Sales of meal kits are growing and changing the retail food industry
Posted August 11, 2016
Meal kits, those packages of fresh ingredients and instructions delivered to a consumer's home ready to cook without any grocery shopping or meal planning, are still in their infancy, yet primed to disrupt the food industry.
The product is aimed at consumers who lack the time, disposition or knowledge to shop for and cook from scratch, FoodProcessing noted. Sometimes the ingredients are even prepped, such as being pre-cut, to further speed up time, according to packagedfacts.com.
Only about 3 percent of the adult populace in the U.S. subscribed to a meal kit service within the last year, according to the retail industry website NPD. Of those who have tried the service, two out of three said they were “extremely or very satisfied” with their meal kits, so there's potential for growth, NPD reported, with saving time cited as the top advantage and the experience and ingredients being particularly appealing to young adult customers.
But those advantages come at cost
NPD reported the average cost of a meal kit is more than double the average cost of preparing an in-home dinner, but is comparable to the average price of dinner at a restaurant. NPD also found that 66 percent of meal kit users said they would have made a meal at home if they hadn't used the meal kit, while 22 percent said they would have opted to buy a restaurant meal.
Hello Fresh and Blue Apron both have family plans. Hello Fresh’s meal kit plan of three meals for four people costs about $112 and Blue Apron’s family plan serves four people for $70 (two meals) to $140 (four meals).
So will it catch on? Well, the CEO of meal kit service Sun Basket, Adam Zbar, told foodnavigator-usa.com that providing convenience is more mainstream than just a fad food would be.
“What we’re seeing is that meal kits are fitting into people’s lifestyles,” he said. “This isn’t a novelty, it’s serving a fundamental need, and once you’ve started using them, it’s hard to go back.”
The numbers indicate Zbar and his competitors may be onto something. Sales of meal kits are expected to reach about $1.5 billion in 2016, growing into a multibillion-dollar industry in the next five years, packagedfacts.com noted. Delivery service Blue Apron is now worth $2 billion, with HelloFresh surpassing it with a worth of $2.9 billion, according to Business Insider.
Meal kits may disrupt other areas of the food industry as their business expands, warned packagedfacts.com. However, some retailers seem to be preparing for that.
Whole Foods recently announced that it would test offering meal kits, although it’s not known when its kits will be launched, Quartz noted.
And Amazon, while its products include more than groceries, jumped onboard the meal kit bandwagon in May, forging a partnership with Tyson Foods to roll out meal kits to Amazon customers in the fall, according to Business Insider. The meal kits will be called Tyson Taste Makers and will focus on providing fresh protein for its consumers.
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