The hungry 26-year-old who set up a £100m food firm
- Published
Timo started the business from the lounge of his London flat
The BBC's weekly The Boss series profiles different business leaders from around the world. This week we speak to Timo Boldt, founder and chief executive of meal kit business Gousto.
When Timo Boldt was a go-getting 26-year-old finance professional, he says he never had the time to go to supermarkets.
Working long hours in London in 2012, he longed for a convenient, easy way to cook and eat decent meals at home.
"Even if I did have the time to cook, some food would be wasted, and sometimes online recipes didn't make sense," says Timo. "I thought, how do I solve my own problem, and make it easier?"
Researching the issue, Timo says he realised that what he and other time-poor people needed was a firm to send them regular meal kits in the post. The boxes should include all the ingredients already measured out, and easy to follow recipe instructions.
The recipe box sector is now well populated, with rivals to Gousto including HelloFresh
At that time, seven years ago, there were a few firms that had already started to do this, such as Germany's HelloFresh. Timo guessed that the market was going to soar, so he decided to quit his finance job, and bet on launching his own meal kit business called Gousto.
Fast forward to today, and he says that the company is set to see its current annual sales exceed £100m, and it has secured the same level of investment.
Along with other rivals such as Simply Cook and Mindful Chef, Gousto is now part of an industry that some estimate to be worth £1bn a year in the UK alone. Globally, the meal kit sector is predicted to hit $9bn (£7.2bn) by 2025., external
Currently expanding its workforce from 500 to 1,200 people, all employed in the UK, Gousto is now a far cry from its humble beginning in Timo's lounge.
Born and raised in Berlin, Timo had moved to London in his early 20s. When he quit the City to launch Gousto, he used £75,000 of his own savings, and was then able to raise £130,000 from family and friends.
"When I started, I was running it from my living room with no funding," recalls Timo, who is now 34. "I went from high salary to no salary. I tested recipes all day, and very quickly managed to get my friends and family to try the boxes."
Gousto sends out tens of thousands of its boxes every month
Unable to pay himself a wage for the first three years, he says he survived on "insane levels of optimism". Like many founders, he adds that in the early days of the business he tried to do every job, even if that affected his family life.
"I gave customers my personal phone number, which my wife hated," he says. "People would call at midnight asking where their delivery was. It gave me a good sense of learning how to scale yourself out."
Initially selling the boxes from a stall at a market in east London, the company slowly built up its online presence through word-of-mouth and advertising. Timo also appeared on BBC entrepreneurship TV show Dragons' Den in 2013, but failed to secure any backing from the five business leaders. This was after he had revealed that Gousto was losing £25,000 a month at that time, and already had been offered investment from elsewhere.
Today it has a head office in Hammersmith, west London, and its own factory in Lincolnshire, which sends out an average 250,000 chilled and insulated meal kits a month. The average customer is said to be a 40-year old with young children.
The business does, however, remain loss-making, but Timo says this is deliberate as it instead focuses on growth. "We could be profitable but [we are instead] are investing intensively,"
Nick Carroll, associate director of retail at research group Mintel, says meal kit deliveries appeal to people who are affluent, and those with young families.
The convenience of Gousto and its rivals is said to be a big reason for their popularity
"This speaks to both the convenience they offer, and the work that the likes of Gousto have done to appeal to affluent time-pressed younger parents, in creating a service that allows for the quick and convenient creation of meals," says Mr Carroll.
However, he adds that there are challenges ahead for Gousto and its rivals.
"There is inherently extra packaging for meal delivery kits, and given that many online shoppers already say that the amount of packaging makes frequent online orders less attractive, this is a difficult obstacle to overcome," says Mr Carroll.
Timo says that Gousto is working to reduce the amount of plastic and packaging it uses. "We are now leveraging technology to reduce plastic by 50% this year from an already lowered base point," he says. He adds that the company is also looking at novel alternatives to plastic.
Timo says Brexit has caused some worries
The business also says that it works to limit food waste in its own supply chain by using computer algorithms to predict demand for its more than 40 different weekly recipes.
Another issue that Gousto has to wrestle with is the price of its boxes, which it did reduce by between 10-15% two years ago. They are still not cheap though. Currently a box of two recipes to feed two people costs £24.99, which works out at £6.25 per portion.
Timo says that it was able to cut its prices in 2017 as a result of the business growing and developing more economies of scale. "We want all the population to be able to afford this," he says.
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Looking ahead, Timo adds that there are currently no plans to expand Gousto outside of the UK. He does however worry about the possible impact of Brexit, and whether this will put off talented foreign people from wanting to live and work in the UK.
"I see a lot of macro level risk [from Brexit], but I'm positive about Gousto and home cooking especially in times of uncertainty."