Meal kit growth remains strong in 2018, but it’s expected to slow in the coming years, according to a new study.
In the third edition of its “Meat Kits: Trend and Opportunities in the U.S.” report, Rockville, Maryland-based Packaged Facts reports that meal kit sales are expected to grow by 22 percent by the end of 2018, to $3.1 billion.
But growth is expected to steadily decline from double-digit gains over the next few years, eventually reaching single-digit gains by 2023.
Packaged Facts expects the market for subscription meal kit delivery services to mature rapidly as other methods of meal kit sales become available and even preferred, such as one-time online orders from a meal kit website or app, online orders from a grocery store website or app and instore sales.
As a result, future growth in the market will require industry leaders to continue pivoting and adjusting their business models to retain current customers and reach new clientele, according to the firm. Long-term, Packaged Facts believes that as more traditional stores offer meal kits as a product rather than as a service, the market will stabilize and become similar to other convenience grocery items that sell for a premium, such as pre-cut fresh produce that is ready-to-eat.
“The meal kit market is highly dynamic and prone to fluctuations, with the top meal kit providers falling in and out of favor since their introduction in the past few years,” says David Sprinkle, research director for Packaged Facts. “Further complicating things, market expansion is expected to be much more reliant on alternative purchase venues than the traditional subscription delivery model due in part to the convenience and flexibility of online shopping.”