When it comes to Value Propositions, Convenience is the king of the Food Industry. There’s a history of food products which went viral such as Instant Noodles. There’s nothing more convenient than tossing dried noodles in boiling water with seasoning and enjoy a hot meal 5 minutes later. There are countless examples of such products that became a billion $ industry such as Frozen Food, Snickers etc. Products like these have everything against them in terms of ideal food such as they often contain preservatives, high salt, aren’t fresh, low nutrition but still triumph and go viral because of convenience. In an absolute sense, Instant noodles is a form of Meal Kit though, in general understanding of Meal Kit, ingredients are freshly simulating the grocery experience.
Meal Kits should have made cooking convenient but here again, it failed. In the famous Subscription model, Consumers select 3 recipes and get it delivered by shipping next week.
All the ingredients travel from Farms to a central location which are massive factories where personnel portion out ingredients and assemble them into a box. These boxes are then shipped via services such as FedEx across the country with bulky ice gels and cardboard box. Leave apart the environmental concerns, the pressing problem here is that consumers have to wait 7 days so have to cook Meals asap while freshness is fading away each day. In fact, for 95% of companies, every ingredient is in raw form so it’s all the cooking work except just purchase of Grocery.
This model is perfect for selling Meal Kits as a fancy way of cooking dinner but Meal Kits are the solution to daily food challenges and will become the preferred choice of consumption only if the convenience improves to a degree of Grocery or that of a Restaurant. Consumers shouldn’t have to plan a week before to cook. The history of Industrialization of Food in the US had its effects on Meal Kit Industry by setting up nationwide factories shipping through the air, however,counter-intuitive this model be. As a fact, Consumers pay 30-40% of Meal Kit cost in Packaging and Shipping. So what it should be?
Let’s have a different look at the supply or production side. In an ideal scenario, a product is convenient if the supply can meet demand instantaneously. On a funny note, A genie would be convenient but its magic. Technology is also magic, only real magic. Supply chain technology has evolved. Using technology, Restaurants, Grocers, Mom & Pop Meal Kit Stores can produce them in under 3 minutes. Meal Kits can be produced anywhere and delivered in an hour or pick up in 15 minutes. Every business will have its own niche just like in terms of restaurant industry fulfilling 360-degree consumer need states.
In a nutshell, while the model of huge factories and shipping Meal kits isn’t that bad, it isn’t intuitive, economical, sustainable. The future of Meal Kit is hyper local production and on-demand delivery. This should break the shell of the embryo that the industry is in right now.