Meal Kits are a rather recent phenomenon originating in Europe around 2008 and taking root in the US consumption basket around 2012. Meal Kits are often understood as a subscription-based service (more on this later!) where a company sends customers pre-portioned and sometimes partially prepared food ingredients and recipes to prepare homecooked meals at a pre-determined schedule. In a little over a decade, the Meal Kit has come a long way and in the COVID-19 world we live in today, the Meal Kit seems to be a one stop solution for virtually all players across the entire F&B ecosystem, including retailers, e-tailers, CPG/ FMCG brand owners, restaurants, QSRs and even pubs and bars to get themselves out of this pandemic logjam and maximize the opportunities in the current scenario.
According to Industry reports, there were over 150+ meal kit brands in USA alone and the Meal Kit market was estimated to be around US$ 2.2 billion a couple of years back. However, the subscription model of Meal Kits has possibly also prevented its acceptance into being a mainstream item in the Grocery basket. There is immeasurable research on the Meal-Kit subscription stress that consumers have had to go through and the accumulating packs in their refrigerators hindering rapid acceptance. Maybe allowing the consumers the option to pick the kit at the time of their choice is probably more conducive to drive trials and acceptance.
Meal kits hit the sweet spot with consumers who don’t have time to shop for groceries or don’t want to order from foodservice and still want the satisfaction of having cooked at home! With meal kits, pre-portioned ingredients with easy-to-follow recipes are delivered straight to the doorstep. Websites feature high quality images of foods with flavour profiles of all kinds, and allow for adjustable delivery times whenever need be. Meal kit delivery services have exploded over the past few years, bridging the space between home-cooked meals and takeaways. The main point is to make cooking easier, faster and more accessible. Further, the meal kit promise of having diverse, authentic recipes and ingredients from across world cuisines at the doorstep added to the appeal.
Plus, for consumers with limited fridge and pantry space, having exotic spices and ingredients delivered in the exact (small , pre-portioned) amounts needed is incredibly appealing. Normally, if I wanted to try a new recipe, I would need to buy entire spice jars, identify specialised stores, etc. These items also inevitably go bad with the passage of time due to the limited shelf life and thus has limited use and high wastage.
The challenge for fresh Meal Kits has always been to maintain a fresh supply chain with limited shelf life and the ability to reach the consumers’ consideration set before its expiry date. Further, the ability to balance high quality ingredients with the price tag that the consumers can stomach also poses a tremendous challenge.
As families cook at home and cut back on grocery runs and restaurant meals, existing meal-kit brands and newcomers entering the fray are finding new avenues opening up. Existing Meal kits in USA, Europe etc. which were seeing faltering sales are now are making a comeback. People stuck at home because of the coronavirus pandemic are cooking more. Some are avoiding supermarkets. That dynamic is juicing up demand for the packs of pre-portioned fresh ingredients, reversing a period of slower growth for the decade-old industry that was seeming like a fad.
Meal kit delivery services are reinventing the Lunch & Dinner ritual particularly now in the lockdown era, in a very good positive way and it turns out, it’s a pretty healthy affair with the whole family involved at mealtimes. Also, as customers see Fresh Meal Kits as healthy & convenient, it is opening new consumers into its fold.
The India Perspective
Coming back home to the scenario in India, we are also seeing a resurgence of consumer acceptance in the Meal Kit space post the COVID lockdown with an inherent fear of ordering from outside and with many restaurants being shut by and large.
Taking a step back, India has had a culture of “semi or partial meal kits” since time immemorial. We have always had the local vegetable vendors in various regions selling say a Undhiyo vegetable mix amongst Gujrati neighbourhoods or say an Avial vegetable mix in South Indian neighbourhoods. This provided a step up convenience by providing the right mix and quantity of seasonal vegetables plus cut in the appropriate form. This then graduated to locally branded packaging available in the chill or frozen shelves.
In the packaged food category, Maggi Noodles would have been a pioneer of sorts in the primitive Meal Kit business. Providing easy to cook Noodles with a Tastemaker and letting the creativity play at home with addition of Vegetables, Eggs etc allowing a million combinations at play. This concept has now been extended into formats like pasta.
Haldiram also with their Bhel Puri Kit gave an opportunity to make one of India’s most popular street snack at home. They provided a mix of farsaan, set of Chutneys and asking the customers to add fresh ingredients / garnishing like chopped onions / tomatoes / coriander leaves etc. Noodles and Bhel Puri kits are ambient products, giving it shelf life and thus the ability to get distributed far and wide and reach every nook & corner of the country and abroad.
However, this still is an incomplete solution being provided to consumers at large. Which leads us to the next logical extension of providing a complete Meal Kit ie providing ALL the ingredients in pre-portioned forms required to make the set of dishes. We can thus look at Meal Kit opportunities as a continuum:
Now in a COVID world, people are by and large stuck at home, and are forced to eat at home. Though deliveries of restaurant food have been allowed in some geographies by the Government, yet still there is a fear factor lurking in the background. With family meals now coming back in fashion (or even out of necessity!) it provides a huge opportunity for Brands, Retailers etc to ride on this trend.
We already see a lot of action on this front
The first to kick off are the Restaurants which have been badly affected due to complete stoppage of Dine-In customers. They thus have started converting their main signature items into a Meal Kit and providing the opportunity to the consumers to make it / assemble it at home.
Bars, Pubs & cafes have seized this opportunity and have started pioneering DIY beverage kits. For brands like SOCIAL, have put out kits of their signature cocktails and letting the consumer add the alcohol at their homes and are essentially trying to recreate the experience what they would otherwise have got at the restaurant.
Not to be left behind, we also now see a plethora of Dessert options coming our way both from Branded players and also Restaurant / Parlour brands ranging from DIY Cake mix kits to Gourmet Chocolate kits to an Ice Cream Sundae Kit.
In the Fresh Meal Kit, we see yet another serious player enter the Meal Kit space with Master Chef Sanjeev Kapoor’s KitFresh brand taking ‘prime’ space in the Amazon India Food network. Signature recipes from Chef Kapoor’s Khazaana, entire recipe pre-portioned and manufactured in a FS22000 approved plant, in fresh form with limited shelf life.
In the Ready to eat / Heat & Eat space, the FMCG / CPG space we see action from existing Ready to Eat brands who are either bundling their existing individual items into a combination meal and marketing the same or putting out meal combination packs. This we can see either in Ambient or Frozen format.
Thus as part of the COVID strategy of various players, from FMCG / CPG companies to Startups to Restaurants & Bars, Retailers & E tailers, we will now witness many more options of meal kits across the spectrum in Ambient, Chilled & Frozen formats. It’s clearly the best of times for the Meal Kits business.