Meet 125 Mgmt Teams
Long Story Short: The Rise of Meal Kit Delivery Services
Too Busy to Shop?
Modern life is busy. We are constantly running around and do not always have time to go grocery shopping, often resulting in paying for take-out. In 1985, seventy-one percent of meals eaten at home were home-cooked. Today, that number is down to sixty percent and falling. Over a decade ago Middagsfrid created a meal kit delivery company in Sweden. The concept did not make its way over to the U.S. until around 2015 after Goldman Sachs reported they expected the industry to grow between $3 - $5 billion by 2020. Their estimate has still held and is still on track to reach that value. In the last half of 2018, 14.3 million households purchased meal kits, which was up 3.8 million from 2017.
Healthier Alternative. Most of the time, when we are short on time, our first thought is to run and get take-out. It has become the norm in modern life, and it is a very unhealthy lifestyle. The concept of meal kits can be a bridge to a better diet without having to make any changes to your daily life. By eliminating the thought of ‘what’s for dinner’, there is less of a chance that answer will be fast food. Eating at home normally translates to ingesting more nutrients and an overall better diet.
Snatched Up. In the past decade, many companies have joined, in an attempt to get in early and capitalize on the new idea. Not all of these entities have survived. Several of them have been bought out by large grocers like Kroger. The smaller firms have created enough value for these grocers to notice, and instead of building their own infrastructure, they decide to find someone to buy out. This type of transaction is normally always beneficial to both sides. The big firm can fight for market share while the smaller firm can now use the profits in any way they choose.
Lots of Competition. With the creation of any new market comes opportunity. Since the industry began, there have been many different firms attempting to get in. This allows room for different types of investors to determine which entity they believe in the most. For consumers, the hope is that the increase in competition will tighten the margins and lower the overall cost. One of the main concerns with customers currently is limited options. The addition of competition could bring in new meal ideas.
Pricey. The biggest issue consumers have with the kits is the cost. The average price per meal right now is about $10-$12, which is about $2 more than the ingredients cost on their own from the grocery store, and you are only receiving a small portion. These meals may be cheaper than ordering at a restaurant, but not comparable to regular grocery store shopping. There are also left-over ingredients when shopping at the grocery store that could be used for additional meals.
Not Sustainable. In the beginning, the concept is great, and people love it, but the idea does not retain customers. After a few weeks, the options get old and customers start to lose interest. Many companies offer special low prices to new customers, and a lot of users bounce around from company to company until the discounts run out. The service is too limited to keep clients coming back, which is crucial to company growth.
Excessive Packaging. A lot of clients do not like the excessive packaging that comes along with the meal kits. To keep the food fresh, each element is vacuum-sealed in plastic before being placed in more. Additional ice packs and insulating material is needed to prevent temperature fluctuations that could cause the food to spoil. All of this additional packaging is not only expensive for the companies to keep up with but also harms the environment.
Meal kits are a great idea for the everyday busy American. It will help families eat healthier and spend more time with each other, but the future of these companies is unsteady. The concept has gained a lot of popularity but is slowly losing everyone’s attention. The cost is a big setback for many families and once the discounts are over, many of them might not stay. The packaging does a great job of keeping the food fresh, but it is expensive and not environmentally friendly.
https://www.moneyunder30.com/meal-delivery-comparison, David Weliver August 6, 2019
https://www.investors.com/news/meal-kits-meal-delivery-service-review/, Russ Britt June 25, 2018
https://www.huffpost.com/entry/food-delivery-service-pros cons_n_5b992d94e4b0cf7b00459d2c , Fiona Tapp September 17, 2018