Grocery and foodservice are gaining ground in the meal kit market as COVID-19 has consumers rethinking mealtime routines
KerryDigest Fast Facts:
- Amid COVID-19, meal kit solutions are moving from subscription services into grocery stores, retailers and foodservice.
- Retail meal kits are available in various formats, including shelf-stable, refrigerated and frozen, and across a full range of cuisines.
- For consumers, these kits satisfy a number of needs, including convenience, family-friendly activities and a growing interest in cooking.
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KerryDigest Full Scoop:
As the COVID-19 pandemic continues, our insights teams predict consumers will continue cooking at home, either out of necessity or by choice. There are multiple reasons for this: some restaurants remain closed and most have shuttered their dining rooms; people are concerned about finances due to unemployment fears and talk of a pending recession; consumers are limiting their grocery shopping trips, often stocking up for longer periods of time; and cooking offers a pleasant pastime—even for families.
Meal kits, which we recently reported were increasingly expanding from subscription service to retail, will continue to play an important role for these home cooks—and perhaps an even greater one as the need for convenience, variety and stress-free meal planning persists. Meal kits take away some of the chore of meal coordination and alleviate the stress of shopping for individual ingredients that may be hard to find, all while serving up the satisfaction of a home-cooked meal.
Here, we break down the future of meal kits, which is being rewritten by retailers as well as foodservice operators looking for innovative ways to keep consumers satisfied and shopping at their establishments.
A timely update to the meal kit model
There’s a reason meal kits have become ubiquitous in recent years: They provide an easy and comforting mealtime solution for home cooks, many of whom want to spend less than an hour on dinner and don’t believe that using pre-cut or pre-cooked ingredients takes away from the experience, according to Kerry’s report “Out for Delivery.”
But, if consumers still want the meal kit format, now more than ever they’re questioning the wisdom of subscription-based meal kits. These often come with high fees and contracts, something consumers who have lost income may be reluctant to commit to during quarantine. At the same time, most subscription-based meal kits can’t be purchased for same day use, thanks to the delivery timeline, yet they must be assembled in the days immediately after receipt, rather than stored for future preparation.
And, though there’s some indication that sustainability concerns have lessened a bit for some consumers during COVID-19, households that begin to rely on meal kits more than usual will certainly notice the extra packaging required to ship perishable items, and may begin to question if there’s a better solution.
An opportunity for grocery and retailer meal kits
With COVID-19, consumers are making fewer trips to the grocery store and stocking up on essentials. According to Mintel research from mid-April, 2020, 59% of U.S. adults reported having recently stocked up on groceries and other supplies, often making exhaustive shopping lists and lengthy trips to the store. Given the mounting toll of planning most meals at home, rather than relying on dining out, it's no wonder that easy-to-assemble meals are becoming a regular part of household grocery shopping.
Even before COVID-19, meal kits were making it to retail and savvy consumers were using them as a shortcut to mealtime success: According to pre-COVID-19 data from Mintel, each week 67% of adults in the U.S. ate a pre-packaged meal or side dish for dinner and 2019 Nielsen data shows that in-store meal kit purchases account for 60% of meal kit sales growth.
As more brick-and-mortar stores stock shelves with meal kits, interpretations of such products will continue to grow. Manufacturers interested in creating retail meal kits and components may want to explore the following formats.
Ready-to-eat meal kits and components: Consumers are looking for convenient ways to incorporate week-to-week meal planning into their quarantine routine. Busy families juggling working from home and home-schooling their children may simply want put healthy or comforting food on the table. They may also want to use meal kits to teach their kids how to cook or use cooking as a quality time activity. Grocery stores can leverage in-store products to promote either convenience or offer kid-friendly meal kits, placing such items at kiosks throughout the store where consumers can mix and match components in one quick stop.
Frozen meal kits and components: According to Progressive Grocer, eating trends over the past 20 years have shown a 68% increase in home meals that include a frozen dinner or entrée prepared in the oven, microwave or pressure cooker. That number is only expected to grow as consumers react to COVID-19. With less frequent trips to the grocery store due to self-quarantine and health concerns, consumers are returning to the frozen food aisle as they stock up on products with longer shelf-life. This is especially true for frozen fruits and vegetables, which consumers perceive as supplying convenience and nutrition without sacrificing taste. When packaged as ready-to-make meals and sides, such products can be rebranded as "frozen meal kits” and meal components.
These offerings deliver premium quality and minimal cooking steps with the added convenience of frozen, there-when-you-need-it convenience. As with other formats, frozen meal kits include pre-measured, cut and portioned ingredients—just open the freezer and go.
Foodservice meal kits and components
Despite the renewed interest in cooking, consumers still miss the experience of dining out and eating some of their favorite restaurant meals. Some foodservice chains and restaurants are now offering meal kits for consumers to take home and assemble themselves. Although such innovations were pioneered in part as a way for struggling restaurants to stay viable—giving customers the opportunity to purchase multiple meals at once while reducing back-of-kitchen work—foodservice and restaurant meal kits may be here to stay.
For instance, Chick-fil-A® started offering a chicken parmesan meal kit, which includes a six-step recipe card and pre-measured and ready-to-heat ingredients for dinner for two. Portillo’s is offering Italian beef and all the fixings so customers can create their own sandwich at home. And numerous pizza brands, ramen hot spots and more are selling take-n-make meal kits for customers who want to have a hot dinner ready on their own time.
This trend will likely continue to evolve. Some restaurants have shut down their storefronts and are instead relying on brand recognition to sell ready meals at local grocery stores, something that could eventually branch out to include branded meal kits. And, brands that had considered turning trademark sauces and dishes into CPGs may find that COVID-19 pushes them toward a product or meal kit offering sooner than later.
To learn more about custom meal solutions, Kerry’s proprietary consumer insights and innovations in the meal kit marketplace, contact Kerry. To learn more about how COVID-19 is affecting the food and beverage industry, including changes in consumer preferences and purchasing behaviors, visit Kerry’s COVID-19 resource page.