Recipe box company Gousto is on the verge of experiencing booming profit despite the flickering economic situation.
The pandemic has fueled inflation and recession around the globe. Following this, businesses have faced lower demand, turbulence in supply chain demand, and a fall in investment. Since the global economic shutdown, companies have been trying to mitigate financial hardships.
Likewise, Gousto has been the victim of these economic headwinds. For the first time in its 11-year history, the leading meal delivery service experienced reversed rapid growth. As a result, its losses in 2022 distended to £160m. With a year-on-year reduction, the company reached a collective loss of £306.7m by 31 December 2022.
From its trembling financial condition to cutting its 1,750-strong workforce, Gousto has been trying to combat economic challenges since the pandemic.
Despite such circumstances, Gousto has proved that every cloud has a silver lining. Hence, with the help of excellent financial management, the company has turned the tables and generated positive cash flow. The first quarter of 2023 has been highly productive, surpassing a significant revenue milestone and gaining a revenue of over £20 million.
Strategic Gousto Approach to Curb Financial Loss
To bring the firepower to ignite its financial engines, the business implemented certain strategies.
Firstly, the Ukraine war spurred double-digit growth in food costs, thus an aim to sustain this growth. Moreover, to minimise the impact of price hikes, it also integrated AI technology to increase automation across its production facilities. This way, customers can select weekly menus from its vast data bank.
Furthermore, Gousto halted its investment in the launch of its two new production facilities for managing production capacity. Whilst steering Gousto back on the course of productivity, the company collaborated with London-based private asset manager Signal Capital Partners on a new £30m debt facility.
Having agreed on this new policy, stakeholders predict an additional revenue of £100 million by the end of 2023.
Addressing this financial turnover, Founder and Chief Executive Timo Boldt said, “We have returned the business to profitability in 2023 whilst also pushing forward on our purpose to build an amazing product with a positive impact on people and the planet. Gousto has protected customers from spiralling food inflation during the cost-of-living crisis and in doing so has increased our relative competitiveness against the traditional grocery market.“
Despite striving for sustainability, Gousto is also struggling to positively impact people and our planet. Following the megatrend of convenience and health, the business plans to use 23% less emissions than other supermarkets. Hopefully, this can lead to the company’s profitability and ecological sustainability.
