The meal kit industry was launched in Sweden by Kicki Theander and it was called Middagsfrid back in 2007. In 2012, Blue Apron, Hello Fresh and Plated debuted in the US. Home Chef began in 2013. By 2015, meal kit food delivery services hit 1 Billion dollars. There are now over 150 meal kit options for consumers to try.
By 2018, many were speculating on the future of the meal kit delivery industry. The space became much more crowded and the novelty wore off. Many felt as though having the service was great in that it reduced food waste. Packaging was not ideal as it produced too much paper and plastic. In a nutshell, it was doomed to fail and many speculated it would.
NPD group food analyst Darren Seifer says there are two main reasons customers abandon their meal kit subscriptions, and the first is that they’re too expensive once the initial coupon or sign-up promos run out. Second is that people want more spontaneity when deciding what they want for dinner.
The Market Grows
Grandview Research published a study, Meal Kit Delivery Services Market Size, Share & Trends Analysis Report By Offering (Heat & Eat, Cook & Eat), By Service (Single, Multiple), By Platform (Online, Offline), By Region, And Segment Forecasts, 2020 – 2027.
Multiple kit delivery services are expected to register the fastest CAGR of 13.0% from 2020 to 2027. With inflating lifestyle, it’s common to have families with working parents who face time crunch in cooking. According to the Bureau of Labor Statistics report published in April 2019, among married couples in 2018, 48.8% of families had both employed husbands as well as the wife. Similarly, among married couples with children, 63% of families had both employed husband and wife. This trend is expected to expand the scope of meal kit delivery services in families.
Once the pandemic hit in March of 2020, the meal kit companies exploded. When consumers were unable to get the food they wanted at their local grocery store, meal kits subscriptions became an option. They created a fun, DIY activity that the entire family could do together. Many people who didn’t even know how to cook, all of a sudden were tasked with this chore at the end of a long day full of Zoom meetings and virtual learning for the kids. It made sense.
Some of the companies were not able to keep up with the demand. I personally tried three subscriptions, Home Chef, Hello Fresh and Gobble. Out of the three, Home Chef was my favorite. I needed to give it up however, because of the issues in delivery. I started with Tuesday delivery and then week after week it wouldn’t come until Wednesday. That was not a huge issue, but when it did come, it came almost at room temperature. The ice packs were 3/4 of the way thawed. When I called, they assured me they would look into the issue with the delivery company and get back to me. They never did and I cancelled. Hello Fresh’s portion size was small and over priced in my opinion. Gobble was packaged the best. They also offered extras like cookies and even breakfast options. I didn’t care for the meal options however.
The Struggle is Real
The meal-kit delivery company saw customers drop off by 7.5% during the third quarter as it struggled to meet an earlier surge in demand. While it’s expanding fulfillment centers and paring menu options to simplify production lines, those changes won’t be completed until next year.
An employee’s viewpoint was shared on the post:
The past 6 months were the most stressful months of my entire life.
On March 19th, my work at Blue Apron completely changed overnight. Thousands of customers coast to coast flocked to Blue Apron in a time when their local grocery stores sold out of food, everyone was locked down, and Blue Apron was their only option. Given the overwhelming demand, that meant I worked a lot overtime on nights and weekends. I probably worked 6 weeks with no days off, no weekends, nothing. To be honest, it’s been the duty of a lifetime. I’m proud of my work, and I’m really lucky to be able to continue this work to today.
What do you think? Can meal kit subscription companies make it in the long run? Customer service will be key.