Meal Kits on the M-O-V-E
Is this evolving trend a developing opportunity for deli meat makers?
By Kathleen Furore
One Google search of the term “meal kits” will tell you everything you need to know about the popularity of these do-it-yourself dinner options. Or it might tell you nothing at all! With about 12,700,000 listings related to meal kit companies and delivery options as of May 2018, it’s almost impossible to know what to make of the market.
Is it growing? Leveling off? Expanding into new categories as consumers fine-tune what they want out of partially prepared make-it-yourself meals?
While the answers to those questions are constantly changing, one thing remains clear: due to its size, the market for meal kits is one retailers, foodservice operators and meat and cheese processors can’t afford to ignore.
As the Packaged Facts Report “Meal Kits Delivery Services in the U.S., 2nd Edition” notes, “From Amazon to Walmart to Wall Street and Unilever, everyone is watching the meal kit delivery services space, which has mushroomed to $5 billion in sales.”
Home Chef Prosciutto Caprese Sandwich
Measuring the Market
Understanding just who is buying meal kits, and what they expect from the experience, is the first step on the road to becoming an important player in the meal kit marketplace.
According to Nielsen’s 2018 “Meal Kit Mania: Innovation for Foodies” report, 9 percent of Americans say they’ve purchased a meal kit either online or in-store in the last six months. And if you think 9 percent isn’t an impressive number, consider that it represents an impressive 10.5 million households!
And that’s not the only statistic that shows the opportunity meal kits offer: 25 percent of consumers (more than 30 million households) say they would consider trying a meal kit in the next six months, Nielsen reports.
While those numbers are important, knowing what consumers want in the meal kits they buy is even more essential to ultimately succeeding in the space.
Packaged Facts data, for example, shows that time savings is the most desirable aspect of the service. “Quality, variety, and healthfulness in meal selections are also highly valued, as are learning how to cook new things and sharing meals and experiences,” the meal kit report adds.
Pricing is also part of the equation.
“Almost 60 percent say value for the money is extremely important, and almost half (49 percent) say low-cost items are important,” the Nielsen report says. However, “In terms of what they experience across the meal kit landscape, 56 percent of consumers disagree that meal kit services are affordable for everyone.”
Nielsen’s 2018 “Meal Kit Mania: Innovation for Foodies” report
From Delivery to the Prepared Deli Case
A category that started as meal kit delivery subscription services from companies such as Blue Apron has morphed into a trend infiltrating almost all aspects of the food industry.
As The Economist reported on April 14, 2018, “Supermarkets have gobbled up the meal-kit idea and made it their own. Instead of enrolling customers in a weekly menu of meals, these companies offer in-store kits on a day-by-day basis.”
Examples include Albertsons, which bought the premier meal kit service Plated in September 2017.
The move was “a strategic step for the company as it continues to focus on innovation, personalization, and customization,” company information says. “Together, Albertsons Cos. and Plated will leverage their diverse and complementary strengths to serve customers in a way that appeals to the evolving lifestyles and food preferences of people across the country. Among the key projected outcomes of this deal is for Plated to become the first omnichannel meal kit offering with national scale.”
More recently, meal kit company Chef’d announced a partnership with Smithfield Foods to bring Chef’d meal kits to grocery stores nationwide. This month, Costco, Harris Teeter, Tops, Hy-Vee, Weis, and Gelson’s Markets started carrying the kits, which feature ready-to-cook pre-portioned ingredients, including fresh herbs, leafy greens, and USDA Choice proteins.
“Meal kits are the fastest growing channel across the entire food industry,” Sean Butler, senior vice president of retail at Chef’d, said in a statement. “The expansion of Chef’d into retail enables us to serve the large group of shoppers who have never tried a meal kit but are eager for non-subscription solutions.”
Iowa-based West Liberty Foods, a food manufacturer offering protein solutions to many well-known food service and retail customers, recognizes the role meal kits can play in the retail arena.
“Any effort grocery retailers make towards providing meal kit-esque offerings is going to be a win for both retailers and their consumers,” says Erin Ronzheimer, director of marketing. “Consumers are searching for convenience but aren't entirely ready to let go of the process of putting a meal together. Meal kits make dinner easy for busy parents, and they can also be ‘experimental’ enough to entice the Millennial consumer who is always wanting to try something new and different.”
Interestingly, foodservice has even become part of the picture where meal kits are concerned.
This April, online grocer Peapod expanded its popular meal kit line with its first-ever restaurant collaboration. The company now offers dishes from two restaurants that are part of Lettuce Entertain You Enterprises: Big Bowl, known for its Chinese and Thai cuisine, and Wildfire, a classic steakhouse. The new meal kits are available for home delivery in Chicago, as well as the New York and D.C. markets that Peapod serves.
“Meal kits are the fastest growing channel across the entire food industry.”
– Sean Butler, senior vice president of retail at Chef’d
The Italian-inspired Charcuterie Platter from Chef’d includes Parmesan Cheese, Prosciutto, Calabrese, Smoked Almonds, red grapes, honey and crusty bread rounds.
Deli Meats: a small but growing presence in meal kit options
As popular as these kits have become—both in the delivery realm and in supermarket settings—the presence of sliced deli meats is minimal at best.
West Liberty Foods, for example, has “taken on kitting,” but is “seeing meal kit-friendly products through our ‘water cook’ lines more so than our slice lines,” Ronzheimer reports. “There are a few instances in which a thick-cut protein (think carved turkey, thick-sliced pork loin) is applicable… Unfortunately, there is less of a correlation between meal kits and lunch meats. We believe this is because lunch meats equate to sandwiches which most often equate to the lunch daypart. This is why many retailers offer ready-made sandwiches and salads as a grab-and-go offerings. ‘No assembly required’ is often a great solution for a quick, effortless lunch.”
That is changing, albeit more slowly than deli meat manufacturers might like.
Ingredients for Home Chef’s Prosciutto Caprese Sandwich: Prosciutto, French Rolls, Mayonnaise, Sliced Mozzarella, Roasted Red Peppers, Baby Spinach
Sliced deli meat is also part of the Italian Inspired Charcuterie Platter from Chef'd. The kit includes ingredients to build a charcuterie board including Parmesan cheese, Prosciutto, calabrese, smoked almonds, honey, red grapes and crusty bread rounds. A Spanish Inspired Charcuterie Platter with Manchego Cheese, Spanish Chorizo, and Corn Nuts is also available.
The expansion of meal kits from subscription delivery services into the retail and foodservice arenas provides deli meat companies new avenues of opportunity to become players in what has become a significant category—a category these manufacturers would be wise to tap, whatever approach they take.
As David Sprinkle, research director for Packaged Facts, says, “Meal kit delivery services are a specialized sector but widely disruptive force in the food industry. This space is the most striking example of the movement toward greater convenience in getting fresh foods to the consumer.”
Last fall, for example, Home Chef debuted 5 Minute Lunches—a category that includes an easy-to-assemble Prosciutto Caprese Sandwich.