Trends Shaping The Meal Kit Industry and Market Outlook

Perhaps one of the most innovative businesses we have seen develop over the past few years is the meal-kit delivery industry. This convenient service does cooking and enjoying homemade meals much more accessible. Meal Kit services are highly customizable, offering many options for personalization. Your imagination only limits the experience centers around the customer and what you can get.

The food business is attempting to return to the full-service method, which focuses on the customer’s needs, which was once traditional long ago. This approach fell by the wayside when self-service grocery stores came on the scene before WWI. A few decades later, self-service stores developed into warehouse clubs and supermarkets that offered low prices, various foods, and a DIY convenience.

There are several reasons why the food industry is suddenly looking to become more convenient. First, more consumers are concerned about work. People are working longer shifts, and more women are going to work rather than staying home. Finally, it’s gotten to the point where long trips to the supermarket just are not practical.

Meal kit services represent both technology’s part in the lifestyles of working consumers and the food business’s reply to the consumers’ request for more convenience. Top meal kit services advertise compelling images of their dishes on social media and websites and deliver complete kits to the consumer’s door.

Within the meal kit industry, several trends have developed. Following is a list of the top ten.

Sustainability Commitment

Regarding waste, meal kits are much friendlier to the environment than grocery stores. Proper packaging materials, such as plastic, are used for meal kits, but the packaging is not a significant factor in meals’ environmental impacts. In terms of carbon footprints, the emissions from processing and distribution, farm equipment, and fertilizer production are more important than those from packaging used to maintain the freshness of food. Many consumers still seek more packaging improvements, such as fewer plastics, more compostable packaging, and insulation made from recycled materials. In 2023, the meal kit industry is likely to make changes concerning the sustainability of its services, especially in packaging and changing consumer perceptions.

Diet Specialization

A key reason why many people opt for meal kits is to make following a diet more accessible. This has not gone unnoticed by the meal kit industry. In fact, in 2019, Blue Apron engaged in a limited partnership with Weight Watchers. Other kit services concentrate on particular diets. For instance, some meal kit services offer keto, paleo, or vegetarian meal plans. Over the next year, we can bank on more meal kit services specializing in niche diets.

Organic Foods

By current health trends and environmental concerns, many consumers are interested in consuming only organic foods. The meal-kit industry is aware of this. Although organic farming standards differ from region to region, organic ingredients often share a few characteristics. These include ecosystem preservation, consideration for water supply, and biodiversity. Unfortunately, organic ingredients are sometimes hard to find when shopping in grocery stores. However, meal kit services eliminate this difficulty.

Catering to Lifestyle Choices

Appealing and catering to individual lifestyle choices is another growing trend within the meal kit industry. For instance, the vegan lifestyle requires an individual to avoid meat and animal-based food. As a result, unique ingredients are often needed to prepare basic meals. Meal kits make it easy to maintain a vegan lifestyle while offering various choices. Other lifestyles, such as those that require fast or easy cooking but do not require special foods, or avoid certain foods, are also met through meal kits.

Increased Meals

A primary selling point of meal kit services is the time they save you. Instead of having to decide what to eat, get a recipe, go to the grocery store, and all of that, you order your meals, and everything is delivered to you. However, most meal kit services provide dinner only. You still have to shop for breakfast and lunch. This dampens the time-saving theory. That is why, in 2017, Hungryroot shut down its popular business and re-opened with the option to have every meal, including snacks, taken care of. Other meal services will likely follow Hungryroot’s example.

Competitive Pricing

Thanks to advanced logistics and automation processes slashing operation costs, consumer pricing within the meal kit service is more competitive. Although the price of meal kit services has been reasonably high in the past, a few benefits, like EveryPlate and Dinnerly, have found ways to cut costs, allowing them to provide more affordable pricing. As many meal kit services struggle to obtain and keep customers, partly due to the high price, we can expect more meal kits to look for ways to lower costs to appeal to more consumers.

Pre-Made Meal Choices

Another key selling point for this industry is convenience. When this industry began, meal kits sent ingredients and a recipe for you to follow, and you cooked everything yourself. Although handy, this required a time commitment and prepping, cooking, and cleanup. Recently, pre-made meal kits have become popular. These come pre-cooked and require no preparation or cleanup. We can bet that the next stage of meal kits will completely do away with the prep and cook steps.

Large Companies Buying Smaller Ones

It has been a growing trend in recent years for big companies to buy out small ones. For instance, Chef’s plate was bought out by Hello Fresh, and GoReadyMade was bought out by Freshly. By purchasing the smaller companies, the more giant meal kit services are expanding their operations while decreasing competition. As meal kit services continue to develop and need to be profitable, the acquisitions and mergers will probably increase.

Extended Delivery Services

The convenience of delivery is another reason some people use this service. In light of this, many meal kits are beginning to offer comprehensive delivery services. In addition, some meal kits offer multiple delivery times throughout the day, making them good breakfast, lunch, or dinner options.

Outside Investments

In the beginning, meal kit services were backed by huge investments. However, lately, some of these companies are trending towards outside investments, especially those specializing in a particular niche. Plant-based Purple carrot, for instance, raised $12.8 million through funding, and Sun Basket raised $125 million from outside financing.

Meal Kit Industry Stats and Growth Projections

  1. The meal-kit business is worth approximately $5 billion.
  2. Additionally, 17% of consumers in America have subscribed to a meal kit service at some point.
  3. Of the Americans who subscribed to meal kit services, 90% referred others to the service (Packaged Facts).
  4. 25% of city people have tried meal kit services, compared to just 14% in rural areas.
  5. 26% of the Generation X population has tried meal kit services.
  6. Out of the millennial population, 29% have tried meal kit services.
  7. Regarding people aged 45 and up, merely 12% have tried meal kit services.
  8. 23% of men and only 15% of women have tried meal kit services (Money).
  9. Meal kits delivered to the home are believed to be healthier than restaurant food by 81% of US citizens (USA Today).
  10. The meal kit delivery industry is estimated to be worth $11.6 billion by 2023 (Statista).

Regarding revenue, the US grocery business still largely outranks the meal kit delivery industry. However, meal kit services are a powerful force within the food industry. Meal kit services are a strong example of the campaign to offer consumers more convenience for eating fresh, healthy foods. Additionally, the meal kit delivery business fits in the definition of the electronic ordering of groceries for delivery from traditional stores.

Meal kit services tackle the ongoing demand for convenience. Both food service operators and retail grocers are responsible for delivering food to consumers and the dinner tables. Food service operators, convenience stores, retail grocers, and other food marketers are making strides to provide meal delivery services. Busy parents and working consumers who do not have much spare time usually seek out time-saving trends within the food industry. In addition, young consumers who are not well educated in preparing and cooking meals are also more inclined to subscribe to meal kit services.