Category Archives: Meal Kits

Meal Kits-Sellers Having Trouble Retaining Customers

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Meal Kits, where all of a meal’s ingredients are prepacked along with preparation instructions, a topic we first talked about here, got some recent attention from Fast Company (paywall), which reported on a new study from research firm 1010data, which “analyzed consumer-spending data that represents millions of consumers, revealing a significant retention problem for the major meal-kit delivery services – which ship recipes with pre-portioned ingredients to customers on a weekly basis. After the second week, only about 50% of customers stick with Blue Apron, 1010data found. Six months into their subscriptions, only about 10% remain. The firm found a similar pattern for HelloFresh and Plated.”
All the meal kit companies say that the study data is inaccurate and does not reflect their experience.
Fast Company writes that “if a large number of people drop their subscriptions, it is a problem for meal-kit companies because they often spend a lot of money to encourage customers to sign up. Blue Apron, for instance, offers a $30 discount to first-time customers, the equivalent of about three meals. HelloFresh offers a $15 discount to new customers. Plated offers two free meals with the first order. If customers don’t stick with their subscriptions for long, these companies don’t recoup that marketing spend.”
However, the story says, “Despite the retention problem, 1010data found that the meal-kit industry has grown over 500% since 2014. A food-consulting firm estimated that category will account for $3 billion to $5 billion of the online food shopping business in 10 years.”

Growth is almost assured for this market segment, if for no other reason than the Millennial coterie is continuing to advance into independent-living adulthood (except for those who continue, for assorted reasons, to live with their parents), and the next generational group, dubbed Generation Z, is following closely on their heels.

And these are age groups comprising many (many!) who are used to having things done for them, and/or having life simplified for them via ‘apps’ and variations on that theme. And meal kits definitely are a variation on that theme.

Ah, but, as Shakespeare put it, “here’s the rub”: Meal kits actually require users to do something – to actually prepare the meal themselves, albeit from pre-portioned packets of product.

I can hear them from here: “Boo, who wants to actually cook?”

Some who’ll say that no doubt also are disappointed when, upon visiting a zoo, it becomes apparent that one not only sees the animals but also smells them!

Time (and sales figures) will tell how the ‘who wants to actually cook’ crowd’s attitude will impact the future of meal kits.

I’m reminded of the country song where a man is lamenting how, in his divorce, “she got the gold mine, I got the shaft,” and says to himself “why didn’t I just learn how to cook!”

 

 

Meal Kits, Aimed at Busy Home Cooks, Slowly Gain A Following

 

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Meal kits, the food industry’s latest attempt to reinvent itself and in the process hopefully boost profits with a ‘value-added’ product, have, in a few short years, already been tried, sometimes repeatedly, by a slowly growing segment of the U.S. population — some three percent within the past  year, according the NPD Group, a market research firm.

A small step for meal kits, a giant leap for Millennials’ attention-getting ability.

They, to a large degree, are the target market for the several national and numerous local meal kit-offering  services – they and others who might be prepared to push the cost of a prepared-at-home meal from, say, $4 per person to $10 or more by having all of a meal’s ingredients pre-measured, pre-packed and delivered, with clear cooking instructions included.

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Peach Dish is one of several national meal kit providers.

Those using meal kits, NDP Group says, in a new report entitled Thinking Inside the Box: A Fresh Look at Meal Kit Delivery Services, “are generally satisfied, and two out of three kit users are extremely or very satisfied; But price may be a barrier for continued use and adoption by others.”

Their study says that saving time is the top reason used for using meal kits, and consumers also say that using them “makes dinner easier to prepare”; And many add, the kits provide variety beyond the usual repertoire of someone who’s been working all day, is tired, and wants to simply through together a familiar dish or two, using well-tried recipes.

But the freshness of meal kits’ ingredients appeal a lot to young adults, many of who truly have limited recipe repertoires and limited time and/or patience for venturing further afield, cuisine-wise. And they certainly don’t have either the time or interest to shop often for a specific meal, so their ingredients are bound to be less fresh than the kits’, which are selected, prepped, packed and delivered daily.

But the kits’ cost is a concern of many users, because while they are used to replace a home-created meal, their per-person is closer to that of a restaurant meal.

Oddly, price didn’t come up as an issue in a laudatory Forbes article on meal kits in March of this year.

“Every single meal turned out as expected and given the potential for user-error in my house, that is an impressive statistic,” said author Katie Kelly Bell, who said she “scouts the world for the best experiences in food, wine and travel.”

That reinforces the belief of Darren Seifer, NPD Group’s food and beverage industry analyst.

The cost issue aside, he said, “there are opportunities for continued growth – for meal kit providers to market around the reasons their customers are satisfied, for manufacturers to get in the kit box, and for foodservice operators to leverage their ability to provide on-demand delivery and meal variety.”