Marley Spoon to Disrupt Aussie Grocery Retail

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By Published On: February 7, 20181 Comment

Marley Spoon is riding the wave of success when it comes meal kits. Its business model is expected to disrupt supermarket giants Coles and Woolworths as the popularity of home cooked meals and healthy lifestyle choices rise.

Berlin-based Marley Spoon says it’s moving into 2018 following an exciting year of milestones, growth and innovation. Operating in Europe, the US and Australia, the e-commerce start-up has seen sales more than double from 2016 to 2017. Part of that impressive growth, according to Marley Spoon, can be attributed to its vast expansion in Australia.

Having launched in Sydney in April 2015, the online business now delivers its meal kits to five states across the country, covering 75 percent of the population. The launch of its second fulfilment centre in Victoria has enabled deliveries to be expanded to Adelaide in South Australia, and a partnership with Coles has provided it with an additional retail opportunity.

According to IBISWorld, the fresh ready-meal market in Australia has experienced an annual growth rate of approximately 3.6 percent over the last five years, with the industry now worth $600 million. IBISWorld says this is probably due to the rise of health-conscious people and the growing demands of time-poor consumers or those who are living alone.

And, the latest data from the Australian Bureau of Statistics further reflects this. As all categories of retail sales fell over the December 2017 trading period, food retailing was the only one that rose (0.7%), according to the ABS retail trading figures released yesterday.

Supermarket Woolworths has already commenced its strategy in trying to capture this growing market. Last week Woolworths announced its new meal kit concept – Ready to Create bags are now available in its newly launched Ready to Go section, which aims to offer convenience for customers who want to cook great recipes from scratch without the hassle of shopping for all the ingredients. Ready to create is the first meal kit concept available at a mainstream retailer in Australia allowing customers can pick up a bag in-store.

But, Marley Spoon may have a leg up with its online business model which is expected to take a market share from Coles and Woolworths, retailers that have faced challenges when it comes to making online food deliveries profitable due to its significant physical footprint, each with over 800 stores.

That, combined with its meal kits that boast no wastage of ingredients and ten ingredients per meal, presenting a simpler and sustainably-appealing solution to healthier home prepared meals.

Meals kits are prepared locally and Marley Spoon has a partnership with Australian based refrigerator logistics firm, Be Cool, that delivers its meal kits to Australia households.

As Australia represents around 40 percent of Markey Spoon’s revenue, the company is looking to potentially list on the ASX, according to a report from AFR, which will be appealing as investors could get exposure from a global firm in trading in a strong category.

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One Comment

  1. Skeptical February 7, 2018 at 1:39 PM - Reply

    Really? What a strange statement that sounds lifted straight from their investor pitch deck.

    I doubt as if Marley Spoon will be any more disruptive to Coles and Woollies than Hello Fresh, Aussie Farmers (backed by AusPost) or Amazon Fresh (if they roll out) have been or will be.

    Online grocery is what, about 3% of the AU grocery market in total?
    The ready-made meal category within that will be only a percentage of that. Their 40% market share of that is unlikely to scare the supermarkets (which is what, in dollar figure?). Even 100% of that I don’t see overly concerning them.

    And that’s without even considering the ready-made home delivered meal category, who aren’t going away anytime soon.

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