In a hapless stab at morbid and click-baity headline writing, the Swiss bank UBS released a report this time last year entitled “Is the Kitchen Dead?”
The report concluded with an obvious and possibly underwhelming ‘No, not yet.’ However, UBS does reckon household kitchens won’t have much longer to live before they “fade away.” Cut to 2030, and their analysts predict how “most meals currently cooked at home will instead be ordered online and delivered from restaurants or central kitchens.” (Agtech veteran David Friedberg also predicted the end of kitchens in our podcast with him earlier this year.)
How far should we really trust these kitchen coroners? Granted, from a London view, the vast sums Amazon plans to plow into our leading food deliverer Deliveroo speaks to a future replete with food distributed from central “ghost kitchens” to a passive consumer vegetating in front of Netflix and the like. (Yet that $575m deal in itself was effectively put on pause by UK competition regulators as of this month.)
A Bet on Home Cooking Joy
One counter-view of the future of home cooking could be gleaned from the growth of recipe box companies like Gousto, a London-based food tech startup that creates and delivers recipe boxes — ‘meal kits’ to those of you across the pond. Their vision is effectively a bet on people still finding enough joy and value in cooking their own meals at home — even those in big cities starved for time or charged a king’s ransom for every inch of rental space.
By delivering online-ordered recipe boxes to homes, Gousto eliminates supermarket travel time and costs, bringing you an exact amount of ingredients that are needed for a recipe, which helps consumers cut down on food waste, an increasingly salient political priority here in Britain. In an emailed note to AFN, Gousto CEO and Founder Timo Boldt vowed that his company was hell-bent on “achieving zero food waste” in its supply chain. “Data is in our DNA,” he says, pointing to how his company’s fulfilment center already handles 100 million ingredients each year: “We’re using AI to build both the most efficient supply chain and most personalised customer experience in grocery”
Join Us! Sign up for our next fund here.
£100m for Gousto
This week, Gousto’s AI-inspired vision received a vote of confidence — and more cash. The team closed a £30 million ($37.6 million) funding round led by Perwyn, a UK family-backed private equity investment firm, bringing total funds raised by Gousto to over £100 million.
The management team at Gousto says the latest round of investment is to “evolve its technology proposition” — hiring over 100 tech employees by 2020 on top of its current roster of 80. The team also plans to “grow its share of the 1 billion home-cooked meals eaten in the UK weekly,” expecting the size of the UK recipe box market to exceed £1.5 billion by 2022. Considering itself in pole position already, the team claims it is the only company globally in the recipe box space to have automated production, powered by data science. The team claims “to offer customers by far the most advanced value proposition versus rivals: the most choice (over 40 weekly recipes), most delivery options (seven days a week), lowest price (from £2.98 per meal), shortest lead times (3 days) and 0% household food waste.”
The Body Coach Influencer-Investor
In leading the round into Gousto, Perwyn joined existing investors including BGF Ventures, MMC Ventures, Canaccord Genuity, and Unilever Ventures. Perhaps most interestingly to health-conscious Instagram users, there’s also an influencer-investor in the mix — “The Body Coach” Joe Wicks, a personal trainer and weight-loss champion who authored the 2nd best-selling cookbook of all time. “It was clear from when I first approached Gousto that they were a purpose-driven business, with a passion for getting more people cooking and in turn improving the health of the nation,” Wicks tells AFN. “As a customer before becoming an investor, I know that Gousto is having a lasting and hugely positive impact on the way families consume and eat food.”
Don’t Forget Hello Fresh
Gousto’s bold boasts and its fresh round of funding may bristle the founders of Hello Fresh, a Berlin-based archrival in the recipe-box startup space. In the years since its founding in 2011, Hello Fresh has taken on something of a bad-boy image; a gritty survivor as all manner of recipe box rivals hit the dust in what has been a haphazard investor and consumer climate.
In an article for Inc last year, journalist Burt Helm scathingly described the ruthless and toxic corporate climate, with a history involving “millions of venture capital dollars, aggressive marketing tactics, health department complaints, threats of violence, hard drugs, dumb money, and, at its center, founders who have been so relentlessly focused on growth, they’ve barely stopped to consider what happens when they actually win.”
At Gousto, Boldt appears to have dedicated more time to corporate culture and choosing less hawkish investors than Hello Fresh. His LinkedIn page and previous articles in the Guardian show regular championing of gender equality in the workplace. He tells AFN of his choice of investors being those who “support our vision to become the UK’s most loved way to eat dinner and share our culture of corporate responsibility including our sustainability mission. They invest on a long-term basis in comparison to the usual short term venture capitalist and private equity firm investments, therefore we cultivate valued relationships.”
Just Eat Gobbles Up City Pantry
While Gousto’s Boldt is sure home cooking is here to stay, the UK’s prepared meal delivery space continues to gather pace; a voracious JustEat just gobbled up City Pantry in an M&A deal worth £16m this week. Bringing in City Pantry is a good buy for Just Eat; it is Europe’s leading B2B catering marketplace, linking caterers and restaurants with corporate customers providing food for their employees or clients. The business currently helps feed more than 120,000 people at 1,000 corporate customers every month. It works with hundreds of suppliers, including branded restaurant groups such as Itsu, Leon and Bill’s to provide meals for corporate events or business meetings.
According to a statement from Just Eat, City Pantry’s leading position will help it “expand into a UK corporate market estimated to be worth around £10 billion a year, by leveraging City Pantry’s brand, technology and B2B know-how to provide corporate customers with a wide range of high-quality, reliable food for delivery and restaurant partners with access to pre-scheduled, high-value corporate orders. It also provides the potential to expand further into international markets.”