A few days ago I spoke with CEO Tim Schmidt, to talk about how Gousto is intent on delivering more than just good ingredients.
Here’s what he had to say…
What would you say is Gousto’s unique selling point?
Customers shop by recipe, choosing whatever they like the look of, and we deliver the ingredients to anywhere in the UK.
We offer a new menu of 12 meals to choose from each week, as well as extra goodies like wine and dessert.
No other service gives this amount of choice or lets you have add-ons. If you don’t like feta cheese… well, that’s your prerogative.
Alongside this, we think Gousto is the easiest way to cook healthy food. And our customers are busy people, so they really value that.
Despite being certified organic and only using meat from British farms, we only charge from £3 per meal including free delivery. This also makes us the least expensive recipe box option in the UK for healthy meals.
Who do you see as your biggest competitor and why?
It’s a £200bn grocery market characterised by no growth and no margin. But there are pockets of growth: the online channel is growing at 17% per year, moving £10bn in revenues from the store to online by 2020. That’s a seismic shift.
Plus, nobody want to waste two hours shopping every week when they can instead spend one-minute browsing online and get everything delivered for free, without any food waste.
So in a way I really believe that supermarkets are our competitors.
The supermarket model is out-dated. We think customers deserve better – and the response shows they agree. On Trustpilot we have a 9/10 score versus 3/10 for all supermarkets.
As we continue building our proposition over the next 10 years, I expect mass adoption. This is amazing for farmers, customers and animals alike.
Some assume recipe boxes are for people who can’t or don’t like cooking – what is the benefit for the ‘foodie’?
First of all, 75% of Brits cook every single day.
Take Rachel, a 40-year-old professional living outside of London with two young kids. She has to cook to provide a healthy meal, it’s a real pain for her.
It’s not a choice, because she can’t order pizza or heat up frozen food as its way too unhealthy for her kids.
Customers like Rachel represent a huge proportion of the UK – our aim is to make their lives easier, better and more natural.
We don’t change their habits; we just help them.
And rest assured I’m a hardcore foodie and I still love my four Gousto meals each week. It’s incredibly nice to go on autopilot knowing you’re cooking something delicious every single time.
How do you maintain low levels of food waste in comparison to supermarkets?
We are the only grocery business that actually repackages food. We go to farmers, buy large quantities and repackage food ourselves.
This, together with our centralised warehouse, guarantees our close to zero waste rate. The forecasting is 100% data driven and automated.
In contrast, if you run 5,000 stores you get grey hair predicting demand, especially on short shelf-life produce. A leading supermarket just published that it is wasting 66% of fresh salad. That’s just insane!
As a subscription service, how do you ensure customer retention?
We delight customers. That’s all there is to it.
But seriously, we listen to feedback super carefully and obsess about our product. If you think about innovation in three stages – ideation, selection and execution – it’s fair to say that we outsourced the first two to the customer.
In other words, we listen to customers and then do whatever customers want. But not via a once-a-year focus group, in real time every hour.
To give you some examples, just this year we launched express meals, we doubled additional products like dessert and wine, we launched iOS, Android and iPad apps and we increased recipe choice by 20%.
Other companies in this space have done nothing at all. Our restless nature and desire to give customers what they want is how we will stay ahead.
What digital channels are most important for your business?
Television is dying and all acquisition is moving online. Our customers are extremely active on social media, and recipes are the most shared content on most platforms already.
We of course use email and other channels too. We have very high referral rates from happy customers and we also get lots of word of mouth which is nice.
How does Gousto use personalisation to improve the customer experience?
I’m a geek at heart, so I really admire our data team. With PhDs in machine learning, computational chemistry and maths, we have some serious fire power when it comes to personalisation.
And we run a state-of-the-art AWS cloud micro-server infrastructure that allows us to process huge amounts of data, super-fast.
What are your aims for Gousto in future?
As food shopping is moving online, we are building capabilities to capitalise on the rise of dietary requirements, convenience and mobile.
In a decade we will have achieved true personalisation. That’s a BIG proposition which will challenge supermarkets’ existence. It just takes time. And buckets full of conviction.