HelloFresh Australia has reached an agreement to acquire BeCool Refrigerated Couriers, which provides logistics services for a number of meal kit companies, including rival meal kit provider, Marley Spoon.
Managing director and chief operating officer for HelloFresh, Manutea Dupont, declined to specify the terms but said they are beneficial to both parties.
The acquisition is a significant win for HelloFresh as Marley Spoon pursues an IPO in Australia. The AFR reported it is seeking $70 million, giving the meal kit company a $199.5 million market valuation.
Given the challenges of last-mile delivery and perishable goods, meal kit companies are highly reliant on logistics providers, and BeCool is a lynchpin in both HelloFresh and Marley Spoon’s operations.
HelloFresh claims to be BeCool’s largest client. It noted in a statement that the logistics company also handles 100 per cent of logistics for Marley Spoon. Marley Spoon could not be immediately reached for comment.
HelloFresh said it plans to evaluate whether it will continue providing logistics services to BeCool’s clients once the transaction is complete. Internally, Dupont anticipates the vertical integration will lead to significant cost savings and top-line growth.
“For HelloFresh the benefits come around securing the supply chain,” he told Inside Retail. “It’s been one year since HelloFresh opened their own production facility, and the quality of the product has improved significantly – and ultimately enabled mid-double digit top line growth while strengthening the bottom line. HelloFresh expects to see similar improvements to our customer experience and financials with this further move to own the supply chain.”
HelloFresh chief executive Tom Rutledge said the acquisition ensures stable operations, which are crucial for the growing e-commerce food business. HelloFresh currently delivers 2.5 million meals around Australia every month, and has expanded its delivery network beyond capital cities to include suburban and regional areas.
The Australian arm is part of HelloFresh Group, which is headquartered in Berlin and listed on the Frankfurt Stock Exchange. In the Group-wide earnings report released this month, HelloFresh Australia reported a 50 per cent increase in revenue in the quarter ended March 31, 2018 and said its current run rate is well in excess of $200 million.