With increasingly busy lifestyles today, subscribing to meal kit delivery services continues to get more popular. The bold idea of subscribing to a service that prepares your meals for you takes the guesswork out of cooking: no more planning, grocery shopping or prepping. The amount of time saved can then be allocated to something else – perhaps something more productive or relaxing. Essentially, it’s a solution to the age old question, “What do we eat?”
This meal kit market is niche, but it is growing at a rapid pace. Since its introduction in the US in 2012, the business has catapulted into a billion-dollar industry in 2015. People are so attracted to the idea of getting restaurant-quality meals in the comfort of their own homes, that experts predict meal kit businesses will grow to a $10 billion industry by 2020.
Surprising Global Leaders
With meal kits transforming from a niche market into an industry worth billions of dollars, it’s easy to assume who the top names are today. However, a surprising revelation recently came to light: Berlin, Germany-based HelloFresh is the leading name in the meal kit market in the United States.
HelloFresh purchased Green Chef last March, and together they are controlling 36% of the industry. They have surpassed American company Blue Apron, whose market share went down to 35% (it was a whopping 48% in the same period of 2017), according to data released by Earnest Research.
Generally speaking, Americans have flocked over to the meat kit idea; sales grew 40.7% in 2017 and show no signs of slowing down anytime soon. With or without the Green Chef acquisition, experts say HelloFresh would have taken over the industry and leapt over Blue Apron’s sales anyway as they appear to be struggling with customer retention and warehousing issues.
Blue Apron went public in August 2017,HelloFresh following four months later. It’s impressive that the HelloFresh’s sales grew five times faster compared to Blue Apron. As such, HelloFresh’s revenue in the States alone increased 90% – that’s $678 million in 2017. Blue Apron has a US-only market, which still rose to $881 million (an 11% increase). While analysts say neither company is profitable yet, HelloFresh is one step closer thanks to its US market.
Other significant names in the US meal kit market include Plated, Sun Basket, and Home Chef. Munchery is also quite significant not just in the States but worldwide.
A Decade-Long History
Middagsfrid was the first ever meal kit company launched in Sweden in 2007 by Kicki Theander. It took a while before people jumped on the bandwagon. In the US, meal kits have become extremely popular for dual-income citizens, especially college-educated ones, and typically used by families with no kids. It’s unsurprising the meal kit is popular in and around major metro areas, as people who reside there generally have a fast-paced lifestyle that gives them little or no time to cook healthy and delicious meals at home.
As of 2016, over 170 meal kit businesses around the world, with over 150 of these located or based in the US. These include niche operators, such as companies that sell only one type of food (such as smoothies or desserts). In the same year, these companies have combined sales of over $1 billion, with the US accounting for 40% of it.
Latest data reveals that the meal kit industry is now worth $2.2 billion, and shows no signs of decreasing. Names big and small are all banking on the bold idea.
Also last year, Albertsons Companies, one of the major grocery chains, bought Plated for an undisclosed amount that has been estimated to be between $175 to $200 million.
Today, more companies are utilizing the meal kit idea, disrupting the industry even further. Major grocery chains Rouses and ShopRite have jumped in, offering meal kits whose prices are comparably lower those of HelloFresh and Blue Apron. San Francisco, California-based Walmart is also targeting to release their own service to 2,000 store locations by the end of the year. Interestingly, Weight Watchers is planning to offer their own meal kit this year as well.
Undeniably, this is a profitable business – one in which bold minds are not afraid to With both major companies and startups joining this movement, people can spend less time fussing over what to eat and more time doing things they want to focus on.
