Lower prices and more flexibility key to broadening meal kit market, says researcher

By Elaine Watson contact

- Last updated on GMT

Meal kits make life easier for busy people without the time, energy or inspiration to plan meals and shop for groceries, but they can be pricey
Meal kits make life easier for busy people without the time, energy or inspiration to plan meals and shop for groceries, but they can be pricey
High prices and the fear of being locked into a recurring subscription are the top two factors deterring Americans from embracing meal kit services, according to a new survey, which found that Millennials are the most receptive to the concept, but only if the price is right. 

Whether it’s audiobooks, shave clubs, beauty boxes or meal kits, Millennials are more likely to use subscription services, says market research firm Fluent, which surveyed a representative sample* of 1,319 Americans in late July.

It found that 24% of 18-34-year old respondents claimed to have subscribed to a meal kit delivery service vs 14% of those aged 35+, while 23% of 18-34 year olds surveyed said they had used a snack subscription service vs 12% of the over 35s.  

As for awareness of meal-kit services, it was reasonably high, especially among women, with 43% of women claiming to be aware of market leader Blue Apron compared with 25% of men.

Awareness of Meal Kit Subscription Services

Total US

Women

Men

Blue Apron

35%

43%

25%

HelloFresh

18%

24%

12%

Home Chef

17%

19%

14%

Plated

10%

13%

7%

Green Chef

10%

10%

9%

Terra's Kitchen

5%

5%

5%

Sun Basket

5%

6%

4%

Purple Carrot

4%

4%

5%

None of the above

50%

43%

58%

 As for interest in meal kit subscriptions, it was far more modest, although significantly higher among Millennials, said Fluent.

How interested would you be in a meal-kit subscription where you are sent fresh, pre-portioned ingredients with step-by-step recipes to cook healthy and quick dinners at home, that come out to $9.95 per serving? You can select the number of servings per week.

Total US

Millennials

(18-34)

Non-Millennials (35+)

Extremely/very (NET)

11%

19%

8%

Somewhat interested

14%

18%

13%

Not interested

75%

64%

78%

 For those who did not​ express an interest in a meal-kit subscription service priced at $9.95 per serving, 34% cited price and 32% cited fear of being locked into a recurring subscription, while 29% agreed that it would “not work for my family​” or that “I don’t need cooking instructions.”

Main reasons for not being interested in a meal-kit subscription where you are sent fresh, pre-portioned ingredients with step-by-step recipes to cook healthy and quick dinners at home, that come out to $9.95 per serving.

Total US who are Not interested in a Meal Kit Subscription

Too expensive

34%

Don't want a recurring subscription

32%

Will not work for my family

29%

I don’t need cooking instructions

29%

Meal-kits are for those who cannot cook

15%

I don’t think I will like the recipes

12%

Hard to receive food deliveries at my home

11%

Other

27%

75% not interested in meal kits

So what’s the takeaway from all this? And is the fact that 75% of consumers are simply not interested in meal kits a pretty troubling statistic for players in this field?

Tanya Levina, research director at Fluent, noted that respondents were asked to rate a specific concept and price ($9.95/serving), and that enthusiasm levels changed when consumers were asked to rate a cheaper service.

“If the concept parameters are varied such as price and description of service flexibility​,” she pointed out, “we will see a different uptake. For example, when we asked the same question but with $4.95 per serving, 46% of millennials said they would be interested and 38% of respondents overall.”

Flexibility, price, focus

She added: “Subscription businesses have flourished when they have been able to take something people were buying anyway (such as shaving razors or pet food) and make the entire process easier and more cost effective for consumers. In order to become successful, meal-kit subscription services need to do just that - figure out a way to replace the current food supply chain in individual US households.

“Whether a particular household orders take-out a few times a week or cooks dinner from scratch, the meal-kit subscription that will eventually revolutionize how Americans eat will need to prove that its service is a worthy and cost effective alternative to pizza take-out or a home cooked meal. Currently, the meal-kit subscriptions appeal to a very specific demographic- higher income, not necessarily proficient cooks.

“However, in order to scale the business, the service needs to work for a much larger share of American households. There is an opportunity to segment potential customers and customize the messaging, ensuring that it resonates with each audience.”

So what might this look like? “For example,” ​said Levina, “29% of those who are not interested in meal-kit subscription services said they don’t need cooking instructions and another 15% said they think meal-kit subscriptions are for those who cannot cook.  For these households - focus the messaging on affordability, flexibility and quality ingredients.

Messaging

The fact that many people feel uncomfortable committing to a recurring subscription, she argued, merely “illustrates the need for making it very easy to customize the number of meals received each week, skipping days, weeks or months. Many meal-kit subscription services already offer some flexibility in skipping meals/weeks, but there is clearly an opportunity to make sure this flexibility is clearly communicated in marketing messaging.”

*Fluent’s study was conducted via an online survey in the US during July 21-27, 2017 among American adults (18+). Respondents were randomly selected and data were weighted to US Census 2010 population distribution.

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