MMM – Marley Spoon AG

greggles said” Sounds like Woolworths will be flogging Marley Spoon products in-store soon…

– doesn’t seem to be the case (six months later). MMM is down to 30c a share, so the WOW infusion isn’t working any magic. Also (drum roll), WOW lent a further $4 million by way of Convertible Note in Sept 2019.

CEO founder and CEO Fabian Siegel said MMM would start sourcing products from WOW suppliers and distributors, use WOW Connect logistics to distribute meal kits interstate, advertise on WOW store digital screens, online and in their magazine and market to Woolworths Reward loyalty card members. Siegel sees these benefits flowing through in 2020.

Marley’s Australian sales rose 50% in Dec quarter, customer numbers rose 56% to 68,000 and number of orders rose 54%.

The strong performance from Australia helped Marley Spoon lift total revenues by 23 per cent in the December quarter and by 41 per cent to €129.6 million ($A212 million) over the year, exceeding the company’s 35 to 40 per cent guidance. Lower marketing and customer acquisition costs boosted contribution margins, enabling Marley Spoon to reduce December quarter losses to €2.4 million ($A3.9 million) compared with a loss of €8.6 million ($14.03 million) in the previous fourth quarter.

Mr Siegel reaffirmed the company’s guidance to be EBITDA positive by the end of 2020. “We believe that 2019 was an important year as the Australian business showed us what this business should look like,” Mr Siegel said

So, We’re the guinea pigs for some European dream?

“We are in the early stages of a five-year strategic partnership with Woolworths and the growth opportunities and operational synergies from this collaboration have only just begun,” he said. Marley Spoon expected to see similar improvements in the US and Europe after investing in infrastructure including manufacturing facilities

The meal kit market is worth more than $300 million in Australia and grew about 40 per cent last year, according to Nielsen. Meal kits currently account for less than 1 per cent of the food and grocery market but the sector is expected to continue to grow, according to a recent UBS report, taking fresh food sales and foot traffic away from supermarkets. “Meal kits challenge the traditional supermarket model, with fresh ingredients for each night’s meal delivered weekly,” UBS said.

As a result, most major grocery retailers in Australia and overseas have announced partnerships with or have acquired meal kit businesses, or have increased their range of meal kits in-store.
https://www.afr.com/companies/retai…rs-soar-after-woolworths-deal-20200129-p53vxd

– having now been exposed to Marley Spoon, I think it’s fair to say it suits some people (1 percent, perhaps?). The model is 30 minute prep, no waste, easy to follow but freshly prepared meals. It is not a microwave alternative, that’s “Light n Easy” or WeightWatchers, or the supermarket chilled offerings.

The usual demographic is; time poor, inner city professionals. I would add another, and that is, two-person households not into food waste, but want to cook interesting and varied wholesome (fresh) food. The meal offerings are complete and there’s no cling-wrapped back of the fridge stuff to forget and, later on, throw out. Each offering is well proportioned. The issue is packaging; SUP. Everything is wrapped and sealed and this is wasteful. And another: Supermarket carparks are not necessarily the easiest or friendliest places; home delivery after selecting the meals allows for less decision making.
End result. It’s another service offering that is semi-efficient (weekly ordering in advance allows M/S to manage supply issues) but involves freeze or chill packs in cardboard boxes and delivery to the door. Woolworths see it as a threat enough to take a stake, get involved in supply and sourcing logistics, with obvious benefits for WOW (with their economies of scale) and also have a ‘peek under the bonnet’. Take out later or see it out or learn something from web-based, data rich KYC Meals-as-a-Service.

Ah, creative destruction.