There Will Be More Tasty Shed Deals From The Food Box Bonanza
The meal-in-a-box business is serving up some tasty logistics property deals — and there are second helpings to come.
Gousto, the recipe box business that helps home cooks create meals from scratch, has signed up for 196K SF at a refurbished cold store at West Thurrock, Essex. The deal is with CBRE Global Investors, on behalf of the CBRE UK Property PAIF. The pre-let is on a 10-year lease.
“We’re looking to increase our capacity at least threefold by 2022 and this brilliant site in Essex will help us get there,” Gousto chief executive Timo Boldt said. “Demand for our meals accelerated as a result of the lockdown and we continue to see record levels of sales, even with the progressive easing of lockdown restrictions.”
Gousto is not alone in a new market sector preparing itself for a winter of growth. The prospect of a second lockdown, spurring further demand as it did earlier this year, makes summer leasing activity seem well-timed.
Just a week earlier, rival meal-kit subscription service HelloFresh signed up for 230K SF at Goodman’s Nuneaton 230 development. The warehouse, its second in the UK, came as the Berlin-based business revealed it reached 4 million customers in Q2 2020.
The boxed meal business was already expected to grow fast to £1.5B by 2022, and it now looks set to reach that target very much sooner.
The wider subscription retail model is also growing. Royal Mail figures suggest 27.4% of households are signed up.
The rapid rise of the subscription meal box model has eaten into sales of supermarkets’ £3B ready prepared dinner market. However, research from Mintel shows that the ready-to-cook market is cooling in the face of new boxed competition, the Financial Times reports.
The sudden transformation of a gently simmering market into a rapid boil has forced meal-in-a-box providers to recruit at speed, and rethink their business strategies.
New efficient chilled premises, super-smart warehouse software and proximity to abundant labour supply are part of the answer.
The Gousto building has an upgraded Ammonia Glycol chiller plant and four individually controlled chiller chambers, along with 32 ceiling-mounted coolers to ensure each chamber maintains a steady temperature.
The building is on the Tunnel Estate, which is close to junction 30 of the M25 and the A13, and will serve London and the South East.
The HelloFresh facility will provide frozen, chilled and ambient storage capacity and a mighty 3 million labour pool within 20 miles.
Gousto has replenished its war chest with four funding rounds, raising over £130M from leading investors including Perwyn Private Equity, Canaccord Genuity, Unilever Ventures, BGF, MMC Ventures and TV fitness guru Joe Wicks. It is now ranked 257 in the FTs list of Europe's 1,000 fastest-growing companies.