The Name: Gousto
The Place: Shepherd’s Bush.
Really? Well that’s the HQ. But its services are of course available throughout the British Isles – it’s online.
The Story: It seems reading through earlier interviews that at first co-founder Timo Boldt thought about opening a shop a decade or so ago to sell his made-to-measure recipe boxes but putting his ex-Goldman Sachs financial nous to good use he decided that online and convenience were the trends to follow and lo, hasn’t he been proved right.
You know what this is saying to me? No. Spill.
This is crying out ‘Gousto is another one of those businesses that has benefited from the changing consumer habits/state-led behaviour alterations of the past three years’: Don’t get ahead of yourself and don’t ever try to second guess what I am going to say.
It has though hasn’t it? Alright yes, but it was already doing very, very well before Covid-19 as we shall see if you stop interrupting.
Fine: Cast your mind back to 2012 – London Olympics and all that. Our young finance professionalTimo is getting very fed up with the time it takes to plan, organise and buy the raw ingredients to eat well after his very long working hours. And like all good entrepreneurs one day he finally shouts “there must be a better way!”
Dramatic, I like it: On-demand is and was a mega-trend of the moment – probably one of the reasons that opting not to sell the boxes out of a shop with its restricted opening hours was a good move. If your average lawyer gets home at 10pm and wants a fresh, healthy and nutritious supper – what are their immediate options?
Limited: Exactly. And this is the niche that Gousto started to fill. Armed with some of his own savings and the rest from family and friends.
Plain sailing from the first? Duh. Obviously not. Boldt was selling the boxes (ready portioned out with easy to follow recipe cards) at markets and then he had the good idea of hand delivering 100 boxes to journalists, which led in time to an appearance on Dragons Den when the company was a year old.
Ah, and huge investment followed: Not from the Den it didn’t. But indirectly it led to angel investment and basically Gousto has never really had to look back since then. So many of the things that consumers care about now are in-built into this company.
How much is it a food company though? ‘A data company that loves food’ – that’s the oft-quoted phrase. Like a lot of tech companies its real speciality is data mining and using algorithms to personalise the service so that the app knows exactly what your preferences are, what you bought last time, and what you are most likely to be tempted with this time. Having said all that Timo Boldt’s personal mission on sustainability and ethically-produced food, not to mention reducing food waste, are also part of Gousto’s big sell and appeal to its core audience. But the data-led thing is integral here too.
Food-wastage? For sure, think about it. Firstly, these boxes come carefully weighed with exactly the right amount of each recipe ingredient – even the most rubbish of cooks cannot mess this up.
Unless they hate it and throw it all in the bin: Unlikely, they have chosen this don’t forget. Secondly, the company has a pretty good idea of what you are likely to order and how often because people are creatures of routine by and large. Thirdly, they have close working relationships (and positive ones too) with their suppliers and supply chain meaning general consumption trends are passed back to Farmer Giles in time for planting/production. Fourthly, there are new recipes arriving on the site every week, lots of them actually. And the recipe developers can take note of what perhaps didn’t fly off the shelves in the last couple of days, repurpose that product in a new recipe, and Bob’s your uncle. Take all these together and food waste at the company is negligible.
OK, OK. But what about the packaging? We all know that endless little tiny plastic pots is a big no no: Yes we do, but Gousto is putting their money where its mouth is on this one. At the beginning of 2020 it came good on its pledge to reduce plastic in the boxes by 50% and it has also committed to ensuring its own-branded packaging is all reusable, recyclable or compostable by the end of this year. And it spent a lot of time innovating the new eco-chill box, which contains no plastic (at least the actual box doesn’t – the company got into trouble with the ASA over this as the box still contains icepacks, which do contain plastic).
Skipping nimbly over that… And now there are edible stock cube wrappers.
Beg pardon? Yes they have just launched them. Made of pea protein – just pop the cube and wrapping into the stew and it all dissolves.
Clever. Now let’s talk money: Earnings, investors or what does a box cost?
All of the above: Investors have always queued up since straight after Dragons Den in 2013. Softbank has just put in another cool $100 million, meaning that Gousto now weighs in with a hefty $1.7 billion valuation. Notable investors include fitness guru Joe Wicks who also designs a range of healthy eating recipes for the boxes in a nice little tie-in.
And what are they doing with it all may I ask? Putting it back into the business. Gousto doubled its capacity in 2020, investing in its existing fulfilment centre in Lincolnshire and adding a second automated factory at the end of the year. And hold on to your hats, it wants to double capacity again by the end of 2022, adding two further fulfilment centres in Essex and Cheshire. Which brings us neatly to…
Earnings? It announced sales in 2020 of £189 million, that’s up 129% and also achieved its first year of profitability. In a year of closed shops/restaurants and restricted movement this fairly high-end business really flew.
But will it be able to continue? So far it seems that strong growth has continued into 2021, with over 25 million meals sold in Q1 alone – three meals a second.
I bet it’s pricey though? Well, if you consider its core customer is probably a time-poor, cash-rich professional with children then it is all relative. A two-recipe box for a family is around the £30 mark.
Yes, pricey: There’s never going to be a box that suits all budgets – this one happens to be a higher-end one. Deal with it.
Will we see Boldt jumping across the Pond or the Channel for that matter? Not any time soon. He seems committed to the UK market for now and with allegedly one billion meals eaten in the UK every week and with the UK grocery market standing at £200 billion Gousto is still a minnow in a big pond here. Although it’s success has not gone unnoticed by the Government. Chancellor Rishi Sunak (above) had a little go recently at prepping a Gousto meal as part of a campaign to promote the two-year Business Tax cut. And I’ll tell you who else has benefited from its success.
Who? The Fareshare charity that’s who. Gousto recently partnered with DPD so that all failed box deliveries gets rerouted to Fareshare to distribute.
OMG, who doesn’t remember they ordered/isn’t in to receive their ‘not that cheap’ dinner boxes for the week? Umm, time-poor, cash-rich professionals.
Oh, right. Yeah I forgot.
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