How AI is helping Gousto win customers and cut carbon

Technology can be a huge pain point for any entrepreneur, it can be hard to keep up with and, at times, it can even seem difficult to understand if you’re not an expert.

Gousto founder Timo Boldt is about to give you a brand-new perspective on the realms of technology and artificial intelligence (AI).

Despite not coming from a tech background, he has utilised AI to transform his business.

From cutting down on carbon emissions, to minimising food waste, and helping farmers improve their forecasting, he has truly embraced the power of artificial intelligence.

Gousto is now able to give customers suggested meals that use planet-friendly ingredients and encourage sustainable cooking practices, all at an affordable price.

With a clear vision to bring his customers the best value possible, Timo is nowhere near done with pushing the boundaries and intends to carry on his pursuit of technology to boost his business.

So what are you waiting for? Find out how you can adopt these new technologies and improve your own company practices.

Here’s his juicy unfiltered advice below:

• Providing food products that have a positive impact on people and the planet
• Using data to make impactful decisions
• Building an AI system from scratch—and licensing it to other businesses
• How AI can help you to cut carbon and become a greener company
• Gathering insights from AI and your customers
• AI will create more opportunities—not take them away
• Why should founders embrace technology?
• The value you deliver to your customers is what will help you to outpace your rivals
• Word of mouth is the best marketing tactic
• Life savings, student accommodation and 3am finishes—what it really takes to start your own business
• Transferring investment backgrounds into starting your own business
• Scaling a business is where the real money comes in
• Is the pressure from shareholders worth the money you raise?
• Achieving a higher level of market penetration with lower price points
• Helping farmers to improve their forecasting with AI
• Sustainability shouldn’t stop at your own business activities
• You have to take the lows with the highs

Providing food products that have a positive impact on people and the planet

Bex Burn-Callander:

So for the uninitiated, what is Gousto?

So what do people get in these kits? Tell me a bit about the product you’ve created.

Timo Boldt:

So you go in your app, on your website, on your mobile phone, you browse 100 recipes, you choose whatever you and your family love to cook, healthy recipes, quick recipes, fitness-related recipes. There’s so much choice, from vegan to pescatarian, anything.

And we deliver all the ingredients in exact portions to your door.

And so you still cook, but we make your life a lot easier, healthier, and more convenient. So you can focus on what’s fun, the togetherness, the eating.

It’s fresh from the farm, so high-quality produce.

And 87% of people in this country cook almost every single day, and so one billion meals are eaten every single week, lunch, dinner x 67 billion people, very basic maths.

And our share of stomach today is point, I don’t know, 0.2%, 0.3%. And so we are still on day zero or day one.

This is the very beginning of a long journey.

Bex Burn-Callander:

I love that. The share of stomach, I hadn’t heard that before, but I suppose it’s true.

You’re kind of vying with the supermarket shop and I don’t know, delivery services for takeaways and the home-cooked meal.

But what’s been driving take up?

So what is it that people are looking for when they sign up for Gousto? Is it all about convenience? I see that you take sustainability very seriously, is that another reason why people sign up?

Tell me what are the catalysts?

Timo Boldt:

So look, I founded Gousto in 2012, with a vision of being the most loved way to eat dinner. And so big focus on love, on customers. Very, very customer-centric company, very product-led.

And the purpose has always been, for 11 years now, to build products that have a positive impact on people and the planet.

And so today, 23% of CO2 emissions are taken out every single time you eat dinner through Gousto, versus the equivalent supermarket shop.

We’re pushing the boundaries, we’re getting plastic to 100% recyclable now, food waste to point something percent versus 20% in the traditional supermarket supply chain.

So yes, purpose and sustainability and health have always been parts of the journey.

And the big three trends we’ve seen in 2012, and I see today, have been and are sustainability, health, and convenience.

That’s driving the change in the market and then what we do is enable by technology.

Using data to make impactful decisions

Bex Burn-Callander:

And in fact, you’ve been quoted as saying that Gousto is a data company that happens to love food.

Can you tell me more about that?

So how have you created the mechanisms to harness the kinds of data that let you make really impactful decisions within the business?

Timo Boldt:

We’ve had lucky that since day one we had amazing people. And employee number eight was a machine-learning PhD.

And so he early on told us about the power of AI and data.

I had no clue back then. I don’t have a tech background, so I had to learn on the job, and it’s been massively fun.

But so early on, we tried to build data into everything we do, from a decision point, from a feedback loop perspective.

And early on we realised if we can make customer satisfaction amazingly high, we create this virtuous circle of great product, customers being super happy, referring more friends, being more loyal, buying more, and us therefore investing more and more into product experience.

And to create such a virtuous circle, you need a lot of data points to understand is it the delivery, the price point, the quality of the food, the cooking time, the choice?

There are so many components in this business model that you have to master, and the only way to ever do that is through data and really understanding what customers tell you.

Bex Burn-Callander:

And how do you get that data?

So are you asking customers what they like best? Or is there a way of getting this data without having customers go through a review process or a feedback process?

Timo Boldt:

So one of the early insights was in 2012, we asked people, what do you want to eat? And just like myself, everyone said, healthy salads, high protein, low-carb stuff.

And then we actually looked at what people are choosing.

And just like myself, they were choosing burgers and sausages and Italian pasta.

So early on we had this belief that yes, you have to ask customers what they want, but equally it’s really, really important to infer from their behaviour what they actually buy every single week.

And so today, Gousto has developed I think 6,000 recipes.

And every week, a piece of AI, effectively the personalisation engine, is choosing which ones out of these 6,000 recipes go into the 100 slots you see on the menu.

And that changes on a weekly basis and takes into account seasonality, weather patterns, obviously cost, how many ingredients per meal, and so on, to optimise the experience at a user level.

Building an AI system from scratch—and licensing it to other businesses

Bex Burn-Callander:

And this sounds incredibly complicated in terms of like have you built this system, this AI in-house? Or did you buy a system off the shelf and modify it?

How did you access that level of granular personalisation?

Timo Boldt:

So we build it from scratch, because there’s nothing out there that was available off the shelf, otherwise we would’ve tested it.

And so we build it slowly and over time, we added more and more and more data into the engine.

On day one, maybe we had how did people rate the recipes, how many fish and veggie recipes we wanted, so very basic kind of design principles of what makes a great menu.

Today, this is way more complex, 200-plus factors are taken into account, availability in the supply chain, what does Farmer Joe say about the rain forecast and so on.

And so it’s become quite complicated over time.

What we actually do today is we license that software to other businesses. And so we have a business that’s called Bento, that takes the Gousto technology and offers individual items of technology to companies in totally different sectors.

We have an Australian company that does gin and whiskey subscriptions. We have female razor blade subscription businesses in the UK. And so it’s a very diverse set of companies that actually use these pieces of technology Gousto has.

How AI can help you to cut carbon and become a greener company

Bex Burn-Callander:

And I’d love to hear more about how AI has helped you be a greener company, because the downside of convenience historically, has been that it comes with an environmental cost.

Like often there’s a lot of packaging, ingredients go from pillar to post before they reach you, they get processed a lot.

But you’re managing to strip out all those carbon emissions and all that extra process.

So tell me how you did that and also how AI is helping you to make continuous improvements in that way?

Timo Boldt:

It’s one of the saddest things in the world when you look at food waste and how food waste is contributing to CO2 emissions.

Whereas the reality is often there’s win-win, if you take out some packaging, it’s great for cost, and it’s even greater for the environment.

And so we started early on to realise that there are tons of win-win situations. We then became a lot better in applying technology.

So forecasting is a huge domain or area of focus for us. The better you’re forecasting, obviously the lower your food waste and the better the shelf life for the customer.

And so we use AI in forecasting the personalisation engine I mentioned, what goes onto the menu, how you run your supply chain?

Do you put tomatoes on one station in the factory, 100 stations, the first station, the last station of how the box travels through the factory?

No human has any clue how to ever solve that optimisation challenge.

And so we build a lot of fulfilment AI, automatic order allocation, where to allocate the order, which factory, which shift and so on.

And so over time, we built a lot of technology that overall means that every single time we update the algorithms, our CO2 emissions go down.

And that’s really, really fun.

And just to bring this alive, when we challenge the data science team to make the menu 10% greener, but don’t tell the customer, make sure that the customers love the satisfaction level is higher or the same, but it cannot be lower, they tried to figure out how to do that.

Again, no human was able to.

And then when we unleashed data science and AI, suddenly we were able to take another 10% of CO2 emissions out of the menu from an impact perspective and customers didn’t notice.

You still have amazing choice on the menu, your satisfaction is even higher.

And so technology can play a massive, massive role in CO2 emission reduction.

Gathering insights from AI and your customers

Bex Burn-Callander:

But it sounds like madness, because AI doesn’t have taste buds, so how can it account for things like flavour?

So you’d imagine that if you gave AI the task of making a recipe more efficient, they might strip out one expensive, unreliable ingredient like basil or something, but then it wouldn’t taste as good.

So how on earth do you teach this computer what tastes goods and how you can’t tamper with that side of the meal?

Timo Boldt:

Yeah, it’s a great point.

Look, we have magician chefs and product designers that work tirelessly on making sure the meals are as amazing as possible.

We have nutritionists working with them, photographers, food stylists and so on. So it’s a big, big, big team that makes it possible for customers.

At the end of the day, what we see is data is augmenting these product people.

And so if I’m a chef, I might be crazy creative, but the algorithm can tell me what type of cuisine people are looking for, what they most like in February, March, summer.

And so I effectively get an insight from the AI, what people are searching for, what they want to eat based on season, weather forecast, everything. And then I get to be extremely creative.

And so you still need the person being the magician. The AI cannot design the recipe, but the AI gets the most out of the person and accelerates that process.

Then secondly, look, we have amazing customers, we love our customers. Customers are putting in millions and millions of reviews every week.

Thumbs up, thumbs down, did you like that recipe? Was the cooking time accurate, and so on.

So roughly 25% of recipes are rated every single week. And so you have this enormously rich data flow telling you what customers love, when and why.

And if customer Bex is from this segment, how does this segment behave? Are there people who look similarly to Bex, and therefore we can make a recommendation to you as a customer, based on people who look similarly?

Or do we just look at Bex’s previous behaviour and therefore look at what looks most similar to what you previously ordered?

So there are different types of algorithms, very similar to what Netflix would use or Spotify would use.

AI will create more opportunities—not take them away

Bex Burn-Callander:

And your point about, I suppose, the relationship between people and technology is really fascinating.

Because we’ve been hearing for years that AI is coming, it’s going to take your job, that’s it, your career is over.

But the way that you describe that interaction, no human being could possibly do the number crunching that this AI is doing.

And so people are still contributing, and their job is still as important, but it’s just they get to focus on a certain kind of high-value activity while the AI does the numbers.

Is that true or is it that the future you won’t need the chefs, the AI will do the amazing magic making?

Timo Boldt:

I think there will be more jobs for people than we have people. We are probably underpopulation as a big risk for human society in the next 100 years, but there will be tons of jobs and these jobs will just be higher paid jobs and better focus and so on.

And so I am hugely optimistic about AI and technology creating wealth for much bigger chunks of the population.

I am fully aware of the risks in AI and the bias issues. Who’s training that data?

Well, it’s a bunch of people living in California, and so the recommendation is totally biased. It makes no sense to me if I locally search for something.

And so there are tons of risks, and we need ethics and governance, but the big point is AI will make everyone’s life better. And most likely, you and I don’t notice the day when AI really makes our life better.

But over time, just like how we’ve been using iPhones since, I don’t know, 2007, and it’s gotten better and better every single year, but neither you nor I can say, “Oh, it was 2011, it was version 5 that transformed everything.”

So it’s a gradual process of improvement, taking cost out, putting joy in, making things better, taking CO2 emissions out.

And it’s just amazing what opportunity lies ahead.

Bex Burn-Callander:

I like that. We’ll just be working less and getting paid more. That sounds like a good outcome for everybody.

Why should founders embrace technology?

Bex Burn-Callander:

And you mentioned right at the start of this chat that you are not from a tech background, and yet you seem so embracing of technology. And I know it must have helped that employee number 8 was this machine-learning specialist.

But for other founders, how do you recommend, what ways can you offer that they can embrace technology as you have, and be open to new ways of working that involve technology?

Because it’s not always that straightforward for people, is it?

Timo Boldt:

Look, there’s been a study done across 46 years, that looked into why are some companies succeeding, whereas 90% of startups fail, or 90% of VC-backed startups fail, or whatever the statistic. It’s a big US study.

And the conclusion was that the number one differentiator is the ability to learn and adapt and pivot when you need to pivot.

So to me, since we founded Gousto, one of the key kind of cultural pillars has always been growth mindset, and how do you get everyone to learn, and how do you create psychological safety so that people feel safe to admit errors?

And instead of blaming people, we create this culture where people say like, “Oh, I messed up X, Y, Z, I reflected on it and next time I’m committed to making X, Y, Z change.”

And therefore it’s really beneficial to have errors in the system because nothing ever works perfectly.

And so I think it’s that learning mindset, beginner’s mindset, starting from scratch, assuming that I know nothing every single day and I get to learn from you Bex, I get to learn from every person I meet in the Gousto office, our customers, that I think creates this osmosis process that then leads to innovation.

So we hire people who love technology, who are really open-minded, who have growth mindset, and who don’t feel threatened by technology every day.

The value you deliver to your customers is what will help you to outpace your rivals

Bex Burn-Callander:

Because I was going to ask, back in the day, there were a lot of recipe box kit. It felt like there was a new one launching every five minutes.

There was a point where I was getting 15 press releases every week, and it was all, there was one that was only keto and one that was only paleo. It was ridiculous.

But you’ve managed to outpace rivals and go the distance. And presumably, this growth mindset is a piece of that puzzle.

But what are the other reasons why you’ve managed to succeed where others have failed?

Is it all down to this growth mindset and the tech, or is there other stuff at play?

Timo Boldt:

That’s very kind. Thank you. Well, I think it’s an industry where the barriers to entry are really low.

You could start a meal kit company tomorrow, and I’m sure you would have amazing recipe ideas.

But the reality is that the barriers to scale are enormous, because we have built £100m factories that are highly, highly automated.

And so it’s really hard to scale this model up to a decent size. And if you really want to give customers value, I think you have to have a very customer and product-led strategy.

And I think a lot of companies that entered this market had a very marketing-led, discount-led, short-term optimisation-led strategy.

So our philosophy always has been that if our product is better by an order of magnitude across what really matters to you as a customer, value, taste choice, then we will grow and grow and grow.

And so we try to keep ourselves really honest. Are we getting better on quality? Yes, no.

What are we doing about it? And can we make it 50% better, not 10% better?

And so I think if you have that mindset where every single day you want to deliver customer value, and you want to innovate the proposition.

Why is the lead time three days? That makes no sense. Make it one day. Well, it’s complicated to also have 0% food waste.

And so you’re going to innovate every single process and build capabilities to tackle these really, really big problems.

Every day somebody in the team says, “Oh, this is so hard, we cannot do it.”

But the reality is we are doing it because it is so hard, and it creates so much value to the customer. And if we can then pull it off and do the stuff that’s hardest, it creates this moat around our business while delivering huge value to the customer.

And so I think it’s that mindset of customer first, huge value focus. Are we making this better? Yes, no.

By an order of magnitude, every single quarter, year, week, whatever. Then I think we will go bigger, bigger, bigger, and double again in the short term. And it’s really basic.

Business sometimes overcomplicates, but it is only about the value you deliver to customers.

Word of mouth is the best marketing tactic

Bex Burn-Callander:

And when it comes to winning new customers, because you’re right, there was this sort of race to the bottom with price.

And I remember seeing all these offers, first box free and second box is 50% off. And I just remember thinking, how on earth are you going to stay in business? You can’t run a business like this.

But it must’ve been that the cost of new customer acquisition was so high, that it was almost worth losing money on that initial interaction.

So how do you win new customers without massively denting your margin?

Is it all referrals or have you figured out a really clever way of getting people to try and to stay?

Timo Boldt:

So half of new customers roughly are referrals. And so if I put £1 into product and the product becomes better and your happiness as a customer goes up, I effectively just refer more customers.

And so product is my biggest marketing investment. And I’m putting huge, huge chunks of technology and product and data teams behind product instead of just marketing, if that makes sense.

So you have more levers than just plain vanilla marketing, you have this massive kind of product growth engine.

We do also do traditional marketing. I’m hugely proud of the team’s work around the brand, the brand message, the cleverness of the brand, the storytelling behind it.

And so we are big believers in brand marketing, above-the-line marketing out of home radio, podcasts, everything.

But I do think the biggest channel by far is word of mouth, and it links back to the strategy that’s so focused on product innovation.

Bex Burn-Callander:

That’s such great advice. And it is just always the best recommendation, because it’s free, and it’s meaningful, and it comes from someone you trust.

So yeah, referrals are always the way to go if you can get them.

Life savings, student accommodation and 3am finishes—what it really takes to start your own business

Bex Burn-Callander:

Timo, I’d love to for you to cast your mind back now. Because I’ve read a little bit about the legend of how Gousto got started.

And it just seems amazing to me that I think you were working at a hedge fund, and then you had this idea and then you sort of jacked it all in.

And then did you and your wife move into student halls while you did?

Tell me about the origin story.

Timo Boldt:

Wow. Good research, yeah.

Bex Burn-Callander:

Yeah.

Timo Boldt:

I worked in investment banking, that was my first job, and then I moved into a hedge fund.

And look, I’m quite geeky. I like numbers and data. But I never saw the purpose, I never saw me doing this for 10-plus years.

I wanted to do something that has a positive impact on people and the planet. And so I stepped out of the hedge fund in 2012 to found Gousto, and it was chaos.

I had no salary, I invested my entire life savings.

Yes, we moved into a student accommodation, one-bedroom flat, 90 minutes outside of London. Commuting in every morning at 7am, going back by 9pm, hugely draining, but you got to make it work somehow.

And then every week on Wednesday, we would carve out the office, we would take the desks out, and we would package in the office one day a week, and I would crash at a friend’s place at 2am, 3am, and then we would be back in the office again.

And so just completely humble beginnings, chaotic beginnings.

I hand-delivered recipes myself. I designed recipes. I shot them on a basic iPhone. I did them in PowerPoint, the recipe card, but you got to do what you got to do.

And it’s enormously fun and I miss these times. They’re enormously fun when you go from 0 to 1, and you have no idea if you ever find product market fit.

You meet amazing people, you make friends for life, it’s an adventure.

But I am also glad this time is over, and it’s been very chaotic. And now we have an amazing team. We have 1,000, 1,500, 2,000 people, and they are absolutely amazing.

And so today has so many different benefits versus what we had in the early days.

But yeah, it’s been a long journey and it’s been very fun. I’m very grateful to where I am, and it does come down to our team.

Transferring investment backgrounds into starting your own business

Bex Burn-Callander:

And that’s interesting about your background, because in the 15 or 20 years that I’ve been interviewing founders, I do see a lot of people with a background in investments.

They come out of these careers, they’re unfulfilled in one way or another, but they do tend to build really robust businesses.

So what would you say that you learned working either at the hedge fund or just in the investment space that stood you in good stead to create a really robust startup?

What were the lessons that transferred really successfully from one realm to the other?

Timo Boldt:

So Gousto’s culture is really focused on dream, deliver, care.

And I think the stuff that has prepared me the most is both on the dream side, thinking really big and not focusing in too much.

And then on the deliver side, I think what I learned is I gained this little toolbox of analytical and commercial skills that allow me to focus on impact.

If we have finite resource, do we do A or B because we can’t do both, otherwise we’re out of money, we’re bust.

And so that focus on impact mindset and looking at data and analysing the data and making decisions in a back-of-the-envelope way, rather than building a huge spreadsheet is a really, really powerful skill set that I learned in the hedge fund and banking times.

Yeah, it’s probably that skill set, focus on impact.

Bex Burn-Callander:

And I suppose also, you have raised an awful lot of money in history of Gousto, mind-boggling figures, and I’m going to ask you about that.

But being quite rigorous in how that money is spent and being sure that you know how much capital is earmarked for which particular project.

Because you do see a lot of founders, they get a huge injection of VC capital, and it just gets burned in a ridiculously short time with nothing to show for it.

Whereas, I suppose, because you understand numbers, the value of money, maybe that could be a contributing factor.

Timo Boldt:

Potentially, look, I wish I had raised less money, but I’m very grateful to all the people that have supported us, and I love our shareholders.

We have thousands of people now supporting Gousto financially.

And I mean, I see this as a core discipline. Where do you need to go 0 to 1. And by that I mean what is product market fit? And do the unit economics really foreshadow financial success?

And I couldn’t care less about revenue in this stage.

The only thing that matters to me is Bex as a customer, happy? Yes, no.

And are we then making money on that, and are we building a sustainable, financially sustainable business?

Once you are in the 1 to 100 stage, the question is how can we make Bex even happier? How can we make this more efficient? Can we do this in two months, not four months?

And it becomes an efficiency optimisation equation, and you need very different mindsets across these different stages.

And so if we launch new businesses, new revenue streams, we have this 0 to 1 mindset in these new areas. And then in core Gousto, we have this one to 100 mindset where it is about rigour and discipline and protecting the customers and so on, and innovation at scale.

So I would say that intentionality about where you are and what success is vanity and what is sanity is extremely important.

And I think in 2021 when capital was so cheap, you saw a lot of people getting carried away, conflating luck and success, and skipping that 0 to 1 phase and jumping straight into 0 to 100 and then running out of cash.

And so, to me, discipline and intentionality have been really useful.

Bex Burn-Callander:

I love that phrase. It’s like turnover is vanity, profit is sanity. I remember hearing, it was always drilled into me when I used to interview business owners.

Scaling a business is where the real money comes in

Bex Burn-Callander:

But that point about investment.

So you mentioned that the barrier to entry in a business like this is very low, but to achieve real scale takes money.

So can you take me through the investment history?

When did you first realise that you needed to get a big cash injection, and how did you decide how much?

Just tell me a bit about the capital journey of the business.

Timo Boldt:

So at a very high level, in 2012, I invested my life savings. And then I think by late 2012, a couple of friends and family invested a very modest amount.

And then in 2013, so one year in, we appeared on Dragons’ Den, and we didn’t take the offer, we walked away, but we had a term sheet which we presented to the Dragons.

And we said, “Look, you have to match this valuation. These are really credible people from the food industry, and they want to put two £250,000 in. Can you match them? No? Okay, thank you.”

I mean, in a nutshell.

And so we had these angels that invested £250,000 and they really kicked us. Like, “Timo, you are giving away free food. This is not a business. This makes no sense.”

And they really, really challenged us to the core from a food safety perspective, from a hygiene perspective, from a sourcing perspective, going to the farm, smelling the tomato. It was amazing as a catalyst.

Then in 2014, so two years in, we raised our first venture capital round quickly, we added two more venture capital firms.

And they helped us mature the board decision-making, take risks where we’re supposed to take risk, de-risk where we’re supposed to de-risk, and again, be intentional about where innovation is important and where you have to de-risk food standards and so on.

Then over time, we’ve raised a lot of money, hundreds of millions from much more institutional capital, family offices, private equity, SoftBank, Fidelity, very late-stage funds.

I think the common denominator of all the people we have on the share register is that they passionately believe in the purpose, they passionately believe in the long term.

We’re not going to flip this. I’m not going to sell out in the next whatever. I want to run this for as long as possible. And that needs a certain mindset as a shareholder.

There is no IPO in whatever, six months, and you get all your money back. No, we want to run this, we’re in it for the long run.

And the only thing that matters is, is this good for the customer?

And if an IPO or a fundraiser is good for the customer, we’ll do it, but it has to be good through that lens. And so we’ve been really fortunate.

We have amazing shareholders, MMC, Unilever Ventures, and so many of the early stage funds in the UK, BGF Ventures, Conicor, Pervin.

I can’t name them all, but they have been amazing partners, and I am very grateful.

And from every single person that came into the Gousto journey, I learned one or three big things and they have shaped my thinking. And they have become partners, and it’s been fun.

And you go through ups and downs, and only when you go through big downs, you realise who are the most amazing partners on this journey.

And so far, I’ve had amazing partners, and I’m very lucky, because it’s not a straight line, you go up and down.

But yeah, it’s been a big learning curve.

Is the pressure from shareholders worth the money you raise?

Bex Burn-Callander:

And you said a moment ago that maybe you wish that you hadn’t raised quite so much money.

Because it’s a lot of pressure, isn’t it?

And it’s a lot, especially when you’ve got so many shareholders, there’s a lot of different, I suppose, demands, but also outcomes that these different shareholders are seeking, and they all have different appetite for growth, and they all want to push in a different way.

So if you had your time again, do you think that you would do more organic growth and maybe less VC and big investment rounds?

Timo Boldt:

99% of the time, I am the happiest person in the world, and I’m extremely grateful to all our shareholders. And then there’s one day where I think the grass is greener, and I wish I had built a smaller business that had no shareholders and so on.

And so I think the ratio 99% to 1% in favour of what we’ve done is pretty robust.

And so I have absolutely no regrets. I think it made perfect sense.

And there’s this bifurcation point, where you need to decide what type of founder are you, what type of business do you want to build?

And to me, what was clear is that if we want to have impact on the planet and all people, not just like a few hundred, we needed to raise a lot of capital, we needed to build infrastructure, factories.

My vision has always been to cater for the masses, not the classes.

And to do that, you have to build infrastructure that brings down the price point, you have to leverage technology, hire hundreds of developers and AI engineers and so on to make it happen.

And so no regrets. I love our shareholders. 99% of the time, I’m happy, one time I do fantasise how would it look differently?

But no, 99% of time it’s awesome.

Achieving a higher level of market penetration with lower price points

Bex Burn-Callander:

That’s a cool mission, for the masses, not the classes.

So would you like every single person, every family to be able to afford to do things the Gousto way? And how achievable is that?

Especially because we are living at a time when there are massive gaps in terms of the nutrition and food education and there’s an obesity crisis and there’s cost of living pressures.

So how many years will it take you to achieve that level of market penetration?

Timo Boldt:

I love the point you’re making and the question.

And every morning, all the stuff that you just mentioned pains me. I get up, and it pains me.

57% of diet in this country is ultra-processed food, and it’s so bad for your lifespan, your health span, your mobility, every part of your life. And it’s hugely sad.

For kids, I think it’s 80% ultra processed.

If you look at poorer demographics, it’s so bad the diet, and it literally cuts your lifespan by five to 10 years.

And so I do see food as medicine.

And I see this huge responsibility and opportunity for us to push into the space and make lives better.

And so should the price point lower or higher in the next 10 years? It should absolutely be lower.

We work super, super, super hard to only pass on cost to the customer if we absolutely have to.

And so if you look at the last three years of hyperinflation, 20% inflation in grocery, we’ve done the absolute minimum. And so our value for money has gone up and up. That’s a massive driver to me.

But there are also other product parts.

Can we one day give cancer patients meals that are fit for purpose and make their life or situation a tiny bit more beneficial?

And so in the next couple of years you can expect lots of collaboration with universities, with the NHS. We’re going into testing mode.

We’re taking people’s health and stress markers and biomarkers, we’re putting them onto Gousto diet. We want to see what the impact is. We want to give people more of your five a day.

And so there’s a huge amount of opportunity.

Also, personalised nutrition. Since we built these hyper automated factories, can we push more into personalised nutrition? Gousto today offers three times more choice than the closest competition. And so huge, huge choice at a personalised level.

But it is only day one, and so there’s a lot of opportunity in the health space and really impacting people positively.

Bex Burn-Callander:

Wow, I had no idea there was that much going on behind the scenes. You just wouldn’t think the potential that just putting together a healthy, nutritious kit could have over the long term.

It boggles my mind a little bit.

Timo Boldt:

Scary.

Bex Burn-Callander:

It’s scary, but it’s wonderful.

Helping farmers to improve their forecasting with AI

Bex Burn-Callander:

And on the flip side, if we look at things like food security, you mentioned having this algorithm that looks at, for example, the impact of rainfall on the potential of a crop to even appear in the first place.

And I’m talking to you from York, and York has just had insane flooding. We’ve got farmers around here who’ve literally seen their hard work under three feet of water.

So I’m interested to know how you work with the suppliers and across the supply chain to help them as well and ensure that they have a partner that supports them.

So tell me about that side.

Timo Boldt:

So farming is really, really important, because over the last 50 years you have seen a lot of consolidation and the big farms buying up everyone.

And so working with independent farmers who deeply care about quality and have done this for 100 years is really important to what we do.

So one of the key initiatives for us is how do you give technology capabilities we build to farmers, to the supply chain?

So forecasting, a lot of the forecasting we see across farmers we work with is like the most basic forecasting. It’s done in an Excel spreadsheet, if even, or in paper, and it’s just not robust at all.

And so if you can give these people some AI capability into forecasting, you literally save them so much waste and so much effort, and you make their livelihood a bit better.

And so a big push is just how do we collaborate around technology? Another big area is how do you make the supply chain fit for purpose?

So for example, for Gousto to decarbonise, we probably need to pay for some electric tractors in the supply chain, and solar cells for the farmers who might not be able to afford them.

And so increasingly, if we want to really take the CO2 emissions out, we depend on the farmers because 90% of CO2 emissions sit in our supply chain.

And so a lot of innovation and technology collaboration is happening.

Sustainability shouldn’t stop at your own business activities

Bex Burn-Callander:

And that’s the point, isn’t it? When you want to talk about being a sustainable brand, you can’t just stop with your own activities.

You’ve got to look at the impact of your organisation across the whole supply chain, even to what your customers do with your packaging.

So on that point, what’s next for you on the sustainability journey?

You mentioned helping farmers. How are you going to help your customers do even more to avert greenhouse gases, carbon emissions?

Timo Boldt:

There are a couple of big, big, big points. One is the supply chain we talked about a bit. Then there’s the packaging in itself.

Every single item of packaging has to be compostable, reusable, recyclable.

We’re now at like 80%-ish. Why not 100%? It needs to go to 100% as fast as possible.

Why do I have to take the packaging away from the stock cube? Just chuck it in there and wait until it dissolves in water. And so there’s so much innovation on the packaging field we need to tackle.

Then I think it’s the menu itself.

Stating the obvious, if you take beef off the menu, you have a greener menu, but we want to do it in a way that you as a customer feel like this is for me, this is amazing. I’m not compromising.

Because this is how you have mass market impact in terms of CO2 emissions.

And so we’ll work a lot with data science and the chefs and the product team on how do we make the menu greener, because that’s where the CO2 emissions are, and then work with the delivery companies to make all the cars green, they use. Help with forecasting, help them with routing algorithms.

And so a lot of work.

And in the best possible way, we will not ask customers to help us. We’ll do it for customers. We really want to be that mass market proposition.

And if you as a customer feel like you’re paying for sustainability, it’s easy to opt out. In a cost of living crisis, I think it’s too much to ask customers.

The duty is upon us. It’s our purpose, it’s our mission we’re on. And so the ball is in our corner to just make it greener and greener every year.

Every year we report on our sustainability goals. We do it publicly, it’s very transparent. And so that’s where we want to push the boundaries.

Bex Burn-Callander:

It’s so fascinating, isn’t it, that food has become such a loaded concept. It used to be food was about pleasure and about sustaining your own life.

And now it’s got all these other stuff going. It’s all these other considerations.

Talking about ultra processed food, we’re worried about putting on weight, we’re worried about the emissions that our food puts into the planet.

It’s really hard, isn’t it?

There’s just so much to think about when you are just looking at a plate of food now.

Timo Boldt:

Yeah. It’s a great point and it’s deeply personal. If you eat a lot of protein, you probably encourage muscle growth.

If somebody who’s got cancer eats a lot of protein, the cancer might grow. And so I think the clear insight is, and it’s dawning up upon us as population, is that food has to be personalised.

And today you and I are ordering the same food, and we’re eating the same portion, but it actually doesn’t make sense. It should be personalised.

So I think the next 10 years will be enormously fun and rewarding.

Yes, it’s loaded, and a lot of information will come, but companies such as Gousto can really have profound impact on customers.

And 10 years ago we didn’t really know how we can unlock that, and today we at least have a hinge of how that could play out.

You have to take the lows with the highs

Bex Burn-Callander:

And then I just wanted to ask you, because Gousto’s had this long life, it’s been in business 12 years, and you mentioned earlier that it hasn’t been a straight line up. There’ve been ups and downs.

So can you tell me about a massive high point, something that really sticks in your mind as, wow, you’re standing on the summit, at the top of the mountain, great moment?

And then similarly, can you tell me about a real low point where you just thought, what have I done, or this was a terrible mistake or I’m going to lose it all?

Can you tell me about those two polarising moments?

Timo Boldt:

The low point, running out of cash in the early days. Or the beginning of Covid when we didn’t know whether we could operate factories safely.

We were a critical part of feeding the vulnerable, the population in the UK, collaborating with the government, but you have to keep your people safe.

And in March 2020, no one had a clue how to do that.

So that was one of the lowest points, where we had calls every single day a couple of times to understand how to keep people safe, while being there for customers when they need us the most.

That was, on a personal level, very, very hard because you have to ask people to get into dangerous territory, put their lives at risk to a certain extent, to keep on delivering.

That was one of the hardest moments.

Look, in terms of the best moments, it’s seeing the impact we have on customers. It’s the smiles we get from customers, the positive reviews.

People send us letters saying, “Look, my cancer has improved.” There’s no science that creates a direct link, but people are so passionately about what Gousto does in their life, and I think that puts a huge smile on our team’s face.

Hiring really special people, rewarding really special people. I work with people who joined Gousto as interns 11 years ago. They’re now at VP-level jobs, and that is the biggest joy, seeing their potential being unlocked.

The thing I’m most proud of is all people and culture and seeing their potential being unlocked and seeing them do amazing stuff for customers and them growing and getting more and more and more income and more benefits.

That’s really special on a personal level.

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