The Ultimate Guide to Understand the Meal Kit Delivery Market

Meal kit delivery services are reinventing the dinner ritual a very good way and, it turns out, pretty healthy.

Meal Kits = Companies that deliver pre-portioned ingredients to users’ doors for cooking meals at home.

Meal Kits in Figures !

  • According to market research publisher Packaged Facts, meal kit delivery services generated close to $1.5 billion in sales in 2016.
  • In the next five years, this industry is projected to grow to a multi-billion dollar market.
  • On average dinner meals from these services cost between $8 and $12 per person, per meal.
  • More than 170 meal kit businesses are in operation globally which includes niche operators.
  • Meal kit food delivery services generated more than $1 billion in sales, in 2015. The United States market accounts for 40% of this.
  • Meal kit delivery service startups have raised over $650 million in venture capital.

Interest in and reasons for buying meal kits!

Interest in Fresh Prepared Solutions

Reason for Meal Kit

Meal Kit and Customers !

Men are 40% more likely to purchase kits than their female counterparts across all generations, while Millennials and Generation X consumers are 321% more likely to purchase meal kits than older generations.

Customers who use these services spent 2.8% less at supermarkets.

These customers also spent 2.2% less on eating out at restaurants in the first half of 2016, compared with the 2015 period.

In the U.S. one in four adults has purchased a meal kit, for delivery or in-store, in the last year, and 70% continue to buy them after making their first purchase.

Do the real winner of the meal kit market will be a meal kit company ?

No one in the food business, supermarkets and restaurants alike, debate the impact that meal kits from the likes of Blue Apron, Hello Fresh, Chef’d and Plated which discovered and satisfied the huge opportunity that until recently went unnoticed and the wake-up call for the food industry.

Unilever and meal kits

Unilever is making a play in the meal kit market. Unilever Ventures, the company’s venture capital and private equity arm, along with Baseline Ventures and Founders Circle Capital, led a $9.2 million Series C-2 funding round for Sun Basket, an organic meal kit delivery service.

Amazon and meal kits

Amazon gets serious about meal kits. Amazon is currently selling Tyson Foods’ Tastemakers meal kits and offering Amazon Fresh customers Martha Stewart meal kits prepared by Marley Spoon, as well as testing its own ‘chef-designed Amazon meal kits’ at its Amazon Go store pilot in Seattle.

Whole Foods Market and meal Kits

Today, the leading organic grocer in the USA is launching its first meal kit program, partnering with plant-based meal-kit delivery service Purple Carrot in a pilot program at its Dedham, MA flagship store. Purple Carrot will offer a rotating menu of three boxed meal kits, including selections like Mongolian Seitan Stir Fry, Pan Seared Tofu and Black Rice Noodles, and Cashew Korma with Cauliflower Rice.

Kit Challenges !

While the benefits of meal kits abound, glitches still remain, primarily with price and waste.

To operate a delivery-based service in general, packaging waste is pretty tough to avoid. Customers are accustomed to disposable trays, bowls, cutlery, bags and napkins galore from food delivery. But for these kits, waste multiplies with each order. We’re talking not only cardboard boxes and recipe print-outs, but excesses of disposable materials for individual and pre-measured ingredients like a tablespoon vinegar and a snip of fresh herbs. Some disposable serveware may have gotten a little more biodegradable, but it is no less waste created for a convenience that comes at the expense of more packaging waste and, well, more money.

According to a study by nonprofit BSR on behalf of Blue Apron, 62% less food is wasted at Blue Apron’s food prep facility and by consumers than the same meals cooked with grocery store ingredients, reported Fast Company