For Perth-based entrepreneur Mai Hughes, a childhood immersion in the Parisian food and hospitality scene inspired her to co-found My Foodie Box, the ASX-listed provider of home-delivered ‘ready to cook’ meal kits.
As Hughes explains, she and her older brothers worked long hours at her migrant parent’s Thai restaurant in the First Arrondissment – one of the first Thai eateries in the Gallic capital.
A college exchange program led her to the west for supposedly one semester, but she met her now husband (chartered accountant and now My Foodie Box chairman) Bryan and settled for the lights of Perth, rather than Paris.
Having then worked in sales and marketing for top end hotels, Hughes harboured a dream of creating a food business – but not in the gruelling restaurant sector.
“By chance I watched a documentary about meal kits in France and that was my light bulb moment,” she says. “I had never heard of meal kits before and said to Bryan ‘this is exactly what we are looking for’.”
The couple founded My Foodie Box in October 2017 to service Perth’s 818,000 households. The company made its first delivery in January 2019 and listed in early January this year, under the ASX ticker MBX.
My Foodie Box sold its first meal kits in January 2019 to a base of a mere 35 subscribers. Now, the company claims an active subscriber base of more than 2000, with expectations of doubling this number by the end of calendar 2022.
Hughes describes the kits as “like an Ikea for meals”, which is apt because the concept actually has Swedish, rather than Gallic, origins.
“Our philosophy is about bringing fun back into cooking,” she says. “We believe the kitchen is at the heart of every household and that rather than being a chore, cooking can be quite joyful.”
In the Perth market, My Foodie Box dukes it out with the multinational giants HelloFresh and Marley Spoon, which entered the Perth market shortly after the idea for My Foodie Box was conceived.
The company currently offers 23 recipes – devised and tested by its in-house chefs – and plans to grow its repertoire to 28 by the end of May.
The meal kits are delivered in packaging that is either recyclable, reusable or compostable and the old boxes are collected with the new delivery.
Hughes has nothing but kind words for German-based rivals HelloFresh and Marley Spoon, which have been in the Australian market since 2012 and 2015 respectively.
“We love them because they spent the money educating the market,” Hughes says. “But we started My Foodie Box because we saw the need for a locally owned and operated market entrant.”
My Foodie Box is now expanding to the eastern seaboard – starting with Sydney – with a hunt for suitable premises underway.
In April, the company announced it would launch the Thermomix Box, a meal kit designed for preparation in the blender and cooker devices. These kits initially will be available in the Perth market and then nationally.
The deal evolves from the involvement of The Mix Australia, the owner of local Thermomix distribution rights, in the My Foodie Box IPO. The Mix Australia subscribed $2 million in the oversubscribed $6 million raising, emerging with a 15 per cent stake.
“This means a massive growth opportunity for My Foodie Box, considering more than 500,000 Thermomixers have been sold in Australia, 100,000 of them in Western Australia,” Hughes says.
“Thermomix has an army of around 500 really enthusiastic and engaged consultants and that army will also be promoting My Foodie Box.”
My Foodie Box recorded $2.5 million in sales for the first half to December 2021, 56 per cent higher.
In the full year to June 2021 the company generated revenue of $3.64 million, 152 per cent higher.
Currently the company is generating average revenue of $132,000 a week – an annualised run rate of $6.5 million.
“We are on track for 4000 active subscribers in calendar 2022 and estimated annual revenue of $13 million,” Hughes says.
Hughes says that for any subscription company, marketing is the route to increasing sales and My Foodie Box had been spending $34,000 per month, “which is pretty much nothing”. The marketing run rate is now being increased to $184,000 a month, or just over $2.2 million a year.
My Foodie Box reported a first-half loss of $1.02 million, $189,517 of which relates to share-based payment expenses and listing costs.
Bryan Hughes says My Foodie Box doesn’t intend to be a so-called growth company that’s still loss-making years later.
“You have to spend before you earn, invest in people infrastructure and facilities and then catch up like hell on the revenue side,” he says.
“We will clearly need to fund the Sydney expansion but we are incredibly confident we can get to some fairly large box numbers in a fairly fast time frame.”
He adds that the business model makes for good cash flow, because customer accounts are debited automatically ahead of delivery and inventories are kept low.
Mai Hughes notes the overall Australian grocery market is worth $128 billion per annum, with the online segment accounting for $7.1 billion or only 6 per cent. The ‘ready to cook’ sector is distinct from – but often confused with – the larger ‘ready to eat’ sector, which includes giants such as Lite n’ Easy.
The ‘ready to cook’ sector is not as well contested as it seems at first blush. The sector’s equivalent of Qantas and Jetstar, HelloFresh owns the budget brand EveryPlate and Marley Spoon owns the discount operator Dinnerly.
With a sub $13 million market capitalisation, My Foodie Box is worth a shadow of the $134 million ascribed to the German but ASX listed Marley Spoon, or the $220 million worth of Kiwi player My Food Bag (also ASX listed).
(My Food Bag launched in Australia in mid 2016, but pulled stumps two years later in favour of focusing on its New Zealand home market).
“There is still a significant untapped market here,” Hughes says.
“I’m confident that with our team and our strategy we will be knocking on the door of the $100 million market cap [ranks] in the not-too-distant future.”