Meal kit delivery on the doorstep of success

by Rebekah Schouten
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Meal kit delivery service
There are more than 150 meal kit delivery services in the United States.

ROCKVILLE, MD. — Meal kit delivery services are bridging the gap between home-cooked meals and takeout, an endeavor that is catapulting the category's success. There are more than 150 meal kit delivery services in the United States, according to a new report by Packaged Facts, and the company projects that the meal kit market will generate $1.5 billion in sales in 2016 and will grow to a multi-billion market over the next five years.

Convenience is a key driver in meal kit subscription growth, Packaged Facts said, as the services offer consumers a way to cook at home without meal planning or grocery shopping. The services may be accessed on-line, where consumers order meals from picture menus that display photos of the finished dish. The pre-measured ingredients and recipes then arrive on the consumer’s doorstep.

Freshness is another big selling point, Packaged Facts said. The delivery services guarantee fresh ingredients, and because everything is pre-measured, no food is wasted.

Blue Apron meal kit delivery service
Blue Apron, Inc. is the meal kit delivery service category leader, raking in $1 billion in annual sales.

Freshness is the focus of the category’s national leader, New York-based Blue Apron, Inc., which rakes in $1 billion in annual sales. On its web-site, Blue Apron promises “farm-fresh specialty ingredients that are fresher than the supermarket.” Blue Apron also sources its ingredients from family-run businesses, which it showcases on its web site along with its recipes that feature those business’s products.

Consumers also said they consider meal kits to be a healthier alternative to takeout or eating out, Packaged Facts said, and that the kits promote portion control and cater to special diets.

One such service is Purple Carrot, a Boston-based meal kit delivery service that offers plant-based, vegan meals. The company offers kits for meals such as soba bowls, gumbo, black bean burgers and pho.

Purple Carrot meal kit delivery service
Purple Carrot offers plant-based, vegan meals.

While meal kit delivery services seem to be a boon for consumers, they have the potential to disrupt the restaurant industry and the grocery industry, Packaged Facts said. The everything-in-a-box kits allow consumers to cook restaurant-quality meals at home without setting foot in the grocery store.

“These days, consumers have access to almost everything without leaving their home and — through the power of smartphones — without even speaking to another human being,” said David Sprinkle, research director for Packaged Facts. “Rather than worrying whether meal kit delivery services will cut into their business, some grocers and food marketers are taking the bull by the horns and starting their own such services.”

Tyson Foods, for example, recently entered the burgeoning business that has long been dominated by start-ups. The company recently partnered with Amazon to offer Tyson Tastemakers, a line of chef-inspired meal kits featuring premium proteins. The kits will be produced by Tyson and delivered by Amazon Fresh delivery trucks.

Tyson Taste Makers meal kit delivery service
Tyson Foods recently partnered with Amazon to offer Tyson Tastemakers, a line of chef-inspired meal kits featuring premium proteins.

Tyson’s president and chief executive officer Donnie Smith, during a May 9 earnings call with securities analysts, said he expects Tyson Tastemakers will be a contender in the meal kit delivery service market due to the experience it offers consumers.

“We’ll inspire them to explore and cook with ingredients that they may have never used before,” Mr. Smith said. “We’ll teach them about the cuts of meat and where they come from. We’ll help pre-cut, trim, dry age, smoke, marinate, and do the prep. All they have to do is cook it.” 
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