TV presenter and doctor Elena Malysheva sold her 50% stake in Diet of Elena Malysheva LLC, a business that delivers ready-made diet kits for weight loss. One of the reasons could be a four-fold decrease in revenue over four years. It is becoming increasingly difficult for small players to compete with large operators, market participants say, as production and promotion costs have risen markedly.
TV presenter Elena Malysheva in June lost 50% in Diet of Elena Malysheva LLC, the manager of the business for the delivery of ready-made rations, Alexandra Lomovtseva, discovered “Kommersant” in the Unified State Register of Legal Entities. The remaining 50% remains with her partner, Vice-President of the World Forum of Russian-Speaking Jewry Dmitry Shchiglik. He declined to comment. Ms. Malysheva did not answer Kommersant’s questions. It was not possible to contact Alexandra Lomovtseva.
The brand is still retained by the company, and the patent for the composition of the weight loss kits and their packaging expired in March 2023, according to SPARK data.
The sets themselves are produced at the site of TPK Vilon, according to the company’s website.
Established in 2012, Diet of Elena Malysheva is one of the first businesses founded by the TV presenter and Dmitry Shchiglik. The partners also have shares in the medical center and the Health Info portal. By 2018, according to SPARK, the revenue of the meal kit delivery operator reached 460 million rubles, but then it began to decline and in 2022 it dropped to 117 million rubles. with a loss of 7.7 million rubles.
Mikhail Burmistrov, General Director of Infoline-Analytics, estimates the value of the company’s business at 10-15 million rubles. This assessment takes into account only the client base, since Diet Elena Malysheva does not have its own production, but there is a risk of losing the existing brand, he clarifies. Without a promoted brand, an exclusively client base is not the most interesting asset, adds Olga Zinovieva, founder of Elementaree. But the personalized name of the product is more of a limitation than an advantage, Sergey Ashin, the founder of Chefmarket, does not agree. “Customers usually stay with the company if the service and price suits them,” he says.
Three years ago, Elena Malysheva’s Diet could earn money by outsourcing rations. But now small companies cannot compete with two major players – Performance Group and Grow Food, which have their own high-tech production facilities, says Mr. Burmistrov. The presence of major players in this segment is increasing. According to Infoline, in the first quarter of 2023, the share of Performance Group increased by 9 percentage points (p.p.), to 41.1% year-on-year, Grow Food – by 6.8 p.p., to 27.6% . The share of companies not included in the top 5 major operators of ready-to-eat rations, on the contrary, decreased by 17.1 p.p. to 16.2% over the year.
At the end of 2022, this segment, growing in previous periods, for the first time sank by 4%, to 15.7 billion rubles. However, in 2023, according to Infoline forecasts, it can grow by 5-15%, up to 16.5 billion rubles.
Until the spring of 2020, the market for the delivery of cooking kits and ready-made rations grew against the backdrop of consumer optimism and a stable macroeconomic situation, says Olga Zinovieva. According to her, the pandemic supported demand, but then small players began to experience a lack of funds for their own promotion. The high cost also played a role, including due to increased logistics costs, with small volumes of production of food sets, adds Ms. Zinovieva.
Another reason for the reduction in the share of small players, the founder and president of the Performance Group (Performance Food, Level Kitchen, My Food), Arthur Zeleny, calls the departure of some consumers in the fall of 2022 after the announcement of partial mobilization and a change in attraction channels. “There is more offline, which is more expensive than online,” he explains.
Mr. Zeleny believes that by the end of 2023 the number of ready-made food producers will “seriously decrease”: the cost of dishes is rising, and increased competition does not allow raising prices. At the same time, according to him, the losses can no longer be compensated by the scale due to the growth of the market.
