Everyone loves restaurant-quality food. But far fewer people have the patience, skill, and tenacity to meticulously shop for the best ingredients, select recipes, and create meal plans.
This predicament was observed by many a savvy entrepreneur — and the booming meal kit market sprang into existence. Now estimated to have a value of $17.8 billion, the global meal kit market is set to triple in size to $64.4 billion by 2030.
Established players like HelloFresh, Blue Apron, and Freshly, among others, will drive a good chunk of this growth. Yet, there’s still room for new brands to enter the industry and provide cover for more local market segments.
After all, consumers are eager to shop local — and do so online. Among Americans, 58% say that local produce is important for them. Of Irish consumers, 93% prioritize buying local food and drink brands. At the same time, a major survey of British consumers found that, in 2030, 45% expect to primarily order food via computers and 32% via mobile.
Marley Spoon, another big player in the meal kit delivery market, has cultivated strong brand equity at the intersection of these two preferences: access to fresh, local ingredients and convenient digital ordering.
So, if you‘re also interested in entering the booming meal kit market, this brand deep dive into Marley Spoon’s story offers several great lessons.
Marley Spoon's Success Story
Marley Spoon co-founders (from left): Fabian Siegel and Till Neatby. Source: BizJournal
Marley Spoon was co-founded by Fabian Siegel and Till Neatby in 2014. Siegel, a seasoned entrepreneur, already had several other ventures under his belt and held executive roles in both European and US startups.
In 2011, Siegel co-founded another online food ordering company — you might have heard of it, just a little brand called Delivery Hero — which went public in 2017. However, Spiegel left the company earlier in 2013 and settled for a VC partner role with Global Founders Capital.
However, his tenure there wasn’t long. A year later, he reached out to Till Neatby — a childhood friend and business partner — to launch a new venture: Marley Spoon.
The brand name is a nod to a small family-owned restaurant the duo visited in the 90s during a backpacking trip around Asia, called Marley’s. In the midst of a tropical storm, Marley’s provided shelter and heartwarming, homemade food to Neatby and Spigel — so they named the brand after it.
But it’s not just the name that was spot-on — other elements of Marley Spoon’s operations were well-thought-out, too. To their great advantage, Siegel possessed extensive experience in the FoodTech market, plenty of supplier connections, German market knowledge, and a well-defined customer value proposition.
Therefore, Marley Spoon’s brand is based on three pillars:
Convenience and time savings: Consumers receive fresh products at their doorstep on a subscription-based schedule — all organized by recipe.
Sustainability and food waste reduction: Spiegel designed a business model where — unlike supermarkets — they could have zero food waste. A measured amount of ingredients also allowed consumers to prevent food spoilage at home.
Health: The team developed recipes to promote healthier food choices and food consciousness. They use fresh, clean ingredients and don’t include any pre-processed foods.
Spiegel also focused on designing a lean source-to-order system. To achieve this, Marley Spoon commissions produce straight from growers in the right quantities, which reduces waste at the point of manufacturing. Additionally, the company requires only one fulfillment center per marker and uses optimized delivery routes to reduce its carbon footprint.
An attractive value proposition, crystalized brand positioning, and optimized operations gave Marley Spoon a strong headstart in the market.
And thanks to lavish seed and Series A money, which Spiegel secured in part thanks to his reputation, Marley Spoon was launched in three European markets at once. Over the next two years, the brand added three more — the US, Australia, and Belgium. Between 2014 and 2017, Marley Spoon grew at a whopping 137% on a quarterly basis.
Source: The Next Web
In 2015, Siegel decided to enter the profitable, but competitive, US meal kit market. At that time, more established meal kit brands were already active in the US — with smaller, regional competitors on the city and state levels.
To many, Marley Spoon was an unfamiliar European brand. So, to engage local target audiences and boost brand awareness, Siegel needed a “face” for the brand. Once again, Spigel’s network came through by connecting the brand with none other than Martha Stewart.
In 2015, Spiegel recruited Jennifer Aaronson as Marley Spoon’s Culinary and Brand Director. Before that, Aaronson worked for Martha Stewart Living Omnimedia. So, she made the introduction happen.
As Spiegel said in a BizJournal interview:
“Martha Stewart blind-tested (the Marley Spoon meal kit), and had colleagues test it, and she tested other services before she decided. She was very particular about finding out if we were good enough for her brand.”
In June 2016, Marley Spoon officially joined Nasdaq-listed Sequential Brands Group Inc (which owned the Martha Stewart brand at that time) — and was re-branded as Martha & Marley Spoon.
Securing a major co-branding partnership was a priority for Spiegel. The brand’s European experience proved that online ads, SEO, and other digital channels weren’t really effective for rapid customer acquisition. Consumers didn’t (yet) know of meal kit delivery services, so they weren’t searching for such services online.
Hence, the team focused on increasing product awareness first. Martha’s strong personal brand and TV presence was an advantage other brands in the space didn’t have. To improve brand metrics in the US market, Marley Spoon heavily invested in OOH advertising and TV ads in particular. They also partnered with other home delivery services by placing introductory offers in delivered packages.
Cumulatively, the efforts paid off. According to a 2018 investor report, Martha & Marley Spoon:
Hit an all-time-high €23.9 million in net revenue, up 15% quarter-on-quarter
Achieved 43% quarter-on-quarter net revenue growth in the US
Secured 50% quarter-on-quarter net revenue growth in Australia
Source: Marley Spoon – 3Q 2018 Quarterly Report
Strong year-on-year performance and upward market growth trajectory eventually lead to a mid-2018 IPO on the Australian Securities Exchange.
By that time, Marley Spoon was rapidly acquiring more market share of the Australian $600 million prepared meals and meal kit delivery market, where only one other brand, HelloFresh, was currently active.
Similar to other online delivery brands, 2020 was a strong year for Marley Spoon. With lockdowns, the demand for home meal deliveries soared across markets. Marley Spoon’s lean operating model allowed them to adapt to soaring order volumes and temporary supply chain disruptions.
In 2020, Marley Spoon increased its active customer base by 104% across markets. Sales in Australia went up by 82% in the same year.
Marley Spoon’s rapid growth is a direct result of smart brand marketing and measured ad spending. They offset initially high customer acquisition costs (CAC) through customer retention and overall high customer lifetime value (CLV). Their aim is to maintain 3X higher CLV than CAC. This balance creates attractive unit economics, where the brand can maintain positive contribution margins without penny-pinching on the quality of ingredients or service levels.
Marley Spoon entered 2022 with strong numbers. Their revenue and user base growth remains double-digit in two main markets — Australia (+53% in revenue growth) and the US (+36% in revenue growth).
3 Brand Lessons from Marley Spoon
Source: Marley Spoon
Marley Spoon had several “unfair” advantages at the start:
A highly-experienced founder
Access to VC capital
Martha Stewart partnership
Now, not every brand will have access to the same advantages. But, there are several other smart brand growth tactics the team applied — and other brand marketers can borrow.
1. Develop a Deep Audience Knowledge
Though Spiegel came in with some “baggage”, his initial assumptions about target audiences weren't always true.
Marley Spoon first offered an “on-demand” meal delivery, where people could place an occasional order with them whenever they wanted. However, this model proved to be unsustainable with their profit margins. They also struggled with customer retention, which made high CAC costs hard to justify.
As Spiegel told The Next Web:
“It took us six months to realize that the original business model didn’t work and to figure out what needed to be done differently. It took us three months to implement the changes, and nine months after the initial launch we launched the model that we’ve had ever since.”
Marley Spoon replaced the “on-demand” pitch with “flexible, subscription-based deliveries”. In-depth consumer research also helped them better understand who their best targets were. Originally, Marley Spoon positioned their brand to appeal to young couples and “empty nesters” — but a deeper analysis found that “families” were also a promising secondary audience.
The team obsessed over data to find similarity patterns between different user cohorts. By analyzing CLV, demographics, and behavioral signals, Marley Spoon soon developed several profitable audience personas for targeting. That’s when their brand growth really took off.
Takeaway: “The curse of knowledge” — over-reliance on assumptions and dated customer research can steer your brand in the wrong direction. Back your hunches with real consumer data using brand monitoring software like Latana.
Also, don’t be afraid to pedal back on your decisions and drop unprofitable ideas or even markets. For instance, Marley Spoon chose to close operations in the UK because they couldn’t find the right customer cohorts.
2. Focus on Education For Both Brand and Product
Since day one, Marley Spoon has focused on articulating its value proposition.
After all, they weren’t just competing against other meal delivery services — the company was attempting to change fundamental customer behavior: entice people to order planned meals online instead of going to a supermarket.
To tip the scale in their favor, Marley Spoon focused on educating audiences both about their product and brand — and this approach is still present in recent marketing campaigns.
For a 2018 digital campaign in Australia, Marley Spoon used creatives that combined brand-building and product explanations. Each of the videos in the series was also designed for different audience segments.
An emotive family video promoted the joy of sharing a meal together. The second video promoted the idea of “quick”, “delicious”, and “fresh” meals anyone can cook.
After running the two as YouTube ads, Marley Spoon saw a 25% increase in brand awareness and a 49% increase in ad recall.
Aussie audiences grew more aware of Marley Spoon’s product. So, in 2020, the team changed the storytelling vector to appeal more to different user cohorts. The latest TV campaign showcases the many reasons why people love Marley Spoon — recipe variety, faster cooking, healthier eating, and so on.
As Ashleigh Becker, Head of Acquisition for Marley Spoon, puts it:
“If you speak with Marley Spoon customers, it’s rare that there’s just one thing they really enjoy. So we wanted to showcase all of these in a way that really cuts through.”
Takeaway: Select the right goals at different stages of brand growth. Product and brand awareness are solid metrics to pursue in new markets (and with new audience segments).
But, as your brand matures, look into other stages of your brand funnel. Analyze where consumers are most likely to drop off — and focus on fixing those leaks.
3. Use Customer Experience to Ward Off the Competition
One thing we all crave in our diets is variety. But sometimes, our fantasy doesn’t go further than a standard set of comfort foods — be it mash & bangers, mac n’ cheese, or spag bol.
Marley Spoon addresses this slight frustration by offering diverse recipe choices. But too many choices can be overwhelming, too. After all, people buy meal kits to reduce the cognitive load of picking recipes and doing meal prep.
To balance the risk of many choices with recipe variety, Marley Spoon developed an AI-driven recipe recommendation algorithm. The algorithm analyzes users’ common choices and offers personalized menu recommendations — pushing the most relevant recipes up top. The tool is also connected to a sales forecast model, which allows Marley Spoon to adjust their supply chain process. For consumers, this means faster and even fresher ingredients delivered to their doorsteps.
Kate Whitney, CMO at Marley Spoon, says that an extra layer of personalization protects them from the competition:
“The meal kit market is rife with this – there is a voucher game going on and people are switching brands. But if I can truly inoculate my base by providing solid, trusted delivery and meeting expectations week in, week out, consumers are less likely to be swayed by a $40 voucher.”
The brand positions itself as “premium” and continuously highlights “exceptional ingredient quality”, “premium add-on grocery items”, and “interesting twists to classic recipes”. Most of their copy is written to suggest that there’s “something extra” to this meal kit service — or else Martha Stewart wouldn’t have given it her seal of approval!
Takeaway: From product development and sales to customer service, there are many ways to put customer data to better use for your brand marketing. But to piece together a consistent brand experience, you need to educate all people on all teams about core brand values, overall vision, and main audiences.
Marley Spoon developed an appetizing recipe for growing its brand. Combine clear customer value propositions as the main ingredient, data-driven brand marketing as a side, and a hefty sprinkle of CX excellence to top everything off — and voilà!. You’ve got the recipe for a deliciously successful brand!
Of course, other FoodTech brands might work with a different set of ingredients. But they can definitely apply some of the “ingredients” Marley Spoon used — like in-depth target audience research, marketing creatives aligned to different brand funnel stages, and personalized customer experiences.