Meal Kits Delivery Services in the U.S., 2nd Edition

 
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Published Jul 7, 2017 | 128 Pages | Pub ID: LA15313324

Meal Kits Delivery Services in the U.S., 2nd Edition

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Meal kit delivery services have taken off over the past few years, serving millions of meals to tens of thousands of customers. But now the category appears to have reached a moment of reckoning. Blue Apron, the best known of the category’s competitors announced an initial public offering in early June that generated a lot of press but was received with only tepid interest from investors. Has the category hype been overblown? Is it destined to implode? Or is there a path to success that may not run through Wall Street?

Packaged Facts’ new report, Meal Kit Delivery Services in the U.S., 2nd Edition, takes a look at these questions and offers an up-to-date analysis of where meal kit delivery systems fit within the food industry and where the opportunities may lie for future growth. For those not familiar with the concept, the services offer people a convenient way to cook at home without having to do the meal planning and grocery shopping. Online portals let consumers order meals ahead from picture menus showing beautiful photos of the finished dish, and the services deliver the pre-measured fresh ingredients along with recipes to their doorstep to help them cook chef-like meals at home.

Meal Kit Delivery Services and the Food Industry

The U.S. grocery industry greatly overshadows the meal kit delivery service market segment in terms of revenue. Nevertheless, meal kit delivery is a disruptive force in the food industry. The meal kit delivery services segment is one of the industry's strongest examples of the movement toward providing greater convenience in eating fresh foods to the consumer. Meal kit delivery services also fall within the context of electric ordering of groceries for pick up or delivery from brick and mortar grocery retail. 

Meal kit delivery addresses the ever-growing demand for convenience. Retail grocers and foodservice operators alike bear more of the burden of getting food to the consumer and to the table. Working and pareting consumers pressed for time are those typically associated with the trend toward convenience in the food industry. Younger consumers who have not necessarily been schooled in how to prepare meals have also been a demographic accepting of meal delivery services. 

Blue Apron, perhaps the best known meal kit delivery services company, announced its initial public offering at the beginning of June with the goal of raising up to $586.5 million to cover operating expenses and capital expenditures related to the company's expansion plans, including a broader marketing outreach. By the end of June it was clear that Blue Apron would not meet its objective.

Other participants in the meal kit delivery services industry may pause their own IPO considerations due to the underwhelming response to the Blue Apron IPO. Food industry companies not in the meal kit delivery category, or only in a test stage with meal kit delivery services, may also now consider how best to participate in the meal delivery industry. 

Retail grocers, foodservice operators, convenience stores, and other types of food marketers are taking steps to offer their own meal delivery services and products that provide convenience. 

Some food manufacturers are entering the meal kit delivery industry on their own, not content to merely offer meal kit ingredients or be investors in meal delivery services. Tyson Foods is the most prominent to date, having launched its Tyson TasteMakers line of "chef-inpspired", ready-to-cook meal kits in 2016. 

Scope & Methodology

Packaged Facts' newest edition of Meal Kit Delivery Services in the U.S. covers online meal kit delivery services, as well as the companies that offer and deliver to consumers' doors fresh ingredients for one or more meals. Meal delivery services promise convenience by eliminating the need to plan meals, find recipes, and shop for groceries.
The report looks at the latest developments in the category beyond the Blue Apron IPO, including recent investments in some of the other category leaders by top international food companies. It also examines the potential impact on the meal kit delivery services category by the pending Amazon acquisition of Whole Foods Market and also by the rapid expansion of the grocery delivery service Instacart. In addition, the report identifies some of the most promising up-and-coming meal kit companies and what they are doing to distinguish themselves in among the many new contenders.

Packaged Facts examines meal kit delivery services in the context of both the retail grocery industry and the foodservice industry. Although accounting for less than one percent of overall grocery sales in the U.S., meal kit delivery service have garnered lots of attention, perhaps because they are the most colorful example of the movement toward providing greater convenience to the consumer. This movement includes electronic ordering of groceries for pick up or delivery from brick and mortar groceries, supermarkets, and convenience stores as well as online sales of grocery items from e-retailers.

Meal Kits Delivery Services in the U.S., 2nd Edition examines: 

  • The competitive environment among leading meal kit delivery services
  • Several new, up-and-coming entries in the meal delivery services industry
  • Past meal kit delivery services that were unsuccessful
Packaged Facts examines the competitive environment in which meal kit delivery services must strive for consumer attention. This includes a review of the various other methods by which by which consumers can obtain at home meals from both the retail grocery and foodservice channels, as meal kit delivery services are one element within an increasingly complex "omnichannel" food delivery universe. Emphasis is put meal kit delivery's impact on other food delivery channels. 

The heart of the matter is how food gets to consumers. What has emerged in the last few years is the growing demand for more convenience which translates to both the retail grocer and the foodservice operator bearing more of the burden of getting food to the consumer. Most often this trend is attributed to consumers being pressed for time because of work and/or parenting demands. It has also been suggested that younger consumers have not been schooled by their parents in how to prepare meals, which has been an important element in the acceptance of meal kits delivery services.

Meal Kit Delivery Services in the U.S., 2nd Edition uses consumer data gathered through Packaged Facts’ Online Consumer Survey of some 2,000 adult consumers conducted in May and June 2017. Information on company animal welfare activities was gathered from an in-depth search of corporate websites and food industry trade publications, with data on the activities of government and non-governmental organizations obtained from a thorough review of their publicly available sources.
CHAPTER 1: EXECUTIVE SUMMARY
OVERVIEW
Scope of Report
Report Methodology
Meal Kit Delivery Services Category Likely to Grow
Meal Kit Delivery Services and the Food Industry
Food Industry Reactions to Meal Kit Delivery Services
Consumers: Convenience and Cooking
MARKET PARTICIPATION OPPORTUNITIES
Opportunity 1: An Opening for Fresh Food Suppliers
Opportunity 2: Working the Learning to Cook Curve
Opportunity 3: To Niche or Not to Niche
Opportunity 4: Working the Clock and the Calendar
Opportunity 5: Celebrity Tie-Ins
Opportunity 6: Tie-Ins with Associations
Opportunity 7: Tie-Ins with Hospitality Industry
Opportunity 8: Establishing External Rewards Programs
Opportunity 9: Getting Ahead of the Curve (or Back to the Future) on Eco-Friendly Packaging
Opportunity 10: Meal Kit Providers and Packaged Food Companies as Frenemies
CHAPTER 2: MARKET OVERVIEW
KEY POINTS
DISRUPTING THE FOOD INDUSTRY
A Niche but Critical Challenge to the Grocery Industry
The Online Grocery Revolution
Challenging Foodservice as Well as Groceries
THE HEART OF THE MATTER: HOW FOOD GETS TO THE CONSUMER
MEAL KITS ONE OPTION AMONG MANY
Everything Old Is New Again
TWO WAY CHALLENGE TO MEAL KITS
Meal Kit Delivery Services at the High End
WHY MEAL KITS?
Meal Kit Delivery Services and the Triple Haters
Table 2-1 Consumer Food Delivery Likes and Dislikes
How Meal Kit Delivery Services Work
Subscription Plans Most Common
Illustration 2-1 Blue Apron Plans
No Subscription Option
Illustration 2-2 Chef’d’s No Subscription Approach
Competing on Price
The Attractions of Meal Kit Delivery Services
The Downside of Meal Kit Delivery Services
THE MARKET
A $5 Billion Market?
Market Projection
Table 2-2 Blue Apron Revenue Growth
The Amazon Factor
Can Success Lead to Obsolescence?
Future Directions for Meal Kit Delivery Services
WHAT DIDN’T WORK
Illustration 2-3 Kitchensurfing Shuts Down
Illustration 2-4 Pantry Before It Closed
BLUE APRON, AMAZON, AND INSTACART
BLUE APRON’S IPO
Significance for Category as a Whole
Should Blue Apron Be Acquired?
Blue Apron Acquires BN Ranch
Impact of Blue Apron IPO on Amazon/Whole Foods
Impact of Blue Apron IPO on Instacart
AMAZON AND WHOLE FOODS
Illustration 2-5 Martha & Marley Spoon on AmazonFresh
Whole Foods Tests Purple Carrot, Salted, and Its Own Branded Meal Kits
Illustration 2-6 Whole Foods Meal Kit Test
Illustration 2-7 Salted Meal Kits at Whole Foods
Impact on Grocery Industry
Impact of Amazon/Whole Foods Deal on Blue Apron
Impact of Amazon-Whole Foods Deal on Instacart
INSTACART’S EXPANDING PRESENCE
Table 2-3 Instacart’s Partner’s and Distribution Range
Illustration 2-8 Instacart: How It Works
Impact of Instacart Expansion on Amazon/Whole Foods
Impact of Instacart Expansion on Blue Apron
INVESTMENT SUPPORT FOR MEAL KIT COMPETITORS
SOCIAL MEDIA A KEY MARKETING PLATFORM
Illustration 2-9 Home Chef Facebook Promotional Video
CURRENT DEVELOPMENTS AMONG MEAL KIT DELIVERY SERVICES
Blue Apron
Illustration 2-10 Blue Apron on Facebook
Chef’d
Illustration 2-11 Chef’d Partners with The New York Times Cooking
Green Chef
Illustration 2-12 Green Chef Menu Options
HelloFresh
Illustration 2-13 HelloFresh Launches Wine Delivery Service
Home Chef
Illustration 2-14 Home Chef Ad Emphasizes Savings
Illustration 2-15 Home Chef Celebrates Holidays
Martha & Marley Spoon
Illustration 2-16 From Marley Spoon to Martha &Marley Spoon
Illustration 2-17 Marley Spoon Website in The Netherlands
PeachDish
Illustration 2-18 PeachDish Ties with Homewood Suites
Plated
Illustration 2-19 Plated Has Served Millions of Dinners
Purple Carrot
Illustration 2-20 Purple Carrot Teams with Football Star Tom Brady
Illustration 2-21 Purple Carrot Entices Flexitarians and Carnivores
Sun Basket
Illustration 2-22 Sun Basket Facebook Post Has Multiple Messages
Terra’s Kitchen LLC
Illustration 2-23 Terra’s Kitchen Delivery Vessel
UP AND COMING MEAL KIT DELIVERY SERVICES
BurgaBox
Illustration 2-24 BurgaBox for Your “Cheat Day”
Farmhouse Delivery Supper Club
Illustration 2-25 Farmhouse Delivery Supper Club Logo
Feastive
Illustration 2-26 Feastive Facebook Images
Foodstirs
Illustration 2-27 Foodstir Fan Endorsement
Gobble
Illustration 2-28 Gobble’s One Pan, 10 Minute Proposition
Good Eggs
Illustration 2-29 Good Eggs Delivers Groceries and Meal Kits
Handpick
Illustration 2-30 Handpick’s Three Meals from One Kit
Kitchen Table
Illustration 2-31 Kitchen Table Plant-Based and Flash Frozen Ingredients
One Potato
Illustration 2-32 One Potato’s Argument
Thai Direct
Illustration 2-33 Thai Direct Chicken Green Curry
CHAPTER 3: MEAL KITS IMPACT ON FOOD INDUSTRY
KEY POINTS
THE FOOD INDUSTRY RESPONDS
MEAL KITS FROM RETAIL AND ONLINE GROCERIES
Kroger Enters Meal Kit Competition
Illustration 3-1 Kroger Prep +Pared In-Store Display
Publix Offering Meal Kits
Illustration 3-2 Publix Aprons Meal Kits Display
Giant Eagle Includes Meal Kits Among Many Options
Illustration 3-3 Market District Fresh in :30 Minutes Pork Piccata Meal Kit Ingredients and Cooking Instructions
Table 3-1 Giant Eagle/Market District Meal Solutions
Hy-Vee Offers Chef in a Box
Illustration 3-4 Hy-Vee Introduces Fresh Meal Kits
Coborn’s Expands Meal Kit Program
Illustration 3-5 CobornDeliver’s To the Table Meal Kits
Gelson’s Offers Salted Interactive Meal Kits
Illustration 3-6 Salted’s Meal Kits Chefs
Peapod’s Expanding Meal Kit Offerings
MEAL KITS AND GROCERY MANUFACTURERS
Illustration 3-7 Tyson Food’s TasteMakers Spicy Korean-Style Steak Tacos Meal Kit
Illustration 3-8 Omaha Steak’s Asian BBQ Crock-Pot Meal
Did Meal Kit Convenience Spur Click and Collect?
Illustration 3-9 Meijer Supermarkets’ Curbside Pick-up
MEAL KITS PUSH CONVENIENCE IN CONVENIENCE STORES
Illustration 3-10 Kroger’s New Fresh Eats MKT
MEAL KITS AND FOODSERVICE
Illustration 3-11 Denny’s Introduced Denny’s On Demand
Illustration 3-12 McDonald’s McDelivery App
MEAL KITS AND “READY-TO-EAT” HOME DELIVERY
Illustration 3-12 Schwan’s Emulates Meal Kit Facebook Ads
Illustration 3-13 Top Chef Meals “How It Works”
MEAL KITS IMPACT OTHER CONSUMER CATEGORIES
Illustration 3-14 Bombfell: Clothing Version of Meal Kit Delivery Service
CHAPTER 4: THE CONSUMER
KEY POINTS
FOOD AND MEAL DELIVERY
Half of Adults Have Ready-to-Eat Food Delivered, Mostly from Chain Restaurants
Figure 4-1 Home Delivery of Pizza Within Last 30 Days, 2017
(percent of U.S. adults)
Figure 4-2 Home Delivery of Ready-to-Eat Food/Meals Other than Pizza Within Last 30 Days, by Type of Restaurant, Store, or Service, 2017 (percent of U.S. adults)
Figure 4-3 Home Delivery of Groceries, Fresh Meal Kits, or Specialty Meals Within Last 30 Days, 2017 (percent of U.S. adults)
Amazon Plays a Significant Role in Food and Grocery Delivery
Figure 4-4 Online Ordering of Products/Services Other than Restaurant Delivery in Last Three Months, 2017 (percent of U.S. adults)
Figure 4-5 Ordering from Amazon in Last Three Months, 2017 (percent of U.S. adults who have ordered any products/services online other than restaurant delivery in last three months)
Figure 4-6 Usage Rates for Amazon Products and Services, 2017 (percent of U.S. adults who have ordered from Amazon in last three months)
Figure 4-7 Usage Rates for Amazon Prime Services, 2017 (percent of U.S. adults who use Amazon Prime) . 99
Figure 4-8 Tools Used with AmazonFresh, 2017 (percent of U.S adults who use AmazonFresh)
Figure 4-9 Usage Rates for Amazon Subscribe and Save, by Product Category, 2017 (percent of U.S. adults who use Subscribe and Save)
Table 4-1 Usage Rates for Amazon Grocery Delivery Services, 2017 (percent of U.S. adults
MEALS AT HOME
Everyone Cooks; Meal Kit Subscribers Cook More
Figure 4-10 Cooking at Home, 2017 (percent of U.S. adults vs. current meal kit service subscribers)
Figure 4-11 Preparing/Cooking Full Meals at Home, by Frequency, 2017 (percent of U.S. adults who cook: all shoppers vs. current meal kit service subscribers)
Meals Are Most Often Prepared from Scratch
Table 4-2 How Meals at Home Are Prepared or Procured, by Frequency, 2017 (percent of U.S. adults)
AWARENESS AND USE OF MEAL KITS
One-Third of Adults Have Purchased Fresh Meal Kits
Figure 4-12 Purchasing of Fresh Food Meal Kits for Cooking at Home Within Last 30 Days, by Type of Provider, 2017 (percent of U.S. adults)
High Awareness of Meal Kit Delivery Services Is Due to Advertising
Figure 4-13 Awareness of Delivery Services for Fresh Food Meal Kits to Cook at Home, 2017 (percent of U.S. adults)
Figure 4-14 Sources of Information About Delivery Services for Fresh Meal Kits, 2017 (percent of U.S. adults who have heard of fresh meal kit delivery services)
Figure 4-15 Have Had a Meal Made from Delivered Fresh Meal Kits, 2017 (percent of U.S. adults who have heard of fresh meal kit delivery services)
Figure 4-16 Have Signed Up for a Trial of/Subscription to a Fresh Meal Kit Delivery Service, 2017 (percent of U.S. adults who have heard of fresh meal kit delivery services)
Time, Effort, and Expense the Top Reasons for Quitting Meal Kit Delivery Service
Figure 4-17 Reasons for Stopping Usage of a Fresh Meal Kit Delivery Service, 2017
(percent of U.S. adults who tried, then decided not to use, a fresh meal kit delivery service)
Figure 4-18 Currently Subscribing to a Meal Kit Delivery Service, 2017 (percent of U.S. adults who have ever signed up for a trial or subscribed to a meal kit delivery service)
Figure 4-19 Using the Fresh Meal Kit Delivery Service Originally Subscribed To, 2017 (percent of current meal kit service subscribers)
Figure 4-20 Delivery Range of Current Meal Kit Delivery Service, 2017 (percent of current meal kit service subscribers)
Figure 4-21 Fresh Meal Kit Delivery Service Usage, by Company, 2017 (percent of current meal kit service subscribers)
Time Saving, Quality and Variety of Options, and Enjoyment Are Most Important Features of Meal Kit Delivery Services
Figure 4-22 Most Important Features of a Meal Kit Delivery Service, 2017 (percent of current meal kit service subscribers)
Nine out of 10 Subscribers Would Recommend Meal Kit Delivery Services
Table 4-3 Level of Agreement with Statement: “I Would Recommend Meal Kit Delivery Service to my Friends,” 2017 (percent of current meal kit service subscribers)
THE FRESH MEAL KIT DELIVERY SERVICE SUBSCRIBER
Demographic Profile of the Meal Kit Services Subscriber Trends Markedly Upscale
Table 4-4 Demographic Characteristics of Fresh Meal Kit Delivery Service Subscribers, 2017 (index)
Meal Kit Subscribers Are Heavy Users of Online Shopping Services
Table 4-5 Online Ordering and Purchasing Activity: All Adults vs. Current Meal Kit Delivery Service Subscribers, 2017 (percent and index)
Table 4-6 Demographic Characteristics of AmazonFresh Users, 2017 (index)
Meal Kit Subscribers Are More Diet Conscious
Table 4-7 Level of Agreement with Statement: “I Follow a Special Diet for Health and Wellness,” 2017 (percent of U.S. adults vs. current meal kit service subscribers)
Figure 4-23 Agreement with Statements About Healthy Food Choices, 2017 (percent of U.S. adults vs. current meal kit service subscribers)
Meal Kit Subscribers Favor Natural Food and Specialty Stores for Grocery Shopping
Figure 4-27 Retail Channels Shopped for Groceries and Fresh Foods in the Last 12 Months, 2017 (percent of U.S. adults vs. current meal kit service subscribers)
Quality, Organics, and To-Go Options Are Desirable in a Grocery Store
Figure 4-28 Important Features When Choosing Where to Buy Groceries, 2017 (percent of U.S. adults vs. current meal kit service subscribers)
In Product Selection, Meal Kit Subscribers Favor Local, Natural, Animal-Friendly
Table 4-8 Level of Agreement with Statement: “I Buy Fresh, Natural Ingredients for Cooking,” 2017 (percent of U.S. adults vs. current meal kit service subscribers)
Table 4-9 Level of Agreement with Statement: “I Prefer Using Local Cooking Ingredients,” 2017 (percent of U.S. adults vs. current meal kit service subscribers)
Table 4-10 Level of Agreement with Statement: “I Look for Specific Nutritional Ingredients in the Foods I Eat,” 2017 (percent of U.S. adults vs. current meal kit service subscribers)
Table 4-11 Level of Agreement with Statement: “I Prefer to Buy Packaged Food or Beverage Groceries from Regional/Local Companies Rather than from Large Food Companies,” 2017 (percent of U.S. adults vs. current meal kit service subscribers)
Table 4-12 Level of Agreement with Statement: “I Prefer to Buy Packaged Food or Beverage Groceries from Specialty/Natural Companies Rather than from Large Food Companies,” 2017 (percent of U.S. adults vs. current meal kit service subscribers)
Figure 4-29 Animal Welfare-Related Food Shopping Choices, 2017 (percent of U.S. adults vs. current meal kit service subscribers)

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