After weeks of countrywide lockdown, the demand for meal-kit deliveries is booming as housebound South Africans look for ways to avoid the shops while keeping themselves well fed.
"We’ve seen a huge spike in growth over the past two or three weeks," says Chris Verster-Cohen, co-founder and chief marketing officer of Cape Town-based meal-kit delivery service UCOOK.
Their story is the stuff of start-up dreams; blue-sky thinking from two friends —Verster-Cohen and co-founder David Torr —who waited tables at night to pay the bills. They worked from a corner of the family garage, with borrowed money for start-up capital, and their first order was for just 21 meal kits.
On that occasion they famously forgot to include the recipe cards, and even though most of their clients were family and friends, orders quickly dried up. But they refined the offering, and with angel investment and venture capital from Silvertree managed to scale the business to a point where UCOOK dominates the local meal-kit delivery market.
And demand has rocketed by 25% since the beginning of March. In life before lockdown the company was delivering around 120,000 meals per week. Today that figure is north of 150,000. Business has been so brisk that the company has had to limit orders to existing customers, placing a hold on new clients signing up.
Globally, the figures tell a similar story. Market leader HelloFresh — based in Germany, but operating in 12 countries including the key US and UK markets — expects revenue for the first quarter of 2020 to top €700m. That’s almost 70% up on the same period in 2019.
"With the country on lockdown you’re guaranteed to be home," says Ryan Brouwer, COO at UCOOK. "There are no restaurants open, and for many people UCOOK is the most appropriate solution, because the shopping is done, the recipe is provided."
While the lockdown has led to a boost in UCOOK’s business, it has also brought challenges.
With concerns around supply chains and their own labour force, "we were unsure if we would have to close down entirely over this period, but things have stabilised and we’re very happy to be able to continue trading", says Verster-Cohen.
Brouwer adds: "The first decision we made when we heard about the lockdown was to simplify recipes to focus on fewer suppliers. All these externalities become a business risk, so we moved to limit potential problems down the line."
Though launched in Cape Town, UCOOK’s client base is today split 50/40 in favour of Gauteng; the remaining 10% is made up of smaller cities serviced by air-freighting meal kits.
"But with the lockdown we’ve had to cut all national [air-freighted] deliveries for this period," says Brouwer.
The lockdown and increased demand have also pushed back the company’s plans for overhauling its website and launching new product lines that were to include ready-to-eat frozen meals and a retail presence.
Instead, it is launching an ancillary food delivery service offering pantry essentials —dairy, meat and fresh vegetables — alongside the UCOOK meal kits.
"Many small-scale farmers and producers were supplying restaurants and markets, and have now lost their route to market. We want to work as with as many of these as we can. It provides a market for these suppliers, and enables our customers to stay home," says Brouwer. "For now it’s a really good add-on that will bolster the UCOOK offering, and is operationally a lot more simple … but it is also there as a failsafe in case the structure of meal kits is no longer possible or relevant."
It’s sensible planning amid the uncertainty of when the lockdown will be eased or lifted, but it’s also part of UCOOK’s growth strategy to claim a greater "share of throat", as the drinks business puts it, in the post-Covid-19 future.
With an array of subscription services, UCOOK wants to take care of everything from your fresh bread and milk to your restaurant-standard evening meal.
"We’re trying to focus on habitual purchases," says Verster-Cohen. "Meal kits are good for a brand-building exercise, and the core of what the business is, but we’re pivoting to new categories, and looking to own those categories."