Technomic expects the fresh food subscription market to become a multi-billion dollar segment over the next five years. (Photo: Martha & Marley Spoon)
Home-delivered meal kits are reinventing dinner time by bringing busy couples and families back to the kitchen table to enjoy a home-cooked meal. Global sales surpassed $1 billion in 2015 and were likely double that this past year, according to Technomic Inc., Chicago. The US market alone is projected to grow tenfold during the next five years, with worldwide revenues from fresh food subscriptions to top $10 billion by 2020.

“This market initially gained traction overseas, but today the US represents nearly 40 percent of the global market,” said Erik Thoresen, principal at Technomic. “We project the fresh food subscription market in the US alone will grow to a multi-billion dollar market over the next five years. This growth is fueled by growing consumer acceptance of the subscription service model, as well as a strengthening food culture within the mainstream market.”

Meal kit services are designed to deliver fresh, pre-measured--sometimes even prepped, for example diced onions or sliced mushrooms – ingredients to the door steps of consumers. Shipments include most ingredients for a selected recipe, along with cooking instructions and serving suggestions. Household staples such as salt, pepper, eggs and cooking oil are often excluded. 

Most meal kit businesses function as assembly operations by using pre-packaged or whole food ingredients. Ingredients requiring portioning or prepping are prepared in a separate facility in order to ensure food safety and prevent cross contamination. A growing number of food processors are now offering smaller portion packs of ingredients for use in such kits. Think 2-oz. bags of shredded cheese and 1-oz. pouches of sour cream.


 Blue Apron
There are nearly 100 similar home-delivered meal kit concepts, a number of which participate on a regional or local level. (Photo: Blue Apron)
The majority of services offer meat- and poultry-based entrees. These proteins come trimmed and evenly portioned, as in the case of chops or chicken breasts. To ensure food safety, raw animal proteins are carefully packaged and sealed in an approved facility. This also helps maintain quality during distribution and provide a few days of shelf life in the recipient’s refrigerator. 

The concept of home-delivered meal kits began in 2012 with HelloFresh in the UK and Blue Apron and Plated in the US, and was an instant success. These three brands maintain the largest share of market in the States; however, today there are nearly 100 similar concepts, a number of which participate on a regional or local level. Points of differentiation include celebrity and chef endorsements, regional recipes, paleo and plant-based only menus, and organic. Even grocery delivery services such as Peapod and The New York Time’ cooking website offer meal kit programs.

In its review of 2016 food trends, Rabobank, New York, reports that the home-delivered meal kits business is expensive to compete in and that 2017 will likely be a year of consolidation with only a few winners emerging. Still, there’s a large – and growing – audience for this convenient, fresh service. This is because consumers are dining at home more. And while they value fresh and authentic foods, convenience remains an important part of the equation, stated The NPD Group, Chicago, in its 2017 food forecast. 

The idea of preparing a meal from scratch, yet not having to shop for the ingredients resonates with today’s time-deprived consumers. The concept provides busy consumers with the tools to cook dinner at home, which is what the vast majority (98 percent) of recently surveyed Americans said they prefer, as compared to having prepared food delivered or ordering takeout.


Click to see larger view. (Source: ReportLinker)
France-based ReportLinker conducted the online survey of 502 adults, which was representative of the U.S. population, in November 2016. Results showed that 36 percent of Americans cook at home daily and 50 percent cooking between three and six days a week. Nearly one-third (31 percent) of respondents stated that lower cost motivates them to cook at home, while 22 percent said their desire for healthy fare drives them into the kitchen. 

Although cooking is still very common among all Americans, millennials have been much more reluctant to turn on the stove, but that is changing with home-delivered meal kits. The ReportLinker survey results showed that 15 percent of millennials have used one of these services in the last year, compared to just 10 percent of all Americans. Of the 90 percent of respondents who have not tried such meal kits, 80 percent have no interest in doing so. 

This data suggest that millennials will be the drivers of the home-delivered meal kits concept, and thus menus should be designed to appeal to their adventurous taste buds. This includes boldly flavored and ethnically inspired meat and poultry entrees.