In the same way the fast casual industry barely existed a generation ago, there is a new trend picking up like wildfire in the food space and it's fast casual made to go.
According to market research publisher Packaged Facts, meal kit delivery services generated close to $1.5 billion in sales in 2016. And as an industry, in the next five years it is projected to grow to a multi-billion dollar market.
So, what are meal kit delivery services? As the report defines it, these are "Companies that offer and deliver to consumer's doors (or arrange for delivery of) a box or bag of fresh ingredients for one or more meals, along with a step-by-step recipe with photos showing how to cook each meal at home. The everything-in-a-box kits promise convenience by eliminating the need to plan meals, find recipes, and shop for groceries. Ingredients are portioned in just the right quantities for the recipe, and sometimes even prepped (pre-cut, marinated, packaged with pre-cooked sauce components, etc.) to speed and ease consumers' time spent in the kitchen. Excluded from this report are services that deliver completely cooked heat-and-eat meals, and services that deliver frozen foods."
According to the Packaged Facts report, for example, "Meal kit delivery service startups have raised over $650 million in venture capital." And one of the leaders in the space, Blue Apron, has raised more than $193 million in equity funding.
Interestingly enough, however, the report also stated, "Although executives at Blue Apron, the largest meal kit marketer, claim to be making money on every meal, Packaged Facts believes that when sales are counterbalanced by the amount of funding raised by investors, no meal kit delivery service is yet profitable. Moreover, the costs of expansion--including establishing new facilities, hiring more workers, and enticing new customers with deep discounters--could mean it will take a long time for most meal kit services to begin making money."
However, this is really only one side of the story. What the report doesn't cover are the whole other slew of startups racing toward kingpin ownership of a much larger, and incredibly lucrative industry. Outside the massive $1.5 Billion market for healthy meal kit services are the marketplaces themselves--like UberEats, GrubHub, and more--competing for ownership of the "middleman" territory between restaurants and consumers, as well as the more mobile healthy food providers who actually do the cooking and deliver the meals wherever a customer places their order--take Sprig, for example.
Where is this sudden demand for healthy and fresh meals supplied via delivery? It may have something to do with our ever-escalating "on-the-go" lifestyles, and may also be related to changes happening within workplaces.
For example: a Nielsen report shows that younger generations are far more likely to value healthy food options, and are even more willing to pay a premium. In addition, the 2016 Staples Workplace Index shows that even more so than an employer supplying fitness amenities, employees value fresh and healthy options the most.
Combine this data with other trends happening in the fast casual food space, like renowned chefs spearheading fast-casual concepts--Rick Bayless with Fonda Frontera,Rodelio Aglibot with Firefin Poké, etc.--and you then end up with even more niche-specific startups within the healthy meal kit industry like HUNGRY, which sources over 50 acclaimed chefs to provide fresh office catering on demand. These meals (as seen has become a consumer demand) can also be ordered to fit vegan, gluten-free and paleo diets. Essentially, what a platform like HUNGRY caters to isn't just workplace convenience, but also the growing trend of Millennials in the workplace seeking healthy food options--and their emphasis in choosing employers that encourage and/or provide this type of eating.
So, pulling back then, where is all this headed? And furthermore, what can the size of these related industries and their rapid innovation tell us about the future of food?
It's safe to say that, in the same way fast-casual concepts have become a booming market, so too will the rise of the healthy meal kit industry--from the Blue Apron's of the world, to the HUNGRY's, and over to the marketplaces in the middle like UberEats. In fact, it will be interesting to see the separation that occurs between the actual meal creators and the services solely intended to act as middle men for food orders (and how the leaders in one space may affect the other).
What we do know is that consumer demand for healthy options--on the go and at the workplace--is continuing to rise. If you haven't yet installed an app that allows you to order healthy food with two taps, you will soon. As common as it is for consumers to pick a local spot for lunch, it should be assumed that soon there will be a handful of apps that dominate this space as well.
From there, this third tier of eating will become solidified.
We will still have our favorite sit-down restaurants.
We will still have our favorite fast-casual spots.
And we will have our favorite healthy, fresh mobile apps, with either ingredients or fully cooked meals delivered to our door.