Marley Spoon unveils Australian growth ambitions as online deliveries soar

Marley Spoon is capitalising on the growing trend of Australians bypassing supermarkets to get kit meals delivered to their doors.

Marley Spoon Australian managing director and co-founder Rolf Weber at a warehouse in Sydney. Picture: John Feder

Marley Spoon is moving to seize a greater share of the Australian grocery market, with the food delivery service ramping up manufacturing and distribution in Sydney, Melbourne and Perth, underscoring its ambition to become a €1bn ($1.57bn) company by 2025.

The move comes as Covid-19 has accelerated the uptake of e-commerce, while traditional bricks-and-mortar grocery stores – including Woolworths and Coles – have battled panic buying and rationed inventory during the pandemic.

Marley Spoon, Australia’s second-biggest player in the $500m meal kit delivery market, says the trend is here to stay and Australia is part of its plans to expand across three continents.

“Last year we shipped 5.2 million orders to our customers, we generated €250m in revenue. By 2025, we will be at roughly €1bn, and the ambition by the end of the decade is to ship 100 million ­orders to our customers,” chief executive Fabian Siegel told The Australian.

“We believe we can grow quite significantly over the next year, and comes across all regions, Australia, Europe, the US.”

Mr Siegel was speaking as Marley Spoon prepares to ship the first orders from its new 14,200sq m purpose-built, temperature-controlled warehouse at Wetherill Park in western Sydney this week.

“It is one of the largest facilities we have globally and is also one of the greenest facilities we have in terms of sustainability,” he said.

Marley Spoon began in Germany in 2014 and listed on the ASX in July 2018, with Rolf Weber heading the Australian operations.

It signed a 10-year lease with Charter Hall Prime Industrial Fund in July last year for the warehouse at Wetherill Park, which has been designed to ­“accommodate the significant growth of Marley Spoon” and “to provide a more efficient supply chain for product to Australian customers”.

“Fundamentally, we are seeing a change in people’s shopping habits, as more consumers look to online shopping for convenience and affordability,” Mr Weber said.

“Over recent years, we’ve been focused on expanding the Marley Spoon offering, as well as introducing Dinnerly, a second more affordable meal kit service; flexibility and choice have been at the heart of both brands, so a larger purpose-built facility will allow further automation and efficiency while also expanding our offering to customers,” Mr Weber added.

Globally, Marley Spoon delivered “break-even” operating EBDITA (earnings before interest, tax, depreciation and amortisation) of €500,000 in the past year, with growth spread across all its geographies.

This represented an improvement of €29.2m compared with 2019. It comes as companies such as Marley Spoon and UberEats are shaking up the food service market – even before the pandemic – as time-poor diners prefer to order online, bypassing traditional supermarkets.

But rather than see Marley Spoon as a threat, Woolworths has joined forces with the food delivery service, striking a five-year strategic partnership in 2019.

The tie-up – the first example of a leading Australian supermarket partnering with a meal kit delivery service – involved a marketing alliance and Woolworths taking an equity stake in Marley Spoon.

In the past year, Marley Spoon has delivered 45 million meals across Australia, Europe and the US, and the company is looking to grow by about 30 per cent this year as it steams ahead with expanding its capacity, which also includes a new factory in Perth.

“ In 2021 we will continue to invest in additional capacity to support the increasing customer demand and our growth ambitions,” Mr Siegel said.

“We expanded cool room ­capacity in our manufacturing centres in Melbourne, New Jersey, Texas and The Netherlands.”

In the three months to March 31, Marley Spoon increased its active customers in Australia by 51 per cent to 123,000, comprising about one-third of its global customer base. Meanwhile, it delivered 4.6 million orders in Australia – an increase of 67 per cent compared with the same period in 2019.

“To our Australian customers we also delivered ready-to-heat meals,” chairman Deena Shiff said. “The reliability and convenience of weekly home deliveries of Marley Spoon’s online subscription service helped our consumers meet their household food requirements at a time of great anxiety and difficulty. Our reputation for reliability and quality led to growth and increased customer retention.

“With the accelerated growth of Marley Spoon in 2020, and continued expansion of the adoption of online grocery shopping, we see growth opportunities in all our key markets. In 2021, we expect to grow revenues by 30-35 per cent and deliver further expansion in contribution margin to 30-31 per cent.”