At this point, you’ve likely seen an advertisement online or received a brochure in your mailbox for a meal-kit delivery service like Hello Fresh. This company, along with several others, entered the market a few years ago looking to jump on the “surprise box” trend that has taken over the internet. The companies offer a variety of choices, with Hello Fresh offering chef-curated recipes that include options for vegetarian and vegan diets. In their last quarter of 2019, Hello Fresh received over 10 million orders for the first time in company history. Clearly, this company, and American competitor Blue Apron, have stumbled upon a unique market.
What Customers Want
It’s also no secret that the COVID-19 pandemic has changed grocery shopping. Companies like Blue Apron and Hello Fresh have seen a significant increase in sales since the beginning of the pandemic, and Amazon and Walmart have created online programs to nudge their way into the online grocery market as well. Before the pandemic, only around 11% of grocery shoppers purchased their groceries from online sources, and it’s currently unclear whether online shoppers will return to shopping in stores after the pandemic has ended. This change in consumer purchasing has put a strain on independent grocers across the nation.
However, there may be a way for independent grocers to steal a piece of the pie as well. Even if your grocery store doesn’t deliver, you can still offer in-store versions of meal-kits for customers. Convenience is king in all retail, and this is especially important for two of the largest consumer groups – Gen Z and millennials. In fact, 55% of millennials and 53% of Gen Z shoppers state that convenience is a major factor in their grocery shopping. Meal-kits serve these consumer groups in three ways: convenience, variety of food options, and the satisfaction of a home-cooked meal for themselves or their families.
What Should You Offer?
Providing convenience to your customers can present in a number of different ways, from aiding the working mother to cook a healthy meal for her children to introducing international cuisines to your customers. In my own family’s case, meal-kits allowed my cooking-impaired husband to provide food for us as I recovered from the birth of our second child. I still remember the surprise I felt when I discovered that his roast beef meal tasted better than mine.
Packaging items together to create specific meals is nothing new to grocery stores. You’ve been doing it for ages. The keys are providing quality and variety. Millennials, the current largest US generation, are frequently known for spending their money on experiences rather than traditional purchases or investments. This desire to have meaningful experiences also drives this generation to experience a variety of foods, likely contributing to the reason behind millennials eating out so frequently.
While providing meal-kits with common regionally-preferred foods is a smart decision for local grocers, including a variety of meal options to consumers could pay off in surprising ways. Dietary restrictions provide a challenge to many consumers, and according to a recent study, 60% of Americans state they have to restrict themselves from at least one nutritional component. Finding foods that meet dietary restrictions is time-consuming and tedious, so one great meal-kit service would be low-sodium meals for the 45% of US adults suffering from hypertension.
Important Questions to Ask
If creating meal-kits for your customers seems like something you think you would be interested in, here are a few tips to get you started:
- Research some of the most prevalent dietary restrictions (or choices, like vegetarian or vegan) and create meal packages based on these.
- Research popular restaurants from your surrounding area. What are the most popular dishes? Could your customers cook these with a few instructions? Are they international cuisine?
- Speak to your customers and ask them what types of food they prefer most. Are they regional foods, like Southern biscuits and gravy?
- If you’re going to create packages of foods most of your customers have never tried before, it will also mean they will need a recipe. Keep this in mind when considering costs as well.
- Is there a chef you could partner with in the area to help come up with meal ideas?
Consider all your options after researching information about your area before jumping into meal-kits. Ultimately, your goal is to boost your profits without making too much additional work for yourself. If you think your customers would be underwhelmed or your staff overworked, it’s not a good option for your store.