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SWOT Analysis

Lead By Example

College of Integrative Sciences and Arts, Arizona State University

OGL355: Leading Organizational Innovation and Change

Dr. B

November 4, 2020
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Introduction

HelloFresh is a German based meal kit service/company that has gained success

throughout the United States due to its commitment to serving fresh food right to your

doorstep. Founded in 2011, HelloFresh has dedicated their efforts to provide easy to

make, high-quality food to families across the country. The company has made it clear

they pride themselves on providing a wide variety of well-measured foods delivered in

recyclable containers to fulfill a promise to be as eco-friendly as possible.

Integrating cultures from across the globe, HelloFresh promises delicious, easy to

follow options for their consumers to choose from so everyone can find something they

like. While there is competition in the meal kit delivery market, the brand’s wide

distribution allows them to reach locations that their competitors cannot. Customers of

the brand have the convenience of getting meals delivered to their doorstep or being able

to pick up their deliveries from a local participating grocery store. Their marketing is set

to grasp a number of people’s attention, making it easy for anyone to sign up for their

meal kits with a quick Google search. Throughout this paper we will touch base on why a

SWOT Analysis is essential for HelloFresh to stay ahead of its competitors on the meal

kit delivery service market.

SWOT Analysis

The SWOT analysis is an in depth search of the internal and external environment

to identify internal strengths and weaknesses and external opportunities and threats.

Internal conditions include factors like resources, capabilities, organizational structure,

and intellectual property. External factors exist outside of the organization like

demographics, industry conditions and trends, consumer trends, and government policies
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(Coulter, 2013). It is important to identify internal strengths and weaknesses and review

the external environment to identify conditions that can be seized upon as opportunities

using the organization's strengths as well as threats that require mitigation. In contrast to

internal conditions, a distinguishing characteristic of external conditions are that they

cannot be controlled by the organization.

Strengths
● Ability to connect and gain trust
and provide convenience
● Powerful marketing awareness
-Distribution channels
● Strong responsibility to the
environment and health
● Enhanced reputation and retention
in the workplace - Diversity
Opportunities
● Meal kit service is a growing
sector
● Global pandemic sees increase in
home cooking
● Plant-based food substitutes are
becoming more popular and
mainstream
● Price drop in some food categories
Weaknesses
● Although just about everything
they provide is recyclable, each
item recycles differently, requiring
additional time and effort.
● Not great for specific dietary
restrictions, although they’re
upfront about allergens and
nutrition information.
● Portions may not work for your
specific needs, Options for only 2
or 4 people, although they say you
can order multiple boxes
● Expensive, as are most meal kit
delivery services
Threats
● Pick-up options available by major
grocery stores
● Competition: Blue Apron
● Third-party grocery delivery
services: Instacart, Amazon
● Expensive during high
unemployment period

Strengths

HelloFresh’s commitment to the community, convenience, sustainability, as well

as providing a welcoming workplace within the organization has set the company high on
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the competitive advantage scale. As the company strives to stay the most popular meal

kit provider in the world, these advantages depend greatly on the internal strengths to stay

on top.

With a mission to change the way people eat, forever (HelloFresh, 2020),

HelloFresh’s ability and commitment to provide convenience has proven to change the

way people eat by affecting more than 4 million people worldwide (HelloFresh, 2020).

The convenience of customizing meals, ordering fresh food from the push of a few

buttons and getting it delivered to your doorstep is a trend more and more people are

following. The ability to provide the convenience of no meal planning, no grocery

shopping, and the ability to prepare fresh home cooked meals by following a few steps is

what HelloFresh does best.

HelloFresh’s commitment to get food to your kitchen sustainably from the farm to

the table has a large positive environmental impact in the world we live in. HelloFresh’s

ability to ensure each route is replaced by as many individual customer trips to the

grocery store has eliminated 21% of each customer’s food waste as well as reduced

emissions and carbon dioxide (Sustainability Report, 2019). HelloFresh’s commitment

and ability to track and monitor carbon emissions has proven responsibility and respect

for the products, productions, people and the planet.

The welcoming workplace HelloFresh strives to provide adds value and

advantage to the company in minorities, women, and leadership. With 77 culturally

diverse nationalities employed, HelloFresh benefits from different viewpoints, creativity,

and increased production. 48 percent of HelloFresh employees are female with 39

percent of them holding management positions (sustainability Report, 2019). HelloFresh

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also benefits from retention of employees as they provide opportunities for employees to

move up to management positions within the company. This commitment to their

employees and the workplace increases productivity and growth into the future.

HelloFresh’s key competitive advantage to reach millions of customers per day

through distribution channels has contributed positively to the success of the company.

This advantage along with the commitment to use data analysis to listen to their customer

experiences has allowed them to connect and gain more customers, adapt their marketing

strategy, optimize customer experiences, and meet the needs and demands of their

customers quickly.

Weaknesses

HelloFresh has numerous strengths which make it the leading meal delivery kit,

but there are numerous weaknesses that make it susceptible to various threats and

competition globally. The first weakness our team found was that while their products

are organic and guaranteed fresh, they do not support all dietary restrictions. When

selecting your meal plan you are given very limited options: Meat & veggies, veggie,

family friendly, calorie smart, quick and easy, and finally Pescatarian.

Many medical conditions or exercise plans require a special diet. The meal kit

delivery industry is well aware of this, so many new and established companies extend

their offerings to support different nutrition and dietary needs. HelloFresh offers for

example an extensive menu but unfortunately, does not cater to a diabetic diet. With

roughly 34.2 million Americans, or 1 in 10 individuals being diabetic (CDC, 2020)

having a diabetic or carbohydrate friendly option is necessary to stand out against the

competition.
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HelloFresh has very limited meal plan choices when it comes to dietary

restrictions and failed to implement some of the top allergen concerns in America.

HelloFresh’s meal plans do not provide options for the common dietary restrictions such

as nut-free, gluten-free, and dairy-free options. They focus on their stance on organic

products versus the dietary needs of the majority of their potential consumers.

Outside of the dietary restrictions, they don’t deliver sugar, salt, pepper, butter,

and cooking oil, which can be frustrating. Their meals are rather costly compared to if

you walked to a grocery store and brought the ingredients yourself. There was an

assumption that you already had certain “staples” on hand, which in the case of olive oil,

soy sauce, eggs you could easily understand, some of the recipes required rice wine

vinegar, an uncommon condiment in most American households.

Another weakness in regard to HelloFresh is that while all of their packaging

products are all recyclable, they require various methods of recycling. If it meant saving

the planet, why wouldn’t you take that extra couple seconds thinking which trash can you

throw your garbage into? Unfortunately, it’s not always that simple, which leads to

wasted time and money. Recycled products are collected through drop-off centers,

curbside collection, deposit or refund programs. The products are then transported to a

materials recovery facility or recycling centers where they are sorted out, cleaned and

processed into ideal materials for manufacturing. HelloFresh failed to account for the

time sorting their packaging products would inflict on their consumers.

HelloFresh’s packaging products consist of the HelloFresh box, kit bag,

separator, package liners, ice packs, metallic bubble wrap, food packaging, and #4 Plastic

pack. HelloFresh Box, which is a safe for transit cardboard, is made of a mix of recycled
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and virgin fibers, along with their kit bag and separator can be recycled with your

common household recyclables. The package liners and ice packs to keep your

ingredients fresh under all kinds of weather conditions, require additional work in regard

to properly disposing the packaging.

Prior to recycling you must use scissors to cut a small corner and empty gel

contents into the trash before recycling this #4 plastic packs. The ClimaCell insulation is

a bio-based foam sandwiched between two pieces of paper, which requires you to recycle

at a designated drop-off location. HelloFresh’s Corrugated liners and honey-combed

paperboard with pulper-safe metallized film are fully recyclable but also require you to

utilize a #4 plastic film drop off location.

While some may consider these to be minor inconveniences, the average

American utilizing this service is looking to save as much time as possible. This business

has a lot going for it. Yet there are drawbacks and downsides that impact whether it fits

your lifestyle. Getting two meals a week can be helpful and timesaving if your budget

can afford it, but still having to dedicate the time to cooking the actual meal can be a

negative to most working Americans.

Opportunities

Interest in prepared, healthy, and convenient meal options will continue with

interest in plant-based substitute foods. Consumers are increasingly encountering more

options for plant-based foods like oat milk, dairy free yogurt, and cauliflower pizza crust

(Gorin, 2020). Meat and dairy substitutes are also gaining popularity. The plant-based

Impossible Burger was reported as the most popular late-night delivery snack by Grub

Hub’s State of the Plate report in early 2020 (The Impossible Burger Is The Most
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Popular Late-Night Delivery Snack In America, 2020). Vegan and plant-based

alternatives aren't just for the committed vegetarian anymore. Healthy plant-based food

substitutes are mainstream and integrated into many diets. Offering plant-based food

substitutes ingredients is an opportunity to increase variety and appeal to more

consumers.

On the supplier side there is an expectation that prices will drop in several food

categories. Supply chain challenges throughout 2020 are expected to continue into 2021

resulting in some unpredictability in food prices. While inflation is expected to increase

grocery prices 1% - 2% in 2021, the price of beef is expected to drop 2.5% along with

expected drops in pork, eggs, and poultry (Vaagen, 2020). Lower supplier prices can

help Hello Fresh contain cost and result in higher profitability. Alternatively, lower

supplier prices also gives HelloFresh the opportunity to keep prices low and exert more

pressure on competitors.

Threats

As acknowledged by HelloFresh in its 2019 Annual Report, the company faces

competition, “from offline grocery retail and by online/offline grocery delivery service

providers” (HelloFresh SE, 2019, p. 34). A primary threat centered on offline grocery

retail would be in-person grocery stores seen throughout cities, such as Frys, Safeway,

Target, etc. These options are becoming an even larger threat to HelloFresh as they now

offer drive-up, pick-up options. Before a customer was able to order from HelloFresh

because they do not have the time to go to a grocery store. Now, they have the option to

order their groceries online or through a mobile app for the common stores and simply

park in a specific spot to pick-up their grocery stores. The adoption of this pick-up
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option by major grocery outlets cancels out the accessibility of HelloFresh, making the

company lose a major competitive advantage.

The other primary threat is online/offline grocery delivery services. Some

examples of this would include Amazon.com’s grocery store and Instacart, a third-party

grocery delivery service. Both of these options allow consumers to order their groceries

online and then have them delivered to their homes - or location of choice. Again, this

approach removes the accessibility advantage that HelloFresh offered. In addition,

Amazon also has a meal-box option when ordering that provides fresh-food options - this

also conflicts with HelloFresh’s business model. Striking an additional blow to

HelloFresh, Amazon also allows for one-time purchases whereas HelloFresh is structured

as a subscription service. These delivery options defer from the previously mentioned

pick-up options in that the third-party companies that offer the delivery options are the

threat for HelloFresh, not the company selling the food. With the pick-up options, the

threat is the store that sells the product.

Conclusion

As we take a look at our SWOT analysis and it’s in depth search of the internal

and external environment, we are able to identify what HelloFresh could do to take the

greatest advantage of chances for ultimate success. Being able to determine the strengths

allows HelloFresh time to take advantage of the market opportunities. While also

identifying the weaknesses to better prepare the company for its threats. Both strengths

and weaknesses are critical aspects in identifying, as they play a role in moving the

company in a sensible direction. In doing so, this will allow HelloFresh to stay ahead of

its competition. Lastly, with threats being a real concern for HelloFresh, it's important
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they plan accordingly (mitigate), to diminish as much as possible. Knowing that other

companies are becoming more of a convenience for households is an area HelloFresh

should absolutely focus on.

APPROVAL: - plan to submit: 11/4/2020

Kelsey Stephen Margaret Camille David Viviana

Clark - Goodman - EvanSon - Miguel - Gurrola - Ramirez

Kelsey SMG ME CM DG V.I.R

Clark
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References

Coulter, M. (2013). Strategic management in action (6th ed.). New York, NY: Pearson.

Gorin, A. (2020, January 22). The Top 10 Healthy Food Trends to Expect in 2020.

Retrieved from Everdayhealth.com:

https://www.everydayhealth.com/pictures/top-healthy-food-trends/

HelloFresh SE. (2019). 2019 Annual Report.

https://ir.hellofreshgroup.com/download/companies/hellofresh/Annual

%20Reports/DE000A161408-JA-2019-EQ-E-01.pdf

HelloFresh. (2020). About us. Retrieved November 4, 2020, from

https://www.hellofreshgroup.com/en/about-us

HelloFresh. (2019). Sustainability Report 2019. Retrieved November 04, 2020, from

https://ir.hellofreshgroup.com/download/companies/hellofresh/Annual

%20Reports/HelloFresh_Sustainability_Report_2019_EN.pdf

Meyer, Z. (2017, July 3). Growing home meal kit phenomenon is stirring up food

industry, stressing out supermarkets. Retrieved from Usatoday.com:

https://www.usatoday.com/story/money/business/2017/07/03/home-meal-kit-

phenomenon/102544292/

The Impossible Burger Is The Most Popular Late-Night Delivery Snack In America.

(2020, February 23). Retrieved from vegannews.press:

https://vegannews.press/2020/02/23/the-impossible-burger-is-the-most-popular-

late-night-delivery-snack-in-america/
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Vaagen, K. (2020, July 30). What Does USDA Expect For Food Prices in 2021?

Retrieved from pnwag.com: https://www.pnwag.net/2020/07/30/what-does-usda-

expect-for-food-prices-in-2021/

What Waste Collectors and Recyclers Need to Know about COVID-19. (07 May

2020). Retrieved from CDC.gov: https://www.cdc.gov/coronavirus/2019-

ncov/community/organizations/waste-collection-recycling-workers.html