Rishi - Sep 30, 2019

Ideal Labour Cost for Meal Kits

 

It’s complex to pin down exact numbers on the labour cost but here are some assumptions

Let's say, it takes one person roughly 60 seconds to gather an ingredient, portion it using weighing scales and then package it.

We assume that the person is trained with the kitchen ergonomics and also Dailykit Technology.

So, for a meal kit with roughly 10 ingredients, it should take about 10 minutes to portion.

And let’s assume it takes 30 seconds to scan an ingredient and put it inside a bag.

So, that brings the total time to pack a meal kit from scratch to assembly to 15 minutes at maximum.

Please note that the time taken is very relaxed and in general the staff in kitchens are fast moving where seconds matter.

At minimum wage of 11 dollar, the cost to pack a meal kit in labour should amount maximum upto 2.5 dollars.

Now, the thing to be kept in mind is that this cost does not scale linearly when doing meal kits of higher serving unlike in a restaurant menu.

This cost remains same despite the cost of ingredients so the fancier the recipes, less will be percentage of labour cost

Now, if some of these ingredients are already portioned and packed by the vendors selling inventory, then the labour cost can reduce linearly.

Assuming ingredients like oil, spices and sauces can be pre-packaged by vendor which amounts to 40-80% of ingredients in some recipes.

The amount of time reduces from 10 minutes to 2-6 minutes.

Assuming the assembly is automated using vending machine.

Then if it takes 1 hour for a person to load up the vending machine (capacity of 50 kits)
Or 1-2 minute per kit for automated assembly.

Total time to fulfil a meal kit using manual labour can be reduced to 3-8 minutes at maximum.

Please note, that these times taken are very conservative and have exponential room for improvement.

The cost of labour can be brought down to 50 cents to 1.25 dollars.

 

Variables -- Per hour cost of labour = c (in dollars)

Labour cost = L ($/kit)

Number of ingredients to portion = n

Average time to pack an ingredient = p (in seconds)

Average time to assemble an ingredient in kit = a (in seconds)

L= c x n x (p+a) / 3600

Using the above equation, one can effectively calculate and maintain the labour cost to a minimum

Meal kits when produced in capacity of upto 500 is done best using manual labour for portioning and packing. We recommend the use of automated dispensing and assembly if above 500 at one location. Our stronger recommendation is to divide the location in 2 and reduce the distance, making it a more sustainable, financially and environmentally, instead of putting expense in infrastructure.

Written by Rishi