Trend Watch:  Meal Kit Delivery Services

Trend Watch: Meal Kit Delivery Services

February 24, 2016

By RDBA Executive Director Annette Maggi, MS, RDN, LD, FAND

Restaurants and retailers have been in a long-standing battle over the dollars consumers spend on food. The lines have blurred with restaurants beyond pizza now offering home delivery and grocery retailers expanding their grab-and-go and ready-to-heat or eat offerings. Meal kit delivery services have entered the scene and have the potential to split even further where consumers send their food dollars.  

Meal kit delivery services (think Blue Apron, Plated, Crockpot Cuisine) offer huge convenience. Pre-portioned ingredients down to tiny bags of spices and step-by-step instructions with pictures are delivered directly to the home. These services allow consumers to cook like a celebrity chef but without needing all the skill. Subscriptions are available for two, four or six people, accommodating small households and families. Shoppers can also choose the number of meals they want delivered each week, can skip weeks if they don’t like the menus offered, and can “gift” meals to friends and families. Many of these services focus on “fresh” and other consumer hot buttons like humanely raised animals.

It’s likely the biggest barrier to using these systems is the cost. Prices per meal per serving range from $7-12. While it’s likely that the consumer could purchase and prepare most of the meals at a lower cost, the real comparisons is to restaurants. To this end, meal kit delivery services offer a value to enjoy chef created menu items in the comfort of home.  

Retailers who want to maintain their share of the consumer food dollar would be wise to get into this business. Many retailers have dietitians, chefs, and extensive food preparation areas, making it an easy extension of existing roles and responsibilities to add a meal kit service. They also have a continuous supply of fresh and varied foods. Grocery retailers could offer a meal pick up between 4:00-6:00 each evening, with shoppers ordering and paying in advance on line, and driving through on their way home from work to pick up the meal. Dietitians can get involved to offer meals that meet specific nutritional needs such as Paleo, heart healthy, or diabetic meal plans. This would be a definitely competitive advantage over the current meal kit delivery services, as their primary health offering today is vegetarian.

One retailer who has moved in the meal prep direction is Hy-Vee. Dietitians for the company have created a program in 35 of their stores called Dinner is Served at Hy-Vee (DISH) where shoppers can prepare meals, take them home and freeze them or cook them. All the food ingredients and supplies are shopped for, washed and arranged at meal-building stations. Reviews of the program suggest a price of about $10 for a meal for four, much lower than the meal kit delivery services.

Industry data suggests that Blue Apron is delivering more than five million meals a month and has secured $193 million of capital investment. Is this a business retailers can afford not to participate in?