00:00Do you think about persistently higher oil costs that's going to feed into fertilizer prices,
00:06it's going to feed into supply chains, and eventually show up in higher food costs?
00:11HelloFresh, it's all about food. What are you seeing in your supply chain right now?
00:16So when we're looking at our supply chain, we have the benefit of building a very robust supply chain
00:21for many years. So a lot of our agreements are, you know, long-term agreements would set prices.
00:26So for us, our ability to absorb this type of a change is better than the, you know,
00:32one, two, or three quarters that we just discussed. But what we can see, which is important,
00:37is that for customers, and we're seeing that from customers that are doing the HelloFresh
00:42or de facto subscription, we're actually, they're hedging strategy. Because instead of going to the
00:48supermarket and guessing what's going to be the price of bread or potatoes or tomatoes tomorrow
00:52morning, they know that they're paying whether it's $9.99 or $12.99 for every meal, and that stays
00:59for the year. So what we're seeing from a lot of customers is that they're very happy that they
01:05don't need to guess anymore. Now, if you add to that the fact that you need to multiply the price
01:11changes in the grocery store, because data in the U.S. shows that about 35 to 40 percent of food
01:16that you
01:16buy in the grocery store is waste. So not only that you buy whatever you need, you end up throwing
01:23more. So what we're seeing in feedback from customers is that they are able to, in a funny
01:29way, hedge the cost of food and not be worried about it, at least for now. Again, if it prolongs
01:35for years, of course, if, you know, core food prices are changing, et cetera, we will need to make the
01:40same decisions of whether, you know, we roll that down to the customer or roll that up to us. And
01:47we
01:47will make those decisions. Usually we're very customer centric. But at this point, have you had
01:53to adjust prices anytime recently? Not, not in 2026. Okay. We had a little bit of price adjustment last
02:01year, but they were more from a very different reason. We did the survey of what Americans want to
02:07do in, you know, at the end of 2025. And we got a lot of feedback about two things. One
02:13is a lot
02:14of Americans, actually 90% of people that answered that survey said they're planning to eat more home
02:19cooked in 2026 and beyond. Part of this was actually health, you know, GLP-1, people wanting to be
02:27healthier, but also costs because, you know, we're here in New York, the average takeout for a person is
02:32about 35 bucks. So there, you know, it's not, it's not an easy thing to take on every day. Yeah.
02:38So
02:38we're seeing that. And what we did, which was very important, we actually invested a lot more in
02:46the food itself. Right. Because the core number one strategy is having people lick their fingers
02:52after having a meal with us. Yeah. And that part of it is not only the ingredients, but also the
02:57portion sizes. So we raised a little bit of the prices last year, but that came together with an
03:04increase of 30 to 40% in portion sizes and higher, higher grade ingredients. Yeah. Right. So we did
03:11that not because of inflation and other things, but we said our agreement with our customers was,
03:16okay, we're giving you a lot more every week. So you're going to pay a little bit more.
03:20I have been wondering, you know, how you sort of shift your messaging around the current economic
03:25environment, because you think about, you know, some of the marketing, uh, for HelloFresh and
03:29others, a lot of it comes down to convenience. It's easy to get all the ingredients at once and
03:35make it at your home. But you know, what you're talking about right now, you know, it's, it's costs,
03:39it's taking out the uncertainty of you go to the store and you don't know how much things are
03:43actually going to be, uh, costing you. How often do you sort of shift your marketing there in addition
03:50to the conversation around pricing? Absolutely. So in reality, we haven't shifted our marketing to
03:55that yet because the way that we were marketing today is really trying to help our customers.
04:00So the, you know, the problem that every person in the world has, which is what's for dinner
04:04and what we've done with marketing, uh, which was fascinating to see how customers reacted.
04:09That was a lot of what I call grassroots marketing, which is, you know, we took over a train station
04:15in Toronto when people are coming back home and got them to say, Hey, we're going to solve what's
04:21for dinner for you. Take a meal. Is that effective? Cause I see the, I've seen some of your folks
04:24on
04:25the streets here in New York and they kind of flag you down. Do you get a lot of conversions
04:27out of
04:28that? Uh, we do, we do. And, and it connects well with investing in the food because at the end
04:33of
04:33the day, we can get people to try. Yeah. The better the food is, the more conversions we see.
04:39Yeah. I am curious also about competition. I mean, there are a lot of players in this and some
04:43have gone and come and gone, but there are a lot of players, a lot of options out there. Some,
04:46you know, national options. Uh, others are a little bit more local, certainly here in New York.
04:50How do you sort of differentiate yourself? So when we're looking at what we're doing,
04:55uh, we're in the process of what I call reinventing meal kits, meal kits used to be a one size
05:01fits all.
05:02You have 30, 40, 50 options. Everybody sees the same menu, et cetera. And as we're looking at
05:07ourselves, not just as a food company, but there's a technology company that does food.
05:11We're changing into growing our menu exponentially and using AI and hyper personalization to basically
05:18tailor, uh, a menu per person. So we're going towards the direction where every person will
05:24feel as if there is a personal chef in their household that gets to know them, knows what
05:28they like, knows their habits, know that like on Wednesday, there's soccer practice. So I have
05:33only five minutes to cook dinner. And on Fridays, I have a little bit more knows that, you know,
05:37in my household, my kids, if they smell Brussels sprouts, they're never going to run.
05:41They're never going to get to the kitchen. So what we're doing is differentiating on the fact
05:47that we have higher variety and we have personalization. So everybody feels that there
05:52is somebody that knows them and tailors it for them.
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