Consumers are obsessed with food; they watch cooking shows and scour Pinterest and websites with visions of being the next contestant on Chopped. They’re hungry all the time but don’t have the time to shop and cook the meals they want at home. Add to this the fact that the unique, fresh sourced ingredients they have come to expect aren’t always available to them at the grocery store. Stockholm mom of three, Kicki Theander, felt firsthand the stress her hardworking friends were facing to put a homemade meal on the table and saw a box full of opportunity.
Theander started Middagsfrid (translated: dinner time bliss) in 2008, establishing itself as the pioneer in the meal kit segment. Four years later, the U.S. meal kit market kicked off simultaneously as Blue Apron and HelloFresh each adopted the business models established by Middagsfrid and competitor, Linas Matkasse. All recognized that the meal kit satisfies great consumer needs: not everybody likes to cook or shop, has the time to cook or shop or the motivation to do either. With a current value between $3-5 Billion and approximately 100 competitors vying to think outside the box (sorry, couldn’t resist), the meal kit market is expected to grow upwards of $8 billion by 2018 but could reach upwards of $60-100 billion depending on the source.1 Suffice it to say, a lot of meal-laden boxes will be gracing consumers’ front porches in the future.
Why consumers love and don’t love meal kits:
- Allows consumers to explore different regions of the world inspiring experimentation
- Helps improve consumers’ culinary skills and confidence
- Brings fresher ingredients with assumed higher quality to consumers
- Provides unique ingredients to consumers who may have difficulty sourcing locally
- Eliminates meal planning stress for working families
- Reduces food waste (i.e. buying a whole bundle of parsley when only need a sprig)
- Removes a large part of the cooking experience (i.e. research, choosing ingredients)
- Minimizes the importance and legacy of family recipes
- Costs can be higher than consumers allocate towards meals
- Excess packing and shipping materials like ice-packs and multiple boxes raise consumers’ sustainability concerns.
- Many plans don’t allow for choice – you eat what is offered for the week.
- Limited flexibility in some plans to work around last minute schedule changes.
- Serving sizes and macros predetermined
The Big Three
Blue Apron / HelloFresh / Plated – Setting the standards for meal kits in the U.S., each of these market leaders have the brand recognition thanks to major ad campaigns and each deliver nationally the freshest of ingredients showcased in flavorful, global-inspired recipes. HelloFresh has notoriety and extra cache in its partnership with celeb chef, Jamie Oliver. Blue Apron currently ships more than 8 million meals a month and is currently valued at $2 billion.2 Rumor has it that Blue Apron is considering an IPO, making it the first meal kit company to go public.3 Bon Appetit also boasts a family plan and a wine club that pairs selected wines with meal offerings. Plated is probably the least well known of the three but has a loyal fan base.
- Chef’d – NYT Cooking brings the iconic paper’s recipes from culinary celebrity chefs to meals at home. More expensive but offers an a la carte option if a customer wants to try it once with zero commitment. And consumers choose the recipes they want, not what the company wants to send. This flexibility may endear them to customers longer with less turnover.
- Cooking Simplified – A startup of two UC Berkeley students who recognized that every family wants to put a healthy meal on the table but can’t always afford to. This plan offers a pay what you can afford option in addition to requesting donations from those who can pay more and batch recipes for future meals.
- Green Chef – Currently the only USDA certified organic meal kit service.
- Just Add Cooking – Native to Boston and sources only local ingredients
- Martha Stewart / Marley Spoon – You know meal kits are serious business when domestic maven Martha Stewart gets in on the box action. And with Martha holding the consumers’ hands, dinner is going to be something special.
- PeachDish – Brings the taste of the south to the U.S. focusing on food grown in Georgia and a traditional meat, veggie and carb.
- Purple Carrot – Recently led by former NYT reporter Mark Bittman, Purple Carrot is the only all vegan service that delivers nationwide.
- Sun Basket – Paleo and gluten-free currently targeting Northern California.
- Terra’s Kitchen – Delivers completely pre-chopped ingredients in a reusable climate controlled “vessel” and promises dinner on the table in 30 minutes. The most environmentally conscious meal kit provider, the container is picked up the next day and reused.
- Tyson Tastemakers – Amazon is getting into the game partnering its AmazonFresh brand with Tyson. Tyson Tastemakers are expected to launch fall 2016 and focus initially on the ten markets that AmazonFresh currently serves including Seattle, New York, and San Francisco. Tyson Tastemakers will focus on health with protein as the star for their kits and help educate consumers on different cuts of meat, their uses and how to prepare them.
The Ideal Meal Kit Consumer
Who exactly is the meal kit consumer? Companies would say anyone who eats. We think it depends on a consumer’s cooking IQ, willingness and ability to dedicate time to the task of meal prep, not to mention willingness to relinquish a little control. While families could benefit most from meal kits, Millennials are the early adopters in the category and their willingness to spend $50.75 a week on food outside of grocery stores makes them an ideal target.4 Most meal kit companies initially focused on the “dual income/no kids couple” because they allocate money to their food budget. Blue Aprons aforementioned family plan is a start, but its $33/meal price could be a barrier for many families. Given that retail and restaurants account for $1.3 trillion in food sales, the meal kit market is certainly not boxed in.
In and Out of the Box: What’s Next for Grocery Affects Meal Kits
Box meal kits ease the transition for consumers to ordering groceries online. Hardly a new concept (think Peapod), the online grocery business is expected by some to reach $100 billion by 2018.5 Instacart is already proving the viability of this and FreshDirect, which serves the New York City and Philadelphia markets, recently secured funding that will allow it to expand to other markets. Grocery stores, like Giant Eagle, are getting into the delivery act with their brand, Market District.
Ready to grab a box seat? Check out some meal kit tips before you commit.
- The $5 Billion Dollar Battle for the American Dinner Plate. Fast Company.com, June 2015, Elizabeth Segran
- Ibid, Fastcompany.com