Nestlé-owned meal kit brand SimplyCook has turned a profit for the first time in its ten-year history as it switched focus from pursuing growth to the bottom line.
The company called 2023 a “watershed” year and said in its newly filed accounts that it moved into the black thanks to a “right-sized” plan, with lower marketing investment and disciplined cost management.
The profit contrasts with wider struggles in the meal kit category, where losses at Gousto have spiralled and widened at fellow Nestlé-owned brand Mindful Chef, with shares in HelloFresh plunging last month after issuing a profits warning.
SimplyCook also mitigated ongoing inflation by driving “very low” customer acquisition costs and increasing postage charges.
Cost of sales at the business reduced 21% to £6.4m in 2023, while administrative expenses almost halved to £6.8m.
As a result, SimplyCook moved from a £5.8m operating loss in 2022 to a £238k profit, with pre-tax profits of £73k.
Revenues declined 8% to £13.4m, however, as it scaled back efforts to win new consumers.
SimplyCook said in the accounts that it was “well placed” to return to growth in 2024 having made a profit and improved efficiencies. Founder Oli Ashness also expected the brand to be established as a “self-sustaining profitable growth business” going forward.
Nestlé acquired the business during the pandemic in 2021 at the height of the DTC boom, having also bought Mindful Chef in the previous year.
As well as its core ecommerce business, SimplyCook also sells a range of grab & go fresh meal kits in Sainsbury’s as part of a partnership with the supermarket.
SimplyCook did not respond to a request from The Grocer for comment
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