Page 22 - Food&Drink July 2019
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channel to buy food. Many other verticals – toys, electronics, fashion – have already moved large parts of their business online. “For toys, forty-two per cent is online, fashion is around thirty per cent. Groceries, globally is only three per cent. The bridge to online is just starting,” he says.
The company is benefitting from this consumer catch-up effect as they now discover grocery shopping can be much more convenient, he says.
“There’s two consumer trends that we see. One is that people think and identify cooking from scratch as being something healthy and desirable. The second is that people are increasingly time poor.
“Pre-prepared meals solve that conflict. Even though you’re busier than ever before, it doesn't prevent you from bringing a home cooked meal on the table.”
The US is further along than Australia in adopting online grocery shopping and Amazon has been a catalyst for that behaviour, he says.
“It’s been beneficial for us, even though we don’t compete directly with Amazon or online
supermarkets. But we benefit from behavioural change as consumers get used to buying fresh groceries online.
“The more people get used to the idea, the more they see us as a valid option to solve a very specific problem, which is, what are we going to cook tonight.”
Before Marley Spoon, Siegel ran the largest online food ordering market place, Delivery Hero. He sees adjacent behaviour between something like UberEats and Marley Spoon. “On average, a customer in the delivery space uses takeaway one and a half times per month. With Marley Spoon, on average a customer cooks with us nine nights a month. It’s a weeknight cooking service.
“I remember from my Delivery Hero days, the peak day in take-away – when roughly fifty per cent of all the week’s orders are made – was on Sunday. It’s adjacent behaviour.”
Siegel says the company is focused on growth in existing markets. “I think everywhere where people cook and have the habit of weeknight cooking our service is superior to the way supermarkets operate, the opportunity is there.
“On the other hand, today we are already operating in three regions. Today, 177 billion households could buy a Marley Spoon box. However, at the end of Q1, we had 190,000 active customers. Our market penetration is around 0.13 per cent – imagine if we had one per cent market share. We’d be at a billion in sales.
“We don’t see the need to grow into new geographies in order to capture or build a billion dollar business.
“I think the exciting thing is it’s day one. It’s very early in the business that we’re building. We have 1000 team members across three regions building a business that in January, if you analyse the revenue, is close to $200 billion Aussie dollars in sales. This is just day one.” ✷
Hijinks between co-founders Fabien Siegel and Till Neatby.
On 7 June, Woolworths Group announced a $30 million investment in Marley Spoon.
It was via a $23 million senior secured convertible note and $7 million issue of Marley Spoon shares. Woolworths will subsequently own around nine per cent of the company.
The convertible note is structured to allow Woolworths to participate in the growth of Marley Spoon’s Australian growth. It has an initial
exclusive term of five years. Woolworths Group CEO Brad
Banducci says: “This partnership gives us exposure to the high- growth ready-to-cook meal kits segment and aligns with our ongoing goal of meeting our customers’ needs for healthy and convenient meal solutions.”
Marley Spoon had demonstrated a customer focused, innovative and entrepreneurial culture, Banducci says.
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