Fall from grace: $11.8 million meal-delivery business FivePointFour collapses
Monday, March 18, 2019/
Ready-to-eat meal-delivery business FivePointFour has collapsed into administration, with customers told their next orders will not be delivered.
The business lodged a notice of external administration with the corporate regulator last Friday and emailed customers, blaming increased competition and rising costs for its downfall.
Administrators from Farnsworth Shepard are now running the company but did not respond to comment requests on Monday morning.
“In the face of increasing competition and our cost to serve, we have made the really difficult decision to stop taking orders with immediate effect as of today,” the email, sent to customers last Wednesday, said.
“Any future orders for next week and beyond will unfortunately not be delivered.”
Founded in 2012 by then university student Beni Doolan, FivePointFour focused on healthy low-carb meals, marketing itself to athletes and gym-goers.
It claimed to have about 15,000 customers in 2016, booking $11.8 million in revenue after growing over 940% in the preceding three years.
But Australia’s bourgeoning meal-delivery industry has become much more competitive since then, with leaders such as Hello Fresh, YouFoodz and Marley Spoon aggressively chasing market share.
Last year, grocery-delivery business Aussie Farmers Direct succumbed to the pressure and was subsequently wound up.
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After a little too many social events and going out too often, I decided to do a bit of a detox and hammer out 3 weeks of ‘get back into shape’ gym with @goodlifeprahran and eat the Men’s Low Carb meals from @fivepointfour before a trip to Bali. I’m probably a little biased towards @fivepointfour as I’m involved with the company but I honestly could not be happier with the new meals and time the food has saved me. I’ve lost 2.8% body fat, am up 1.1% lean muscle mass yet still enjoyed a glass (bottle) of red here and there ????. I mean, for roughly $7 a meal, it makes sense to try it out for a week or even a month, see if it works for you too. Feel free to send me a message if you want to know more about the food/snacks or just general info on what you could be doing better. Anyway, thought I’d share & maybe motivate some of you in Winter to get in shape too! Happy hump day ???????????????? #Fitness #Fivepointfour #LeanUp #DadBod #BaliShred #MacroControlled #Results
Doolan did not respond to requests for comment on Monday morning but told SmartCompany back in 2016 he was dealing with over-subscription problems and was improving communication with customers, suppliers and freight managers.
He previously had plans to expand the business into China and Southeast Asia, but in 2017, stepped down as chief executive and instead took up a board advisory role.
Two new directors, Rajeev Dhawan and Garry Roy Sladden had joined the business months earlier.
The business told customers last week those with pre-paid orders will be issued refunds.
“For our customers with future pre-paid orders, the customer service team will be working diligently to process your refund and will be in touch with you over the coming days,” customers were told.
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