of customer comments, ranging from constructive feedback on products and packaging to complaints. We log everything in our ‘feedback loop’ and analyse it to see where we can improve things down the line.”
Customer retention is strong, he adds, and again, his team is continually trying to improve it. “The way to do that of course is to fine-tune our recipes, source better products and design better packaging. We want to provide our customers with a magical experience that can’t be bested, time after time – so they don’t have any choice but to come back.”
