HelloFresh Integrated Case Study: Growth, Sustainability Challenges

This integrated case study analyzes HelloFresh's challenges and opportunities. Initially, the company experienced significant growth due to COVID-19 lockdowns, but the central question is whether this growth can be sustained post-pandemic. The analysis identifies problems such as excessive plastic packaging impacting sustainability, high marketing costs affecting profitability, and the need to improve customer retention and cater to special dietary needs. The study employs models like the triple bottom line, AIDA, Porter's Five Forces, and consumer buying process to evaluate these issues. Recommendations focus on balancing profit, people, and the environment, adopting more sustainable practices, and refining marketing strategies to enhance competitiveness and customer loyalty. The case study concludes by emphasizing the importance of adapting to changing consumer behavior and prioritizing sustainable practices for long-term success.

Integrated case study
analysis

CONTENTS
INTRODUCTION......................................................................................................................1
Statement of the problem........................................................................................................1
Research aims and objectives.................................................................................................1
Structure of the rest of the report............................................................................................1
DESCRIPTION OF THE SITUTAION.....................................................................................2
Overview of the company and description of the situation....................................................2
Problems being faced by the company...................................................................................2
PROBLEM STATEMENT AND PLAN OF ANALYSIS........................................................2
Summarised statement of problem.........................................................................................2
Functional areas to which each issues belongs.......................................................................3
Literature review....................................................................................................................3
ANALYSIS AND FINDINGS...................................................................................................8
PROPOSED SOLUTION TO THE PROBLEM.......................................................................9
Recommendations................................................................................................................10
REFERENCES.........................................................................................................................12

INTRODUCTION
Statement of the problem
The overall sales of the company “HelloFresh” has grown because of the
implementation of lockdowns by the government in different markets, could this remarkable
growth will be maintained after the Covid-19 pandemic and whether the company will win
the sustainability battle going forward?”
Research aims and objectives
Aim
The main aim of the current research report is “to evaluate whether the HelloFresh
will be able to maintain the growth in their sales after post covid19 times and will win the
sustainability battle going forward”.
Objectives
For the purpose of fulfilling the above defined goals, there is a requirement of certain
small objectives and these are as follows:
 To evaluate the ways in which the covid19 has changed the behaviour of customers in
respect with the meal kit industry
 To analyse the impact of sustainability issues on operations of HelloFresh
 To determine the strategies that can be used by the company for maintaining growth
in a post pandemic time
 To recommend alternative solutions to HelloFresh for resolving the problems
Structure of the rest of the report
The structure of the present research report is as follows:
 Description of the problem – the next section will be going to offer an insight into
about the company and based on the interpretation of the case study, the problems
being faced by the company will be identified.
 Plan of analysis – In this part, the issues identified will be evaluated and relevant
literature review along with the concepts and theories will be conducted.
 Analysis and findings – At this stage, the problems and issues faced by the company
will be evaluated through using different models and techniques.
 Proposed solution to the problem – This will include alternate solutions to the
identified issues and recommendations which will include limitation and action plan
for the limitation.
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DESCRIPTION OF THE SITUTAION
Overview of the company and description of the situation
HelloFresh is one of the leading meal kit delivery services of UK that ships weekly
boxes of fresh ingredients along with the recipes for helping in making the mealtime easier.
The boxes contain pre-portioned ingredients for preparing the meals, garnishing, seasonings
and sauces. From past several years, the company has missed their profits targets. However,
by the end of the year 2019, HelloFresh was able to deliver profits (Auchard and Schuetze,
2017). The CEO of the company Dominik Richter along with his team was working tirelessly
for turning the company into the largest player. Because of the outbreak of the covid19
pandemic, the business landscape of the company fundamentally altered. It has triggered
alteration in the behaviour of the customers that has helped in marking the initiation of
outstanding growth of revenue for the firm. Millions of people were compelled to sat home,
as restaurants and hotels were completely closed due to imposition of lockdowns by the
government. This has offered an ideal setting for the company to grow their business because
it deals in home delivered meal kit (Aulich, 2020). This healthy meal kit of HelloFresh has
attained terrific success throughout the markets.
Problems being faced by the company
There were different problems that appeared to be important for HelloFresh. Firstly,
even though the sales of the company have grown due to lockdowns whether the company
will be able to maintain their profits post pandemic period. Secondly, the firm has already
invested a huge amount towards their sustainable strategy but heavy plastics are still utilized
in each of the box being delivered by the firm (Theresa, 2019)? Thirdly, because of stiff
competition and high marketing cost, the company was unable to make profits. Finally,
retention of the customers, building of market share and special dietary needs were some of
the problems being faced by the company.
PROBLEM STATEMENT AND PLAN OF ANALYSIS
Summarised statement of problem
The overall sales of the company “HelloFresh” has grown because of the
implementation of lockdowns by the government in different markets, however the main
concern is whether the company will be able to have same amount of sales post pandemic or
not. In addition to this, the company has excessive amount of packaging in their boxes which
is raising the sustainability concern. Even there is stiff competition and high marketing costs,
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due to which the profit margin of the company is not up to the market. Finally, the company
is also facing issues in retaining their loyal customers, building of market share and
considering the special dietary needs.
Functional areas to which each issues belongs
S.No
.
Functional
area of the
study
The problem Theory to be used
1 Strategic
management
Remaining sustainable as more
heavy plastics are used in packaging
of boxes
Three pillars of
sustainability or triple
bottom line model
2 Strategic
management
Maintaining sales after post
pandemic period
AIDA model
3 Marketing
High level of competition in the
market
Porters five force model
4 Marketing Marketing cost is too high The communication mix
5 Strategic
marketing
Customer loyalty Theory of reasoned action
6 Organizational
behaviour
Changing customer behaviour The consumer buying
process
Literature review
Three pillars of sustainability or triple bottom line model
Figure 1: Triple bottom line model
(Graffy, 2018).
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Sustainability is the major goal of each and every organization in the present business
world, yet measurement of the extent to which the organization is sustainable is not an easy
task. In this, regards a model known as the three pillars of triple bottom line is being
developed by John Elkington, which has gone beyond the outmoded measures of profits,
value of the shareholders and return on investment and included the environmental as well as
social dimension (Nwokah and Ahiauzu, 2018). This is being referred as an accounting
framework that integrates three important dimensions of performance that environmental,
economic and social. According to this model, it is essential on the part of the business to
prioritize their profitability and this should be the primary goal. However, the organizations
must also consider the way in which they are impacting people, stakeholders and values of
shareholders. Finally, it is equally important that the firm should take care of the environment
and remain sustainable.
AIDA model
Figure 2: AIDA model
(The AIDA model-the original sales funnel, 2020).
It is one of the most important theories of selling. The acronym AIDA stands for
attention, interest, desire and action. This model is generally being utilized in the sales
strategies by the organizations. the first step in the sales is to think about the ways of
attracting the customers. In this regard, the company should make use of different attractive
packages, advertising and promotion strategies for gaining the attention of the customers.
secondly, when the customers are aware about the product, it is important to augment the
potential interest level of the customers. maintaining interest is being regarded as the crucial
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part of sales process. thirdly, at this stage it is important to move the mindset of the consumer
and creating a desire and finally, the last stage is initiating action through inducing the
customers through sales call and other methods.
Porter’s five force analysis
Figure 3: Porter’s five force analysis
(Zhukova, 2021).
According to Kitchen and Proctor (2015), porters five force analysis is an important
tool for evaluating the competitive environment of the companies. It is a model that helps in
determining as well as evaluating the strengths and weaknesses of an industry. Through
evaluating the structure of the industry, it becomes easy for the companies to identify
corporate strategy. There are five forces which are evaluated for guiding the business strategy
for increasing the competitive advantage such as bargaining power of the suppliers,
bargaining power of the consumers, threats from substitute, threats of new entry and
competitive rivalries. This is an important model that allows the organizations to make
adjustment in their strategies for utilizing their resources effectively for generating higher
earnings.
The communication mix
As defined by (Kotler, Armstrong and Opresnik (2018), communication mix
encompasses all the tools the companies can utilized for communicating with their valuable
clients. This can be social media, advertising, product packaging, personal selling, direct
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marketing, sales promotion and public relation. An integrated and omni-channels campaign
can be created for effectively using all the areas. This also helps in reducing the marketing
cost of the company, if created in an efficient manner.
Figure 4: The communication Mix
(Marketing Theories – The Communications Mix, 2022).
Theory of reasoned action
Figure 5: Theory of reasoned action
(Foxall, 2016).
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According to Walsh and Lipinski (2019), theory of reasoned action emphasizes on the
association amid the behaviour as well as attitude within the human action. It is mainly
utilized for predicting the manner in which the individual behaves on the basis of the pre-
existing attitudes along with behavioural intentions. Furthermore, the theory also states that
the decision of an individual for engaging in a particular behaviour is based on the results
being expected by individual from performing a particular behaviour. In simpler sense, it can
be said that the consumer might only consider a particular action when given a reason for
believing there will be a particular desired consequence. In addition to this, from the time
when the consumer makes decision for moving forward with a specific decision to the
moment the action is finished, the consumer can alter their mindset or can chose a varied
course of action.
The consumer buying process
Figure 6: The consumer buying process
(Marketing Theories, 2022).
At the time of making purchase of any product, the consumer go through a five
sequential step. The first step is determining the problem and need of buying the products.
The second is searching for the information in which consumer makes efforts to search for
the options. Further, in the next stage, they evaluate the alternatives based on different
attributes. Moreover, then they make decision regarding the purchase and not to purchase on
the basis of the feedback and the last stage involves post purchase analysis wherein
comparison of the actual products and expected products is being done.
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ANALYSIS AND FINDINGS
As discussed above, the company is coming across with numerous problems. From
the very starting, the CEO of HelloFresh was not able to bring higher profits and growth for
the business. However, because of the lockdowns and restrictions being imposed by the
government, the sales of the company have grown tremendously. Even though, the meal kit
deliveries included heavy plastics in the packaging of each and every box, the consumers
ignored this during the pandemic as there was a fear of coming out from home and getting
infected (Heard and et.al., 2019). Thus, for the purpose of maintaining the sustainability goals
and for keeping the sales high in post pandemic, it is important that the firm must equally
prioritize their profits, people and the environment as per the triple bottom line model. It is
important that more sustainable practices should be adopted by the company so that they can
achieve an edge over the other competitors in the market. It was found on the application of
this model that is to remain sustainable it is important that all the three factors should be
taken into account. The more of any one element can impact the overall functioning of the
company.
On the other hand, from conducting the porter’s five force analysis, it has been found
out that the intensity of competition in the meal kit industry is very high. Further, the
bargaining power of the buyers is quite high as there are many players in the market and
switching costs is also very low (Walsh and Lipinski, 2019). Additionally, the bargaining
power of the suppliers is also moderately high as freshness of ingredients is the key factor in
the meal kit industry and thus, companies keep a good ties with the suppliers. Considering
this, it is important for the firm to diversify some of their portfolio for more revenue sources
as the threat from the substitute is also very high. It is important to extend the market share in
such markets where there is not strong supermarket giants and intense competition between
the rivalries. Further, the company is also required to have strong connection with the
customers for attaining an edge over the other firms operating in the same market.
Underpinning the discussion further, from the analysis of the case study, it has been
originated that the marketing cost of HelloFresh was very high. In this regard, when theory
and model were researched such as the communication mix than it was found out that it is
important for the company to have an integrated communication strategy. This can be social
media, advertising, product packaging, personal selling, direct marketing, sales promotion
and public relation. This will help in reducing the marketing cost of the company, if the firm
develops the strategy in an efficient manner (Kitchen and Proctor, 2015). In the present
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dynamic business environment, the company should consider and engage in such marketing
that covers wide range of people and cost minimal. Other than this, there was another issue
which the company was facing that is changing consumer behaviour and shifting of people to
other companies and supermarkets due to special dietary needs and excessive packaging.
According to the consumer buying behaviour process, it has been explored that there are five
stages through which each and every company passes while making the decision to purchase
a product or not. It is important on the part of HelloFresh to consider these stages effectively
for successful retention of the customers and gaining loyalty from them. The first step that the
company is required to perform is determining the problem and need of buying the products
after the pandemic gets over. The consumers are now becoming more health conscious and
thus, the special dietary needs must be recognized and products should be offered accordingly
(Kotler, Armstrong and Opresnik, 2018). The second is searching for the information in
which consumer makes efforts to search for the options which are available in the market. It
is crucial that the HelloFresh should offer exactly what the customer is desiring to have in his
or her product. Further, in the next stage the customer evaluates the alternatives based on
different attributes. Moreover, then they make decision regarding the purchase and not to
purchase on the basis of the feedback. The last stage involves post purchase analysis wherein
comparison of the actual products and expected products is being done.
PROPOSED SOLUTION TO THE PROBLEM
As identified and analysed above, there are different problems which are being faced
by HelloFresh. In order to solve these issues, some alternative solutions are being suggested
to the company which can be used for maximizing the sales even after post pandemic period
and to remain sustainable business. Some of the alternative solutions are as follows:
 Using social media – Since, it has been determined that the marketing costs of the
company is very high. This is because of the fact that the competition in the meal kit
industry along with the churning rates are very high and this compels HelloFresh to
make more investment in marketing activities (Ramanathan, Subramanian and Parrott,
2017). It is suggested to the company to make use of social media marketing such as
Facebook, Twitter and Instagram for making the people aware about their products
and services. Social media marketing involves no cost and covers wide range of
people. This marketing strategy will help the firm in saving their marketing cost.
 Recyclable and Reusable Materials – One of the pressing issues coming across in
front of the company is that heavy plastics are being used in packaging of each and
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every box being delivered by the company. It is important on the part of the company
to reduce this plastic waste and instead must make use of recyclable as well was
reusable materials. HelloFresh can reuse leftovers boxes, papers as well as cardboard
and convert them into products that can be used for another purpose like storing office
essentials or equipment. Even they can also recyclable materials in their packaging
like paper and moulded pulp (Guardiola, 2019).
 Meeting the special dietary needs, health and wellness – For successfully gaining
attention of the customers, increasing and maintaining the sales and for retaining them
for longer period of time, it is highly suggested to the company to offer products that
helps in meeting out the particular dietary requirements, health as well as weakness of
the customers (Richter, 2017). Because of the global pandemic and stressful modern
life, most of the people are demanding healthy products for balancing their life, diet
and work. Thus, it is crucial that HelloFresh must focus on offering products with
extra vitamins, probiotics, organic, gluten and lactose free and vegan products.
 Planning long-term relationship with the customers – For the purpose of maintaining
and ensuring post pandemic success, it is essential on the part of HelloFresh to plan
strategies for maintaining long-term relationship with the customers (Schanes,
Dobernig and Gözet, 2018).
From the above analysis, the best fit solution from all of the above is maintaining
good relationship with the clients. For this, the company is required to answer some of the
questions that is what journey should the client should go on, what experience is being
offered by the brand and how the company can extend the experience of the customers? In
addition to this, it is also important that the company should explore the social media
influence of the customers, must offer them value, respond to their concern and makes them
feel special.
Recommendations
Each and every research study has some or the other limitations so as in this study.
The first limitation of the current study is related with time constraint. Due to lack of time,
more extensive research was not conducted. Secondly, the scope and depth of discussion was
being compromised because of lack of experience of conducting studies. Finally, the aim and
objectives were being formulated top broadly which has decreased the level of focus of the
study. Thus, for the future research there is a need to develop an action plan. For the purpose
of increasing the level of focus of the study, research aim and objectives can be narrowed
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down. Furthermore, for managing time constraints, alternative research methodologies need
to be presented such as qualitative study which will save time. Finally, in regards with the
scope and depth of discussion, more studies need to be performed for gaining experience in
future research.
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REFERENCES
Books and journals
Auchard, E. and Schuetze, A., 2017. UPDATE 2-HelloFresh's bright start contrasts with Blue
Apron struggles. Reuters.
Aulich, S., 2020. Procurement, HelloFresh SE. Berlin, Germany: Personal conversation.
Foxall, G., 2016. Consumers in Context: The BPM Research Program. Routledge.
Graffy, E., 2018. Agrarian Ideals, Sustainability Ethics, and US Policy: A Critique for
Practitioners. J Agric Environ Ethics. 25. pp.503–528.
Guardiola, R.F., 2019. Paper Cool Pouch Guideline & Specification Sheet. Unpublished
internal document, HelloFresh.
Heard, B.R., Bandekar, M., Vassar, B. and Miller, S.A., 2019. Comparison of life cycle
environmental impacts from meal kits and grocery store meals. Resources,
Conservation and Recycling.147. pp.189-200.
Kitchen, P.J. and Proctor, T., 2015. Marketing communications in a post-modern world.
Journal of Business Strategy, 36(5), pp.34-42.
Kotler, P., Armstrong, G. and Opresnik, M., 2018. Principle of Marketing. 17thed. Pearson
Education Inc.
Nwokah, N.G. and Ahiauzu, A.I., 2018. Managerial competencies and marketing
effectiveness in corporate organizations in Nigeria. Journal of Management
Development. 27(8). pp.858-878.
Ramanathan, U., Subramanian, N. and Parrott, G., 2017. Role of social media in retail
network operations and marketing to enhance customer satisfaction. International
Journal of Operations & Production Management.
Richter, D., 2017. HelloFresh Knocks up a Recipe for Sales Growth. Financial Times.
Schanes, K., Dobernig, K. and Gözet, B., 2018. Food waste matters - A systematic review of
household food waste practices and their policy implications. Journal of Cleaner
Production. 182. pp.978-991.
Theresa, S., 2019. Applicability of bio-based polymer packaging in the meal kit context - A
case study with HelloFresh. Lund University Publications Student Papers.
Walsh, M.F. and Lipinski, J., 2019. The role of the marketing function in small and medium
sized enterprises. Journal of Small Business and Enterprise Development, 16(4),
pp.569-585.
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Online references
Marketing Theories – The Communications Mix. 2022. [Online]. Available through:
<https://www.professionalacademy.com/blogs/marketing-theories-the-
communications-mix/>. [Accessed on 22ndJune 2022].
Marketing Theories. 2022. [Online]. Available through:
<https://www.professionalacademy.com/blogs/marketing-theories-explaining-the-
consumer-decision-making-process/>. [Accessed on 21stJune 2022].
The AIDA model-the original sales funnel. 2020. [Online]. Available through:
<https://www.marketingcipher.com/the-aida-model/>. [Accessed on 22ndJune 2022].
Zhukova, N., 2021. Understanding Porter's Five Forces Model. [Online]. Available through:
<https://www.semrush.com/blog/understanding-porters-five-forces-model/>. [Accessed
on 21stJune 2022].
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