KANSAS CITY - At the beginning of 2020, meal kits were not growing at the supermarket level as industry experts had anticipated. Some retailers even began to pull rolled out meal kit programs, because they were not performing as well as hoped. But as 2020 ushered in change, the potential of meal kit programs lit up with a spark.
The 52 weeks leading up to Jan. 4, 2020, only saw a 0.6% growth of meal kit sales at the retail level, according to data released by Nielsen. Fast forward another 52 weeks to Jan. 2, 2021, and the meal kit category grew by 18.7%, bringing in nearly $132 million more dollars in 2020 than the industry saw in 2019.
“While the pandemic has increased interest in meal kit offerings, it is important to distinguish that this is not the first meal kit rollout at retail,” noted Andrew Moberly, director of category solutions for Stamford, Conn.-based private brand innovation company Daymon. “In the past, meal kits did not meet sales expectations, with many retailers removing these offerings from their portfolios; this could be attributed to the lack of variety, not clearly understanding the needs of the consumer or lack of promotion across marketing channels.”
To avoid making the same mistake twice, Moberly suggested that retailers consider a variety of different tactics to reach today’s changing consumer.
The pandemic has resulted in the need for grocers to reach a larger range of consumers with meal kits. Previously, the target audience for meal kits was ages 34-44 with a household income over $100,000. But the pandemic has led to all ages and incomes of consumers cooking more from home and seeking out inspiration and assistance.
“With 60% of consumers expected to eat at home more this year, it is important for retailers to provide meal solutions for a range of consumers,” Moberly said, “from busy families looking for no-prep meals to single households looking to dip their toes into the cooking experience.”
That translates to three meal kit categories: prepackaged ready-to-eat, pre-prepped kits that require some cooking, and kits that are customizable to fit dietary needs and preferences.
Moberly pointed out that retailers can help ensure the success of their meal kits by using clear messaging that educates shoppers on the types of kits and meal solutions available to them.
“In-store merchandising should also be easily accessible, visually appealing and clearly share the benefits of the meal kits and the types of kits available,” Moberly said. “Additionally, meal kits should be easy to find on the e-commerce platform with clear details on what’s included and how many people each kit serves.”
Answering what’s for dinner
Almost a year into the pandemic, what once felt like a new and creative way to feed the family is feeling more like a chore again to many consumers. A survey by meal delivery service Sun Basket found that 55% of Americans are feeling cooking fatigue, yet 60% of consumers plan to continue eating most of their meals in the home.
Through meal kits programs, supermarket retailers have an opportunity to help customers answer the tiring question of ‘what’s for dinner?’
“We know that many of our customers are time-starved right now, and they are balancing very hectic and unpredictable schedules with new and different responsibilities,” said Stephanie Golaszewski, senior brand manager for Keasbey, NJ-based Wakefern Food Corp. “Our shoppers are scrambling to figure out the best way to get a meal on the table, quickly, easily, and at the best possible value.”
That’s why the parent company of Shoprite launched Fresh to Table at select ShopRite stores. With Shoprite’s Fresh to Table program shoppers can find several meal solution formats: prep-and-eat, heat-eat and grab-and-eat. The meal kits are housed in cases in the front of the store so shoppers can easily get what they need on the spot.
Within the Fresh to Table cases Shoprite also offers the One Stop Dinner Shop where the retailer houses main ingredients—usually about five total—from that week’s three featured recipes that are merchandised together in one area.
For instance, if one of that week’s recipes is Chicken Saltimbocca, customers could expect to see packaged chicken breast, prosciutto, fresh mozzarella, basil, and the corresponding or suggested side for that recipe. Plus, the case offers an alternate protein for customers to choose from.
“This seamless integration allows our customers to very quickly, easily, and conveniently come in, get everything they need for that recipe, hit the dedicated self-checkout, and leave the store,” said Golaszewski. “We’re providing a convenience factor without sacrificing quality and taste, with the value that ShopRite offers to its customers every day.”
A flexible meal kit experience
Unlike subscription-based meal kits that have to be planned out weeks in advance, supermarket retailers can provide customers with a meal kit program that offers more choice and flexibility.
“Many customers find an in-store offering appealing for their first meal kit purchase, because they can try a single meal without needing to commit to a subscription online,” said Scott Payne, vice president of retail of Chicago-based Home Chef, a Kroger-owned meal kit service. “There is also more flexibility to make an impulse purchase, buy as many or as few units as you want, and purchase as part of your normal grocery shopping trip.”
Having meal kits available instore also takes away the surprise factor of exactly what ingredients a customer will receive in their kit. With subscriptions, customers don’t get a chance to view the produce or proteins until they arrive at the consumer’s doorstep. Instore, the shopper gets to see exactly what they’re taking home to make a meal with.
There’s also the fact that everything needed to make almost any meal is right there in the store, leaving the possibilities for meal kits almost unlimited. And, if a customer wants to substitute one ingredient for another, it’s a pretty easy swap, noted Golaszewski.
“I believe that we will always win on variety and value,” she said. “Compared to a meal kit that is subscriber-based and sent through the mail, we can always provide a larger assortment of foods. And of course, there’s something to be said for picking out your produce, seeing its quality as it goes into your cart.
Picking the right meal kit program
When it comes to picking the right meal kit program, Payne suggests retailers take three things into consideration:
- Ensuring the store’s customer base aligns with the target demographic for meal kits - The typical meal kit shopper values the culinary experience and convenience aspects of the meal, and tends to be slightly more affluent than the average shopper. For grocers with a value proposition, it may be challenging to find a product-market fit for a fresh meal kit.
- Profitability - As a fresh item, stores must balance keeping available inventory on hand, while also making sure to keep food waste in check. An added challenge for meal kits specifically is that the complexity of the product is higher than other fresh foods, meaning that quantities must be determined further in advance.
- Rotation frequency - Online meal kit offerings tend to offer new meals each week, but this may not always align with how grocery store operations are designed. When designing a program, it is important to consider customer preferences (variety vs. familiar mainstays) and operational considerations to determine whether to have a frequently rotating menu or a more static one.
With meal kits, shoppers are usually looking to be inspired. Meal kit shoppers usually aren’t going to be very excited about picking up something they can easily make at home. When choosing a menu that will resonate with consumers, Payne suggested a test and learn approach.
“Our best feedback comes straight from our customers,” he said. “So we’re not afraid to launch something that isn’t 100% perfect, since we know we can quickly adapt as needed.”