Archive for January 22nd, 2018

Service of Meal-Kits: Less Work for Mother and Father—Or Is It?

Monday, January 22nd, 2018

I founded Delivered Delicacies in the dark ages. I brought prepared foods and the best-of bread, pasta, desserts and more from Manhattan vendors and dropped them off at my clients’ homes and apartments in Brooklyn Heights. In the day, the Heights was a food desert.

Good idea yet there were many reasons the business failed: Too small a pool of potential customers; most didn’t share my passion for great cheese, pâté and other goodies and didn’t get the concept of topnotch prepared food. I soon learned that there was a reason that none of this was available in the neighborhood.

More than Brooklyn has dramatically changed since then: Americans everywhere increasingly appreciate first-class food. It’s no surprise that the meal-kit business has taken off. According to Heather Haddon’s Wall Street Journal article some brands are still thriving in spite of the title, “Once-Hungry Investors Pass on Meal-Kit Startups– Investors are losing their appetite for meal kits.”

A meal kit comes with fresh ingredients and recipes. You cook. An article on Buzzfeed.com in November, noted prices for three meals for two from companies that deliver nationwide ranged from around $72 for Sun Basket and Plated to around $60 for Gobble, Hello Fresh, Home Chef, Marley Spoon and Blue Apron.

Haddon wrote that in the last five years some 150 new meal-kit companies opened so “A shakeout was perhaps inevitable,” according to investors and analysts. I heard a commercial on Bloomberg Radio for Hello Fresh this weekend.

Some “still expect the sector to continue to grow as people look for easier ways to cook at home. Meal-kit sales are projected to grow to more than $6 billion in 2021 from around $2 billion in 2016, according to consultancy Pentallect LLC. Also, meal-kit companies targeting certain diets and taste preferences, such as a paleo diet, could perform well, backers say.”

Hurdles to food startups, wrote Haddon, include larger rivals and some “say meal-kit startups have lost all novelty with Amazon, Wal-Mart Stores Inc. and Peapod LLC, as well as supermarket chains such as Kroger Co., getting into the business. Bigger companies typically don’t depend on subscriptions and can sell meal-prep kits more cheaply.” Wal-Mart must have tracked my online research because I got an offer for their meal-kit out of the blue last week!

Another significant challenge to the meal-kit business is the expense of keeping subscribers. In a survey the negatives consumers pointed to were the expense, “the burden of having a subscription,” and delivery difficulties. One woman dropped out because too much food was going to waste; another grew bored with the concept and frustrated “with all the packaging.”

I would hesitate before investing in a finicky industry like food that is so impacted by trends, the latest being deliveries of meals from high end restaurants. Do you think meal-kits have the kind of legs one forecaster predicted, noted above, of a $6 billion industry by 2021? [though who, in three years, will remember they said this?]. Let a major thing go wrong with a bunch of meal-kits or if enough people tire of the concept, poof, the kits will go up in smoke. Have you tried a meal-kit? Would you be interested in doing so if you haven’t yet?

Get This Blog Emailed to You:
Enter your Email


Preview | Powered by FeedBlitz

Clicky Web Analytics