Make way for meal kits
“We’re here to help busy people like you to skip the grocery store and whip up delicious meals in 30 minutes. Every week you get knockout new recipes and all the fresh, pre-portioned ingredients delivered straight to your door.”
That’s a pitch from Home Chef, one of about 150 meal-kit delivery services that are making inroads with today’s consumers, particularly millennials.
A Nielsen survey reports that 25% of US shoppers purchased meal kits in 2016. According to industry estimates, sales for the year were between $1 billion and $1.5 billion, with 5-year projections pegging it as a multibillion-dollar market.
Meal kits are flexible, subscription-based services that let customers select from a range of menu options every week, delivering meals directly to their doorstep. All of the ingredients — meat, produce, oils, spices — are supplied in the exact amounts. “The fact that there’s limited food waste has been one of the selling points,” says Mary Shelman, president of Shelman Group. “It’s a convenience, but it lets the person feel like they’re doing something special, from scratch.”
The exact costs vary but tend to run just less than $10 per person for a two-person meal (slightly less for a family of four). Common verbiage found throughout meal-kit sites include: artisanal purveyors, family-run farms, sustainable suppliers, organic and premium meats with no added hormones. “You can rest assured knowing every ingredient was sourced with nothing but love,” HelloFresh promises.
Many meal-kit businesses began around 2011 to 2013. Today, the biggest one is Blue Apron, which delivers about 8 million meals a month, Shelman says. It works directly with about 200 farmers to source their products and displays approximately 135 pork recipes among its offerings.
“Meal kits are a trend that pork needs to explore further,” says Jarrod Sutton, vice president, domestic marketing for the National Pork Board (NPB). “Blue Apron currently offers a nice selection of pork products, but others like HelloFresh seem to be missing the opportunity with pork.”
He points out that NPB plans to proactively reach out to the various meal-kit providers with the intent of increasing pork’s presence in the offerings.
It’s worth pointing out that meal kits’ long-term viability is not guaranteed. Cost issues, competition, the need for differentiation, as well as whether meal kits are just a novelty are all yet to be determined.
Of course, Amazon’s purchase of Whole Foods Market could impact this already-competitive segment, too. Although Whole Foods had offered meal kits from third-party suppliers such as Tyson Foods, Amazon trademarked a new line of meal kits in July with the tag line: “We do the prep. You be the chef.”
Other grocers, such as Wal-Mart, are getting in on the act, offering meal-kit options without requiring a subscription. In 2018, Kroger will expand its Prep+Pared Meal Kits to about 200 stores nationwide. Grocery giant Albertson’s purchased the 5-year-old Plated in late 2017.
It’s worth noting that US grocery stores generated $80.6 million in meal-kit sales for the 12 months ending in March 2017, up 6.7% from the year before, according to Supermarket News. Analysts increasingly view grocery chains as being the best situated to experiment with meal kits, as they already have an established link to a variety of ingredient suppliers.
Posted on February 25, 2018
