March 30, 2018
Most of us would love to be gourmet cooks, if we only had the time, money, knowledge, and flair that are required. But now, as long as you have the money and a few pots and pans at home, you can pretend to be Martha Stewart and nobody will be the wiser.
Indeed, a plethora of companies are competing to help you prepare an epicurean feast—among them, Plated, Blue Apron, Hello Fresh, Home Chef, Purple Carrot and Peach Dish.
While the food retail landscape isn’t one that sees an over-abundance of frequent, market-shifting innovation, meal kits are proving to be just that, according to polling of U.S. households by Nielsen—which has discovered that fully 25% of the U.S. population would consider trying a meal kit within the next six months and that 9% (or 10.5 million households) have done so already.
Of the 9% of Americans who have tried a meal kit, 6% have purchased exclusively online. And as a result, online meal kit companies are seeing tremendous growth.
What’s more, traditional retailers also are enjoying success with a range of in-store meal kit offerings. Notably, in the year ended 2017, in-store meal kits generated $154.6 million in sales, posting growth of more than 26% year-over-year. For context, total brick-and-mortar sales for center-store edibles (grocery, dairy, frozen foods) dipped 0.1% last year to $374 billion.
Interestingly enough, the Nielsen study found that more than one-fourth (26%) of meal kit users already classify themselves as gourmet cooks. By comparison, only 16% of U.S. consumers consider themselves to be gourmet cooks—highlighting the notable appeal of meal kits to this consumer segment.
On the flip side, 15% of Americans consider themselves frozen foodies, yet only 9% of frozen food consumers are meal kit users.
What do meal kit buyers want? Nearly 60% say value for the money is extremely important, and almost half (49%) say low-cost items are important. In terms of what they experience across the meal kit landscape, 56% of consumers disagree that meal kit services are affordable for everyone.
For retailers and pure-play meal kit providers alike, this insight suggests that they need to clearly articulate the value their offerings provide when pitted against traditional options.
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