Meal Kit Delivery Market
Two best practices to market meal kits include leveraging influencer marketing due to the demographics of the cohort more likely to purchase meal kits — millennials and generation X; and incorporating data into every marketing strategy. The research team also found that the top three meal kits players in the United States based on a 2018 study were HelloFresh, Blue Apron, and Home Chef. Additional details on the top three players have been added to the attached spreadsheet, while details on the best practices have been provided below.
Leveraging Influencer Marketing
- Millennials and generation X "are 321% more likely to purchase meal kits than older generations."
- These two generations have online habits that make influencer marketing an important part of a meal kit provider's marketing strategy. For example, 85% of millennials own a smartphone, while 64% of this same cohort believe that social media is an effective channel for brands to reach their customers.
- In light of this, many brands have partnered with influencers. However, there are best practices that help brands cut through the noise. Three meal kit companies that are leveraging influencer marketing and doing it well includes Blue Apron, Hello Fresh, and Purple Carrot.
- HelloFresh separates itself from the pack by doing the following:
- The influencers wear Hello Fresh apron, which puts the brand front and center of the conversation and allowing for instant brand recognition.
- Rather than focus on the food like other providers, Hello Fresh places emphasis on the people doing the cooking.
- HelloFresh presents "consumers with a diversified offering, catering to various tastes by offering meat, seafood, vegetarian, and other meal options. "
- Purple Carrot distinguishes itself from the rest by doing the following:
- Partnering with very big influencers such as Tom Brady and Michael Phelps who are vegans to market its vegan fare and ‘performance meals.’
- Rarely posting pictures of the influencers, but rather focusing on the food, thereby, "drawing on the psychological notion of digital hunger to attract customers."
- Lastly, Purple Carrot does not try to appeal to everybody, rather, it focuses on plant-based meals, which allows them to cater to and attract a specific customer segment.
- Blue Apron separates itself from the pack by doing the following:
- Placing an emphasis on the cooking experience and not just the final result (picture of the food).
- Blue Apron gives each influencer unique promo codes, which allows it to track the performance of each influencer.
- Lastly, the company launched an influencer-led podcast titled 'Why We Eat What We Eat.' The podcast delves into the "anthropology behind some of America’s biggest food trends."
- Consequently, these three brands enjoy the biggest share of influencer voice on social media — Hello Fresh (55%), Purple Carrot (17%), and Blue Apron (13%). Blue Apron also enjoys three times more engagement than the average engagement in the meal kit industry.
- The marketing leads of meal kit companies such as Hungryroot, Freshly, and HelloFresh all talk about creating flexible and personalized marketing strategies by leveraging customer data in smart ways to create "targeted marketing strategies based on dietary preferences and geographic locations of their current customers, in order to acquire new ones."
- The use of data will help balance advertising yields across important channels. For example, Hungryroot "currently uses Facebook and Instagram ads, paid search and email marketing as its primary channels."
- Adam Gassman, senior director of growth marketing at Freshly, summarizes his company's use of data as "The goal is to identify a relatable customer pain point, then message the brand as the solution to making that problem less burdensome."
- He further adds that "We live in the numbers all day long and push where we see opportunities and pull back where we see inefficiencies. We never let a bad ad or campaign run too long, but always give a new test a set budget to gauge its efficiency and ability to scale."
- With this, Freshly can continually optimize its campaigns and assess audience behavior. Consequently, Freshly has found out that "their attribution model needs to be as dynamic as their customers’ online patterns."
- In summary, meal kit companies should ensure that their digital marketing strategies are based on social, demographic and geographic information.
Meal Kit Top Three Players
- According to a Market Force Information study, the top three meal kit players in the United States in 2018 were HelloFresh (38.8%), Blue Apron (34.7%), and Home Chef (9.3%). The requested information on the three companies have been added to the attached spreadsheet. A few highlights of the research team's findings have also been provided below.
- HelloFresh had revenues of $1.143 billion (converted from Euros) in the United States in 2019 and had 1.78 million active customers.
- In 2019, HelloFresh Spent $308.25 million (converted from Euros) on marketing.
- In the past year, HelloFresh has announced partnerships with two influential figures. In August 2019, the company announced a multi-phase collaboration with actor and entrepreneur, Jessica Alba, while January 2020, the company also announced another partnership with Lea Michele, actress, singer, and author.
- Blue Apron recorded revenues of $453.9 million in 2019 after its customer base shrunk to 351,000.
- In 2019, Blue Apron spent $48.33 million on marketing, a significant drop from its 2018 marketing spend, which was $117.46 million.
- Blue Apron has also recently leveraged partnerships as part of its marketing strategy. In October 2019, it partnered with award-winning Italian chef, Christian Petroni to "create a new line of bold, simple, and indulgent recipes exclusively for Blue Apron, bringing classic Italian-American comfort food to home cooks across the country." Blue Apron also partnered with the American Diabetes Association (ADA) to offer recipes for a healthy lifestyle.
- Home Chef recorded revenues of $250 million in 2018. While data on its number of customers is not available, the company says it processes 3.5 million meal kits per month.
- The company spent $35 million on marketing between the first quarter of 2018 to the second quarter of 2019.
- In late 2018, Home Chef launched a national campaign titled 'Home Chef Heroes.' The overall premise of the campaign was to highlight how everyday people with different levels of cooking skills use Home Chef to create home-made meals.