Rishi - Jan 2, 2020

Are Meal Kits against the trend of online food delivery?

Before we start, I think it’s essential to set the context of this write up. We at DailyKit are very big proponent of Meal Kits and how it will change the future of food consumption. We play our role in spreading the word of meal kits by enabling existing food businesses to start an in-house meal kit service.

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To all the people we have talked to till this day and in the future, there is one question that remains at the forehead of each; Why would someone prefer meal kits when they can get cooked food delivered from the restaurant?

The question has many forms but the gist is the same. How does meal kit compete with the rising trend of depending on online food delivery for our daily food? Well, before we go further, let me say it out loud

 

“MEAL KIT DOES NOT COMPETE WITH COOKED FOOD”

 

Why do we say so? Because comparing meal kits with cooked food is like comparing apples and oranges. I mean you can compare apples and oranges on the basis that these both are fruits but they offer a different value proposition all-together, just like in the case of meal kits and cooked food.

Let me elaborate further. When you visit a restaurant, or any establishment that offers you ready to eat food, either via delivery/takeout/dine-in, you are offered a product that can be consumed immediately.

This can be better explained by the concept of consumer need states.

A need-state is defined by a group of consumers who seek similar product benefits and attributes in a particular usage occasion. Need-state segmentation overlays usage occasions onto attitudinal classifications.

Let’s take Mike for eg; Mike is a 35 year old guy who works an IT job and has a family with 2 children. Mike’s day starts with leaving for office. On some days, his wife may prepare breakfast for him but if not, he would typically grab a bagel and coffee from any nearby cafe/Deli. Now, around 1, Mike has a business lunch with his colleagues. So, Mike may select any casual dining or a cafe where they can have healthy lunch along with professional conversations. Tonight, it is their anniversary, so the couple had reserved a fancy restaurant to celebrate their 10th anniversary.

The point to be picked here is that what Mike chose to spend money on for his food was dictated by the need states he was present in.

What does need states and Mike have to do with all this? Well, right now, for all the need states we have, we are presented to first choose between 2 choices; Directly consumable vs Cook and Eat.

Now, each week, there are almost 21 need states we are presented with. These may not be very clear and the lines may blur from person to person but each person has a unique need state that revolves around all the factors going on in our life.

When it comes currently to fulfill these need states, while despite how much convenience cooked food has to offer, Majority of the households choose Grocery.

The decision to choose between grocery or restaurant falls down completely to the consumer in accordance with their need state. Businesses can only sway the decision to side with their brand when choosing any among grocery or restaurant.

So, another question arises; Why is that when we have a full range of services offered in cooked food segment, why is still grocery as the major mode of need state fulfillment?

Well, from person to person the reasons and their significance may be different but the underline is tied to the roots that we grew up with. I mean, it’s not like there’s something missing from the restaurant industry, with on-demand delivery and broad range of different niches around, it is practically possible to eat a different dish for each meal. Then why do we not do that and still rely on grocery? I mean, it can be attributed to the reasons such as cost effectiveness, more transparency but at the end we all know, 100% need state fulfillment through cooked food or in plain words, eating out daily is not sustainable, not only from financial or health point of view, rather the very loss of homely feeling.

Now, the above argument does not claim that grocery is rising and what we are observing is not true. Definitely, there is a rising trend of online food delivery. Infact, I personally use it for 60% of my need states but the question arises on what do I do when I don’t want to eat out.

Well, currently grocery seems like the only way. Now, when we say grocery, we mean the exercise of planning shopping lists, going to the grocery store, storing the ingredients in the kitchen and then actually do the cooking which is a challenge in itself.

Now, current way was perfectly fine if the people eating out were miniscule and only on special occasions, but the more we eat out, the less worthwhile grocery becomes for us. So, while for a person who rarely eats out, it makes the best sense to depend on current way of grocery, for people like us who eat out regularly, maintaining a kitchen is a hassle that we know of.

This is where Meal Kit steps in. The increased trend of eating out is because of increased demand for convenience and less planning. People don’t want to do grocery shopping anymore but rather prefer meal shopping. When purchasing meal kits, your experience of purchase is similar to that from a restaurant as compared to purchasing grocery which requires a dedicated effort.

So, now that we have this understanding, let me say it out loud, Meal kits are not against the trend of online food delivery rather meal kits compliment the rise of online food delivery. Our existing system of grocery does not work together with this trend, so the more people will eat out, the more we’ll see conversion of grocery towards meal kit.

To conclude, Meal kits are not against the trend of online food rather needs to be formulated and structured in a way that will perform along with our changing lifestyle.

 

Written by Rishi