HelloFresh Is Investing $70 Million to Have AI Help Plan Dinner

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(Bloomberg) — Meal kit specialists HelloFresh SE is employing artificial intelligence to get more customers cooking.

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The Berlin-based company announced on Monday a $70 million investment in its menu subscriptions. The funds will more than double the number of meals on offer and increase the range of star proteins such as beef and seafood. It will also bolster the use  of AI technology to streamline decision making during ordering, even as the choices for recipes increase.

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The refresh is taking place for customers in the US, its biggest market;  the company says it will enhance product offerings in other countries at a later date. (In 2024, the group delivered over 511 million meals in North America, which also includes Canada. It’s more than half the worldwide worldwide number of meals, which was over 965 million.) The investment is intended to enhance brand loyalty and bring in customers in the face of inflationary food pressures, says Assaf Ronen, HelloFresh group president in an exclusive interview with Bloomberg. While “$70 million is a very large check,” he says, “the more we invest in customers, the more they stay with us.”

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HelloFresh sees opportunity as Americans cut back on dining out amid rising food prices. The company is currently valued at around €1.5 billion ($1.73 billion); at its peak in 2021, it hit €16.7 billion as a result of the pandemic. According to a series of recent company polls, including one among 5,000 customers, nine out of 10 respondents said they’re planning to eat more at home in the upcoming year. And 58% of respondents said they’re bored with what they eat every night.

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To that end, a major portion of that $70 million will be used for a broad expansion of weekly meal offerings, from 45 to more than 100. Customers will now be able to start cooking dishes like seared salmon with couscous, spiced vegetables and lemon yogurt, and eggplant caponata pitas with mozzarella. There’s more premium meat cuts, including grass-fed rib-eyes and whole chicken thighs, and triple the amount of seafood will be available with no upcharge; depending on location, subscription prices might range from about $60 for two 2-serving recipes per week, including delivery, to about $370  for six recipes for six people weekly. (The cost-per-serving runs from about $10 to $11.50.)  The company is also including the option of more seasonal produce and more specialty products, like nutritional yeast and kimchi. Upcharges will be in place for options like multi-course meals and platters. 

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Portion sizes will also generally increase, says Ronen (look no further than Reddit’s HelloFresh thread if you want to discuss): Some sides will increase by 50% while some proteins will be 20% bigger. There will also be increased customizable options for swapping out ingredients, like chicken for pork. 

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Ronen, who was vice president of the Alexa division at Amazon.com Inc. a decade ago, says AI technology will help customers navigate the expanded menus and prioritize selections. “What’s at the top of your list will be more relevant for you.” The more each customer orders, the more the system will Netflix-style prompt meals that reflect your preferences—for instance, recipes that take 5 minutes versus 50 minutes in the kitchen. 

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Ronen won’t confirm how much meal prices will go up in response to these improvements, but he says when they take effect in September, they won’t be relatively higher than price increases in the broader economy. “Pricing is something we’re always looking at. In some places, there is a price increase, but it’s lower than the rise in inflationary food prices,” he says.