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

January 22nd, 2018

Categories: Fad, Food, Time Saver

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?

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10 Responses to “Service of Meal-Kits: Less Work for Mother and Father—Or Is It?”

  1. Deborah Brown Said:

    Based on the delivery of many different food and kit suppliers on my street and in the neighborhood, I’m surprised anyone still goes to the market! Deliveries begin at 6:00 AM and go until 10:00; maybe longer. I see all the popular ones you mention; I see Fresh Direct trucks unloading what appear to be thousands of boxes for delivery every morning. Amazon Fresh with their cheery green totes seems to be gaining traction on the upper west side. Granted, the area has plenty of affluent apartment and condo owners to whom price is no object; they just want the convenience. The names and formats may change over time but I think this trend is here to stay. I would love to see delivered meals targeted at seniors where the containers are easy to open, easy to heat if needed, nutritionally and calorically balanced, color coded for the seeing impaired, etc.

  2. Jeanne Byington Said:

    Debby,

    Food shopping with children can be a nightmare, I’ve observed, so anything that short-circuits that process is a blessing. That’s the upside. The expense might not make this possible for all those who would benefit.

    As the forecasters predict a healthy future for niche meal-kits, one targeted to seniors makes great sense.

    I predict that local markets will have plenty of staples, like English muffins and milk, so that if you run out on a Saturday morning, for example, and can’t wait until a delivery arrives for your breakfast and you want to eat at home, you have backup.

    Sometimes I don’t know what I want to eat so a stroll through a good supermarket helps. I may see a sale on lamb chops, for example or sample a cheese I’m unfamiliar with. It will be sad if we lose the choice of shopping in a supermarket. And price is an issue for many which is clear if you’ve visited a Trader Joe after work or on Saturday.

  3. ASK Said:

    As long as my legs function and I can manage the elevators in my apartment building, I will continue to shop in my local markets, one of which is easily accessible on foot. I like to cook, try new foods and recipes, and do not like to deal with subscriptions, deliveries and the packaging of the kits. Recently, in my neighborhood, we have added 2 new branches of the International Food Bazaar,a market that caters to local ethnic tastes. The array of fresh produce and meats (they actually have real butchers on staff) is staggering and far surpasses even Whole Foods.

  4. Lucan Said:

    I like to eat, take seriously how, where and what I eat and especially what it tastes like. I am finicky, critical and difficult to please, but when I am happy, I’m very grateful.

    I think good eating does not have to be as complicated as the experts make it out to be, at least in daily, as opposed to celebratory, meals. However, everyday cooking does involve following some basic rules. Use only truly fresh and/or properly aged ingredients. Don’t be lazy or in a rush, but do be flexible, even creative if you wish. Pay close attention to how the food is prepared and presented for consumption. Remember the KISS (Keep it simple, stupid.) principle. Avoid gimmicks and gadgets, microwaves and frozen food.

    I’d consider meal ingredient packages to be an unnecessary gadget. The time consuming part of meal preparation is the cooking and presentation, not the ingredient collecting. Furthermore, not to speak of added expense, yet another middle man between farmer and table virtually insures more time spent in the delivery process. This isn’t like ordering a pie from the baker down the street.

  5. Jeanne Byington Said:

    ASK,

    Like you, I prefer to see what I’m buying. I don’t like wasting time in a supermarket or food specialty store however. If one is poorly planned I become irritated–putting potatoes near the green vegetables and miles from onions–or if a food store keeps moving around departments and I must ask for the locations of everything I want.

    International Food Bazaar sounds great.

  6. Jeanne Byington Said:

    Lucan,

    It should take longer to prepare than to shop for food–I agree. Some stores make it easier than others. It also depends where you live and where you like to shop. There’s a supermarket inches from my front door that is so much more expensive than any other store around that I happily walk a few blocks not to irritate both myself and my budget. The high end deli next to my office is less expensive and has higher quality selections.

    You make a good point about the price. Involve shipping with layers of people and something’s gotta give–the quality to keep prices within reach if nothing else. Further, how does the kit maker know that I’d rather have more spinach and less potato or vice versa?

    Where it makes most sense would be if someone with a newly diagnosed disease needs a drastic change of diet. To help in the transition, and achieve a decent tasting result, the kit might be perfect and a great idea for a get well gift.

  7. Lucrezia Said:

    Reminds of TV dinners, some, tasted like cardboard, others, not so bad. Food fads are unpredictable. A gambler will see countless dollar signs, the cautious type sees standing on a street corner in a barrel with suspenders. Take your pick, folks!

  8. Jeanne Byington Said:

    Lucrezia,

    The crucial difference between these kits and TV dinners is that you must make the former while the latter needs only to be heated. So the only time saved is collecting ingredients and if you don’t know how to cook, finding a recipe that would be included in the kit. Millions like the idea so….who am I to argue. The question is: For how long?

    We buy an exquisite tomato sauce from a local NYC vendor. Homer nevertheless doctors it. So I imagine that as good as a kit might be, the purchaser had best have some spices and condiments on hand to give a recipe zip, if necessary.

  9. Lucrezia Said:

    Neither concept sounds appetizing — even though my cooking skills are minimal at best, think I’ll stick to the real stuff!

  10. Jeanne Byington Said:

    Lucrezia,

    In a search for lettuce, say, I have left a store empty-handed when what they are selling looks wilted and tired. I wonder whether all the ingredients that are sitting around in packaging can be anywhere near as fresh as what some markets sell or better yet, some farmer’s markets. But clearly I’m too fussy because these kits are selling like hotcakes!

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