Perishable Meal Kit Subscriptions

Part
01
of five
Part
01

Meal Kit Subscriptions By Location

We could not find any information from which to identify the top five to seven locations in the U.S. with the most subscribers to or deliveries of perishable meal kit delivery services, including ones that offer meat/poultry. A detailed explanation of our research process is provided in the Research Strategy section below. Since information about top locations could not be found, we provided the next-most-applicable statistics we found during our research pertaining to meats included in meal kits, location, consumer demographics, and top brands.

Meat

  • Of meal kits sold in-store in 2018, 87% included meat.
  • Of the meal kits sold in-store that included meat, 52% included beef, 17% included pork, and 16% included chicken.
  • Nielsen data from 2017 found that 91% of consumers who had purchased meal kits were "satisfied with the quality of the meat packaging" in their meal kits.

Location

  • Among people "who have tried a meal kit," 25% live in urban areas.
  • In 2018, 60% of people purchased meal kits exclusively online, 32% purchased exclusively in-store, and 8% purchased both in-store and online. A screenshot of that graph from Statista is also included in this Google Doc.
  • In Manhattan, Blue Apron held a 62% share of the meal kit market in 2016.
  • In Manhattan, Plated (which was acquired by Albertsons in 2017) held a 32% share of the meal kit market in 2016.

Consumer Demographics

  • Among meal kit customers, 32% come from households with high incomes.
  • Millennials account for 29% of meal kit customers.

Top Brands

  • In February 2018, HelloFresh was the most-popular brand for meal kits in the U.S., with a 28% share of the meal kit market.
  • In February 2018, Blue Apron was the second-most-popular brand for meal kits in the U.S., with a 22% share of the meal kit market.

Research Strategy

We conducted very thorough research in looking for information about the top locations in the U.S. that have the most subscribers to or deliveries of perishable meal kits. However, we were unable to find any such information. In looking for that information, we implemented three research approaches. First, we checked to see what data was available through the statistics source Statista, which often publishes geographical information about a range of consumer products/services in the U.S. and elsewhere. From our search of the Statista database, there was a lot of data about meal kits in the U.S. generally, but the only information we found pertaining to geographic location were the data points about market share in Manhattan for a few meal kit companies and the breakdown provided above about online versus in-store purchases of meal kits. That information was not sufficient to identify Manhattan as a top location in the U.S. for meal kit subscribers or deliveries because it only focused on the companies' market shares in New York City.

For our second research approach, we conducted broad, thorough searches for any articles that might have been published about top cities with the most meal kit subscribers or deliveries. Despite numerous searches for any such articles, we didn't find a single article that provided that information. Instead, most of the articles we found were about the popularity of meal kits throughout the U.S. as a whole and thus state- or city-specific data wasn't provided therein. As a third research approach, we reviewed annual/earnings reports from two meal kit companies (Blue Apron and HelloFresh) to see if they mentioned U.S. cities or states where sales were strong. However, the only geographical data included in those reports pertained to sales in the U.S. as a whole and that data was not further broken down by location.

Since none of those three research approaches yielded the information we were looking for about top locations in the U.S. with strong meal kit sales or customer bases, we provided the next-closest data we found during our research, in order to provide as much information as we possibly could pertaining to this topic even though it's tangentially related.
Part
02
of five
Part
02

Meal Kit Delivery: Blue Apron

Blue Apron generated $667.6 million in annual revenue in 2018 and the company's pricing model ranges from $47.95 to $119.84 depending on which of its three meal kits and how many meals per week are selected. Blue Apron recently received an award for innovation in sustainable-packaging design and its business processes commence with assessing its suppliers' food safety measures and end with the types of refrigeration used in its delivery boxes for meal kits.

Annual Revenue

  • The most-recent, published annual revenue for Blue Apron is that in 2018, the company's annual revenue totaled $667.6 million.
  • Outside of annual revenue, the most-recent revenue data about the company is the financial results it published from the third quarter of 2019. In that third quarter, Blue Apron's revenue totaled $99.5 million, which marked both a 17% decrease compared to the second quarter 2019 (which was largely the result of seasonal trends) and a 34% decrease compared to third quarter 2018 (which "reflect[ed] the company’s deliberate reduction in marketing spend while focusing on marketing efficiency and targeting high affinity consumers").

Pricing Model

  • Blue Apron's pricing model is based on the type of meal kit selected and the number of meal kits received per week.
  • The company offers three meal kits, which are called Signature, Signature for 4, and Vegetarian.
  • Blue Apron allows customers to "skip any delivery until the order is processed." Customers' deliveries can be managed via their accounts.

1. Signature

  • The Signature meal kit serves two people and there's an option to receive two or three meal kits per week.
  • The total cost for two meal kits per week is $47.95 per week, which is broken down to $9.99 per serving and a $7.99 shipping fee.
  • The total cost for three meal kits per week is $59.94 per week, which is broken down to $9.99 per serving and free shipping.

2. Signature for 4

  • The Signature for 4 meal kit serves four people and there's an option to receive two, three, or four meal kits per week.
  • The total cost for two meal kits per week is $71.92 per week, which is broken down to $8.99 per serving and free shipping.
  • The total cost for three meal kits per week is $95.88 per week, which is broken down to $7.99 per serving and free shipping.
  • The total cost for four meal kits per week is $119.84 per week, which is broken down to $7.49 per serving and free shipping.

3. Vegetarian

  • The Vegetarian meal kit serves two people and there's an option to receive two or three meal kits per week.
  • The total cost for two meal kits per week is $47.95 per week, which is broken down to $9.99 per serving plus a $7.99 shipping fee.
  • The total cost for three meal kits per week is $59.94 per week, which is broken down to $9.99 per serving and free shipping.

Innovations

  • In August 2019, Blue Apron added Beyond Meat's plant-based meats to the meal options included in its Signature meal kit.
  • In 2019, the Sustainable Packaging Coalition awarded Blue Apron with its "2019 Innovation in Design Optimization Award."
  • Blue Apron's packaging innovations that led to the company receiving the aforementioned award were its (1) recyclable-material usage, (2) "[u]se of post-consumer recycled content ," (3) seasonal optimization of the materials used for its ice packs and boxes, (4) implementation of an ice pack that's drain safe, (5) compostable-tray design used for its retail and on-demand products, and (6) the fact that Blue Apron was "the first meal kit company to join the How2Recycle program."
  • Blue Apron launched an innovation called Blue Apron Knick Knacks on February 6, 2019, which the company described as "its most flexible culinary innovation to date."
  • The company described "Blue Apron Knick Knacks . . . [as] a new line of recipe solutions that give consumers the flexibility to combine the protein and produce of their choice with specialty, pre-portioned, refrigerated ingredients and step-by-step recipes to enjoy a delicious meal for two."
  • A Forbes article from August 2018 stated that Blue Apron recently expanded the options it provides to customers by starting to sell its meal kits at Costco, increasing the selection of meal choices so that a wider range of taste preferences can be accommodated, and creating a platform for delivery.
  • Blue Apron highlights the following statement about its role in innovation in the meal-kit space: "Blue Apron is reimagining the way that food is produced, distributed, and consumed, and as a result, building a better food system that benefits consumers, food producers, and the planet. The company has developed an integrated ecosystem that enables the company to work in a direct, coordinated manner with farmers and artisans to deliver high-quality products to customers nationwide at compelling values." As such, the company "work[s] directly with artisanal purveyors and hundreds of family-run farms that support sustainable practices."

Business Process

1. Suppliers

  • Blue Apron's efforts to keep food fresh start with its suppliers, as the company makes them participate in a thorough assessment regarding food safety, to ensure alignment in requirements about food safety between Blue Apron and those suppliers.

2. Fulfillment Centers

  • The fulfillment centers operated by Blue Apron are FDA-regulated and regulated by other government agencies.
  • Every Blue Apron fulfillment center has a rigorous program regarding food safety to maintain ingredient quality and safety.

3. Employees

  • All employees at Blue Apron "who handles food in any manner undergo[] our comprehensive food safety training program, in compliance with the . . . [FDA's] Good Manufacturing Practice (GMP) requirements."

4. Delivery Boxes

  • The boxes that Blue Apron delivers its meal kits in are refrigerated and thus include insulated liners and ice packs to ensure the freshness of ingredients throughout transit and the actual delivery day.
  • Blue Apron considers several factors in determining the types and extent of refrigeration needed in the meal kit boxes it delivers to maintain proper temperatures (per guidance from the USDA regarding "safe temperature zones"), including weather conditions, the season, delivery destination, and ingredients.
  • Blue Apron is highly attentive to ensuring that the proper temperatures are maintained in its refrigerated delivery boxes to ensure ingredient freshness. To that end, Blue Apron has a team of experts who specialize in food safety and packaging. Said team continually assesses the packaging used by Blue Apron to ensure ingredient freshness and changes are implemented when necessary.

Research Strategy

We began our research by looking for Blue Apron's most-recent annual revenue, which we found through the financial source Market Watch. Next, we focused on Blue Apron's pricing model and we found that information on the company's website. After doing so, we searched for Blue Apron's recent innovations in the meal-kit-delivery space in articles from sources such as Forbes and through the company's press releases published on its website. Lastly, we found information about Blue Apron's business process for food freshness on the company's website, which directly provided those details. All the information we found about food-freshness measures pertained to food generally and was not further specified for meats versus other ingredients.
Part
03
of five
Part
03

Meal Kit Delivery: Hello Fresh

HelloFresh generated approximately $1.42 billion in annual revenue in 2018 and the company's pricing ranges from $7.49 to $10.99 per serving depending on the number of meal kits per week and the number of servings per meal kit. A top innovation from HelloFresh is the launch of its own intelligent vending machines in Germany and its business processes are part of what it calls "a continuous cold supply chain."

Annual Revenue

  • HelloFresh's annual revenue in 2018 totaled approximately $1.42 billion (reported as $1.2792 billion EUR in the company's 2018 Annual Report).
  • Since it wasn't entirely clear in the Annual Report which currency its revenue was reported in due to an apparent omission of that information, we checked another source (Statista) which clarified that the amount stated in the Annual Report was EUR.
  • We converted the revenue value reported in EUR in the 2018 Annual Report to USD by using this currency calculator.
  • The most-recent financial data we found about HelloFresh was its financial results from third quarter 2019, during which the company generated revenue of approximately $490.7 million (reported as $440.6 million EUR by the company).
  • That third quarter revenue total marked a 45.8% increase from third quarter 2018.
  • We converted the third quarter revenue value reported in EUR to USD by using the same currency calculator as before.

Pricing Model

  • HelloFresh's pricing model is based on the number of meal kits per week and number of servings per meal kit, irrespective of the type of meal kit chosen (e.g. Veggie, all of which are listed below). As an example, two meal kits per week each with four servings under the Veggie plan is the same price as two meal kits per week with four servings under the Low Calorie plan.
  • The four types of HelloFresh meal kits are Meat & Veggies, Family Friendly, Veggie, and Low Calorie.
  • The options for number of servings offered per meal kit are two and four.
  • The options for the number of meal kits per week are listed as two, three, and four. However, the website also says that customers "can always customize your menu more and select from 20 delicious recipes each week."
  • For each meal kit delivered, HelloFresh charges a $6.99 shipping fee.
  • Two meal kits per week each with two servings costs $10.99 per serving.
  • Two meal kits per week each with four servings costs $8.99 per serving.
  • Three meal kits per week each with two servings costs $8.99 per serving.
  • Three meal kits per week each with four servings costs $7.49 per serving.
  • Four meal kits per week each with two servings costs $8.99 per serving.
  • Four meal kits per week each with four servings costs $7.49 per serving.

Innovations

1. Intelligent Vending Machines

  • Perhaps HelloFresh's most-unique innovation has involved creating its own "smart vending machines," which are present in Germany.
  • HelloFresh markets the vending machines to companies whose employees can purchase food from them while at work.
  • Meal kits, drinks, and snacks are available in the vending machines.
  • This link is to a demo on YouTube of how the HelloFresh vending machine works.

2. Data

  • A key part of HelloFresh's innovation in the meal-kit space involves its savvy approach to data, which it uses to personalize its offerings to customers based on their unique preferences and to conduct better forecasting.
  • HelloFresh uses Cloudera Data Warehouse, which compiles and analyzes over "15 terabytes of data" about customers.
  • HelloFresh's strong use of data has been immensely successful, as its forecasts for order volume have improved, customer retention has improved, and margins have increased.

3. Organic

  • Another innovation in the meal-kit space from HelloFresh is that in 2018, it ventured into the organic sector by acquiring a company called Green Chef, which was regarded "as the only true organic meal kit company."
  • Through the acquisition, HelloFresh was able to increase its range of offerings to include customers who have various dietary restrictions such as gluten free, keto, or vegan.
  • The acquisition was expected to be financially significant for HelloFresh in generating quarterly revenue of $15 million.

4. Sustainable Packaging

  • In June 2019, HelloFresh expanded its usage of Tetra Recart sustainable packaging (that it described as "innovative" and has used since 2017 in the U.S.) to the European countries that it operates in.
  • Tetra Recart packaging reduces carbon footprint by 80%, occupies less space, and weighs less than other types of packaging.

5. Plant-Based Meat

  • In August 2019, Beyond Meat's Beyond Burger (plant-based) was added to HelloFresh's menu.

6. Shift to Retail

  • In June 2018, HelloFresh launched in retail by selling its meal kits "at 581 stores under the Ahold Delhaize U.S.A. brand’s Giant Food (Landover) and Stop & Shop."
  • In 2018, HelloFresh had a presence in retail stores in two countries.
  • Another part of the company's shift to retail involved "revitalizing the grab and go aisles for smaller format retail chains."

7. Product Innovation

  • HelloFresh has also innovated its product offerings by successfully launching add-ons like snacks, double-portions, seasonal boxes (e.g. holiday), and premium meals.

Business Process

  • HelloFresh keeps meat fresh from the supplier stage to distribution through what it terms "a continuous cold supply chain."
  • The company's statement about the aforementioned supply chain is as follows: "We've worked with our partners to develop a continuous cold chain supply — all our courier trucks are refrigerated so your box remains chilled right up until delivery. All meats, dairy and chilled produce are packed in your plant-based, insulated cool pouch, fit with 1-2 heavy duty ice bricks so ensure your ingredients are kept cold for up to 8 hours once they're delivered to you."
  • HelloFresh keeps meat fresh when delivering meal kits to customers by keeping it "on ice at the bottom of the box."
  • Another way that HelloFresh keeps food fresh is by usually "go[ing] right to the [food] producers, pack[ing the items] in-house and ship[ping] to . . . customers" from those very locations. As added benefits of that approach, both transit time and food waste are reduced.
  • The boxes in which HelloFresh packages its meal kits for delivery to customers are refrigerated via gel packs, insulating liners, and ice.
  • The packaging that HelloFresh uses to keep its food fresh for delivery to customers varies by season, in order to account for outdoor temperature changes since customers won't always be home to immediately refrigerate their items.
  • In creating its recipes, HelloFresh specifically chooses "ingredients that can maintain prime condition for a week or more after delivery" to ensure freshness of its food.

Research Strategy

We began our research by looking for HelloFresh's most-recent annual revenue, which we found in its 2018 Annual Report. Next, we focused on HelloFresh’s pricing model and we found that information on the company's website. After doing so, we searched for the company's recent innovations in the meal-kit-delivery space in articles from sources such as Business Insider and in the company’s 2018 Annual Report. Lastly, we found information about HelloFresh's business process for food freshness on the company's website and in customer reviews describing the packaging they received their food in.
Part
04
of five
Part
04

Meal Kit Delivery: Just Add Cooking

Just Add Cooking ceased business operations in November 2018. Due to that, we focused this research instead on one of the other key players in the meal kit market, Gobble.

Annual Revenue

  • Furthermore, in October 2017, the company "secure[d] $15 million in Series B financing."

Pricing Model

  • Gobble's pricing model is based on the type of plan selected (Classic Dinner Plan, Lean & Clean Dinner Plan, or Gobble Lunch Box), the number of meal kits selected per week (minimum of two and no maximum), and the number of servings per meal kit (two or four).
  • Irrespective of the type of meal kit and number of servings chosen, Gobble charges a $6.99 shipping fee per delivery. The one exception to that delivery fee is that during their first week, new customers receive free shipping.
  • Two meal kits with two servings each per week is the minimum order that Gobble requires. The per-meal price charged by Gobble for that minimum order is $55.96 per week ($13.99 per serving). There is no maximum order limit.
  • Pricing for Gobble Lunch Box "[s]tarts at $7.98 per lunch."
  • Gobble provides customers with "allowances to skip weeks if . . . [needed and allows them to] cancel the subscription" anytime.
  • Currently, Gobble is offering a $30 discount for new customers on their first orders, in addition to receiving free shipping for their first week.

Innovations

1. Gobble Lunch Box

  • Gobble's main innovation appears to be its line of meal kits for healthy, weekday lunches for professionals called Gobble Lunch Box (formerly called Sunday Meal Prep).
  • With Gobble Lunch Box, "[c]ustomers will receive a weekly delivery filled with the freshly prepped ingredients for easy, healthy lunches. The entire box is designed to batch cook in under 90 minutes over the weekend, leaving the fridge stocked with six grab-and-go lunches that are ready for the busy work week. Each box includes three personalized lunch kits which amount to six individual lunches."
  • Customer feedback about all the hassles that many professionals experience in preparing their lunches for the work week on Sundays ("planning, shopping, preparing, cooking and packaging") inspired Gobble's CEO, Ooshma Garg, to launch a solution to that problem.
  • Gobble Lunch Box was "[c]losely co-developed in home with a small group of Gobble customers."

2. Recipe Tech

  • Another innovation from Gobble in the meal-kit space involves the technology it uses in creating recipes.
  • Gobble's "culinary R&D team applies 'taste mapping technology' pulled from customer affinity algorithms to inform them what types of foods are best reviewed by different customer segments. That helps them develop custom menus based on unique taste preferences and dietary needs, as well as regional trends."
  • Furthermore, all meals that Gobble sends to customers can be cooked in 15 minutes, which is a major differentiator for the company.

3. Vertical Integration

  • Gobble has also innovated in the meal-kit space through its vertical integration (including both manufacturing and distribution) as a company, which differentiates it from "traditional meal kit or CPG companies."
  • Gobble's "vertical integration of recipe generation, food sourcing, scaled meal prep, distribution and data analysis allows Gobble to stand out from their competitors."

Business Process

  • In June 2019, a Gobble customer described the packaging that Gobble used for his order, which specifically included two chicken meals. He stated that "[e]ach meal comes in a plastic bag, then each ingredient comes in a smaller bag or container. The meals come surrounded by Mylar bubble wrap and multiple packets of 'Nordic Ice.'" A photo of that packaging used for the poultry and other items is also included in the article.
  • Gobble packages the food that it sends to customers so that it will stay "fresh for up to 72 hours in transit."
  • To achieve that, Gobble includes ice packs in the box and also adds insulation to the box.
  • Gobble accounts for different climates and seasons in determining the extent of refrigeration needed in its meal kit boxes.
  • Gobble states that it ensures that the food customers receive will "always arrive fresh and cool to the touch."
  • Gobble's temperature-sensitive food is "packed at the bottom of the box [and] surrounded with ice."
  • Since time-saving is one of Gobble's differentiators, many of the ingredients it sends to customers have been partially cooked. To ensure freshness, Gobble "immediately vacuum seal[s those items] after cooking to ensure that they retain their freshness, taste and quality."

Research Strategy

As was mentioned in the introduction, the meal-kit company Just Add Cooking closed in November 2018. For that reason, we provided information about another meal-kit company (Gobble) from the list of meal kit companies identified during the Strategy phase of our research. To find the requested information about Gobble, we started by looking for its most-recent annual revenue. Since Gobble is a privately owned company, annual revenue information was not publicly disclosed by the company. However, we found an estimate from Forbes about the company’s annual revenue. Next, we focused on Gobble’s pricing model and we found that information on the company's website. After doing so, we searched for the company's recent innovations in the meal-kit-delivery space in articles from sources such as Forbes. Lastly, we found information about Gobble's business process for food freshness on the company's website and in customer reviews describing the packaging they received their food in.
Part
05
of five
Part
05

Meal Kit Delivery: Marley Spoon

Marley Spoon generated approximately $63.5 million in revenue in 2018 and the company's pricing ranges from $49.99 to $120.83 per week depending on the number of meals delivered each week and the number of servings per meal kit. One of Marley Spoon's innovations was the launch of its lower-price Dinnerly meal kit and a key part of its business process is that delivery of fresh ingredients occurs "within just two days of receiving it from farmers and suppliers."

Annual Revenue

  • Marley Spoon's annual revenue in 2018 totaled approximately $63.5 million USD (reported by the company as $91.988 million EUR in its 2018 Annual Report).
  • Since the company reported its annual revenue in Euros, we used this currency calculator to convert that amount to USD.
  • The reason we included a screenshot of the page in Marley Spoon's 2018 Annual Report on which revenue is reported is because the report was only available in PDF format.

Pricing Model

  • Marley Spoon's pricing model is based on the number of meals delivered each week (options are two, three, and four) and the number of servings per meal kit (options are two and four).
  • There is a shipping fee of $8.99 per delivery.
  • Customers have the option to skip delivery on any given week.

1. Pricing for Two-Serving Meal Kits

  • Two meal kits every week with two servings each costs $49.99 per week ($10.25 per serving).
  • Three meal kits every week with two servings each costs $62.93 per week ($8.99 per serving).
  • Four meal kits every week with two servings each costs $76.91 per week ($8.49 per serving).

2. Pricing for Four-Serving Meal Kits

Innovations

  • In March 2017, Marley Spoon innovated in the meal-kit space by launching its service on AmazonFresh. In commenting on that launch, the CEO of Marley Spoon stated the following: "We are setting a new standard for the meal kit industry by offering flexible delivery options, a variety of dishes to choose from and no meal plan service commitments via AmazonFresh."
  • Another innovation from Marley Spoon was the launch of a more-affordable meal kit option called Dinnerly. The reasons Marley Spoon launched Dinnerly were "to make meal-kits less price sensitive and widen the product category’s appeal."
  • Marley Spoon has innovated in the United States by partnering "with Martha Stewart under the Martha & Marley Spoon brand," which included an innovative collaboration on Thanksgiving dinner offerings.

Business Process

  • To keep meat fresh during delivery to customers, Marley Spoon packages meats "underneath a piece of cardboard with cold packs to keep them cool."
  • A Marley Spoon customer said in October 2019 that "[m]eats arrive defrosted with a slightly cool chill even though huge heavy chillers are included."
  • To keep food fresh, the company's commitment to customers is that delivery of fresh ingredients will occur "within just two days of receiving it from farmers and suppliers."
  • Data is a major part of Marley Spoon's efforts to keep food fresh from the supply through distribution phase, so that it can maintain standards for the quality and safety of food. As such, the company uses data tools called SafetyCulture Sensors and iAuditor to ensure food freshness, including digitized monitoring of storage temperatures.
  • An example of how the SafetyCulture Sensors helped Marley Spoon ensure food freshness was that when the door to one of Marley Spoon's cold rooms where food is stored was left partly open, the temperatures increased, but the sensors alerted the team who was then able to fix the problem without losing any food due to temperature.
  • Audits are regularly conducted by the team at Marley Spoon for the purposes of monitoring, tracking, and compliance with standards in the food industry.
  • For the delivery boxes in which it sends meal kits to customers, Marley Spoon uses both insulated liners and ice packs in order to maintain the right temperatures and keep food fresh.

Research Strategy

We began our research by looking for Marley Spoon's most-recent annual revenue, which we found in its 2018 Annual Report. Next, we focused on Marley Spoon’s pricing model and we found that information on the company's website. After doing so, we searched for the company's recent innovations in the meal-kit-delivery space in articles from sources such as TechCrunch and Grocery Dive. Lastly, we found information about Marley Spoon's business process for food freshness on the company's website and in reviews from customers who described the packaging of their food boxes.
Sources
Sources

From Part 03