Here’s a case where there are new product development opportunities in that realm where “never” meets “always.” What seemingly never changes is consumer interest in convenient, quick meal solutions—particularly at dinnertime. What always changes? It’s how meal providers and products address those consumer needs.

The past few years have seen strong innovation and development across the wider spectrum of meal solutions. Of course, that’s been driven by online meal and meal prep subscription services such as Blue Apron, Home Chef, Sun Basket, Hello Fresh, Freshly, and others. Meanwhile, every major city has others clamoring for share of stomach—including local restaurants, entrepreneurial catering kitchens and other delivery services. 

All of these new options appeal to consumers who value both convenience and adventurous eating. These services make it easier for people to stay in, cook (or simply eat) at home, try new recipes and save time (and potentially money) on a per-meal basis compared with the cost of restaurant food.

True Chef Meal Kit
True Food Innovations transforms former Chef’d meal delivery brand into new retail products.

Not surprisingly, growing interest—both on the part of consumers as well as investors—already has led to a few market shifts. In particular, the online ingredients and meal delivery sector has seen elevated competition, heightened concerns about packaging and logistics, and some growing consumer fatigue with subscription-based food models.

Today’s “meal kit wars” also are starting to show signs of higher casualties. Some online subscription providers already have shut down or have been acquired by larger brands (including retailers). Likewise, major retailers and packaged food producers increasingly offer their own meal kits. These convenient products do not require a subscription commitment and are found either in-store or are available through other more conventional online ordering options.


Supermarket Solutions

Within the retail market, meal kits remain a relatively limited market in terms of sales and new product development. In 2018, meal kits accounted for just 3.5% of global ready meal and side dish launches recorded by Innova Market Insights. That makes it one of the smallest subcategories in NPD—ahead of only instant pasta and sandwiches—in terms of numbers. However, the category has seen good growth in recent years from this small base. Its new product numbers rose 78% in 2018 compared to the year before, when share was just 2.1%.

Perhaps not surprisingly, meal kits see the highest levels of interest in countries where the convenience foods market is highly developed, as consumers look for a happy halfway point between a ready meal and scratch food preparation. Europe and North America accounted for a combined 61% of meal kits launches in the first half of 2018, but there is also strong growth in Asia, where share grew to 27%, overtaking North America for that year.

Nonetheless, the US accounted for more than one-fifth of 2018 meal kit launches, which is a large share for just one country. Its share of ready meal and side dish launches was ahead of the global figure at more than 6%, up from just over 4% in 2017, with numbers, although still relatively modest, more than doubling during a five-year period.

Street Kitchen Pad Thai Noodle Kit
Australia’s Passage Foods gives US consumers new street food style meal options with on-trend Asian tastes.

Looking more closely at the US supermarket shelf, it’s clear that the Kraft Heinz Lunchables brand—having pioneered the lunch kits sector (particularly for children), back in the late 1980s—is still going strong. The ready-to-eat line started with kits made up with crackers, cheese and meat, but it since has extended into other areas. The brand’s lunch combinations range encompasses lines such as Italian Style Chicken, Asian Style BBQ Chicken and Mexican Style Chicken Tacos; as well as more traditional meat and cheese combos (sold with and without drinks). There is also now an organic option, plus an “Uploaded” line sized up for teens.

It does have some rivals, perhaps most notably Smithfield Foods’ Armour LunchMakers brand. Meanwhile, other new entries have slightly shifted the focus to more on-trend snacking. These include newer options from Hormel Foods Corp. (Hormel Natural Choice Snacks and “Stacks”) as well as Tyson Foods (Hillshire Small Plates).

Another established meal kit area involves ethnic options that need to be cooked—often with the addition of meat and other fresh ingredients. General Mills’ Old El Paso brand Mills has long been active in offering Mexican meal kits, including sauces and seasonings, for options such as tacos, fajitas, enchiladas, burritos and quesadillas. The brand offers as many as 10 different meal kit products with a growing range of recipes, all requiring the addition of meat and vegetables.  

Also joining the party is B&G Foods, Inc., Parsippany, N.J., which closed 2018 with the debut of Ortega Bakeable Tortilla Bowl Kits (among other new offerings).

“We strive to continuously provide consumers with innovative, on-trend products that will appeal to the whole family,” said Haven Cockerham, vice president and general manager at B&G Foods. “Our new Ortega Bakeable Tortilla Kits, expanded line of Ortega Good Grains Taco Shells and Ortega Flavor Craver Taco Sauces spice up traditional taco nights with a distinct blend of flavors and authentic taste to provide restaurant-inspired meals at home.”

Looking at launch recorded activity since the beginning of 2019, Innova Market Insights finds another on-trend ethnic option, the “Street Kitchen” line of Asian stir-fry kits from Australia’s Passage Foods (with US operations in Columbia, Tenn., according to its website). Offerings include Teriyaki Chicken, Pad Thai, Kung Pau and Korean BBQ—all of which require the addition of meat and vegetables.

Among other new shelf-stable and ethnic meal kits was a line (April 2018) from Upton’s Naturals, Chicago. These Thai-inspired dishes are ready after just one minute in the microwave. Pre-cooked noodles, fresh (never freeze-dried) vegetables, and flavorful spices can be found in the fully cooked and composed Massaman Curry, Pad See Ew, Thai Spaghetti, and Thai Curry Noodle meals.

More recently, Nestlé USA went even further in the freezercase with a Stouffer’s Complete Family Meal Kits, which are billed as “customizable kits available without a subscription.” The line launched nationally toward the end of last year with varieties such as Roasted Tuscan Style Chicken, Braised Pork, Beef & Broccoli and Sesame Chicken. In this case, there are no additional ingredients to purchase. Offerings include pre-measured and prepared ingredients for four servings. They are designed to be ready in under 25 minutes. Kits include four separate packages with vegetables, protein, grains or potatoes and a sauce—all individually packaged and frozen so consumers can tailor or add to the recipes to meet their own tastes or preferences.


Premium Positioning

While the expansion of the meal kits market has reflected the development of online commerce in the food industry, this is not without its problems for many of the smaller companies. Customer retention challenges—coupled with high costs of production, packaging and delivery of perishable products—have caused considerable difficulties. 

Perhaps not surprisingly, there has been a shift whereby many of the leading online meal delivery companies since have turned to mainstream retailer partnerships and/or acquisitions. These include relationships between Blue Apron with Costco, Plated with Albertson’s, HelloFresh with Giant, and Home Chef and Kroger.

Established in 2012, Blue Apron has been one of the most prominent meal kit companies. In 2017, it was the first US meal kit company to go public. Since then, however, it has seen its market value fall sharply in the face of customer retention issues and criticism (leveled at other meal kit companies too), about excess waste involving individual packaging for all meal components. In the light of its problems, Blue Apron entered the physical retail market with four pre-packaged meal kits sold at select Costco stores in California.  Before the year was out however, officials decided to halt that program (at least temporarily).

Blue Apron closed last year with another move to extend its target audience. It announced a partnership with WW (formerly known as Weight Watchers), a wellness company that offers the world’s leading weight management program. The new partnership introduced a rotating weekly meal delivery service featuring recipes inspired by the WW Freestyle program. It is intended to help Blue Apron reach a target audience of millions of WW members who are interested in losing weight with better nutrition and healthy eating choices. WW changed its name from “Weight Watchers” in September 2018, and has four million subscribers worldwide to its services related to wellness advice and products.

Freshly Inc. Prepared Meals
Nestlé USA became a minority investor in Freshly Inc., an online, direct-to-consumer maker of refrigerated, finished prepared meals that are ready in just three minutes.

In other news, last year saw Walmart partner with the online meal kit company, Gobble, to sell Gobble meal kits over Walmart’s eCommerce website. For Gobble, the deal instantly provided a much wider marketplace and it overcame the problem that consumers don’t always want to commit to a subscription. All in all, this might be a short-term arrangement as Walmart develops its own meal kit lines to sell instore and online. Pre-portioned meal kits were launched into 250 stores in the first half of 2018, with plans for 2,000 stores by the end of that year.

The Walmart meal kits are available in three different formats and serve two people per meal, in a price range of $8 to $15 per two-portion meal. The “pre-portioned meal kits” allow customers to buy pre-selected, pre-chopped ingredients to cook meals at home, such as Steak Dijon, Basil Garlic Chicken, Sweet Chili Chicken Stir Fry, or Pork Florentine. Its Great Value sub-brand also has seen a range of Chef Inspired and Artisan Crafted options, while a number of Rotisserie products have also been introduced and on-trend bowl kits featuring Korean Style Bulgogi, Steak Burrito and Steak & Tzatziki joined the Marketside sub-brand in late 2018.

Another retailer move involves The Kroger Co., Cincinnati, which last year purchased Home Chef, the Chicago-based meal delivery business. While Home Chef continues with its normal operations, Kroger has made several interesting tweaks, which it announced this February. 

In part, Kroger said it would introduce pre-packaged Home Chef retail meal kits to new cities, bringing the weekly rotating meal solution to 500 additional Kroger family stores nationwide. Additionally, launched a customizable meal kit feature for online orders, allowing customers to have more flexibility in deciding what’s for dinner by providing the choice to change and upgrade recipe ingredients. The feature—the first among leading meal kit brands—offers unprecedented variety for customers.

“Kroger continues to redefine the customer experience and provide new ways to shop for, prep and cook meals through exciting brick-and-mortar and digital experiences,” said Robert Clark, Kroger’s senior vice president of merchandising. “Last October, Kroger introduced Home Chef retail meal kits, and we’re now expanding to add the easy-to-prepare recipes to hundreds of new locations, providing convenient access to the meal solution at more than 700 stores. We look forward to the continued growth of Home Chef in 2019 through expansion and new products.”


Blurring the Lines

Still more new developments seemingly blur the lines because they involve manufacturers getting directly involved to one extent or another. 

Last summer saw True Family Enterprises and its wholly owned subsidiary True Food Innovations (TFI), purchase the assets of the Los Angeles based meal kit company Chef’d. TFI, Buena Park, Calif., develops and manufactures refrigerated meals, foods and beverages that utilize HPP (high pressure processing) technology. 

This March saw TFI introduce new meal kits under both the True Chef and Chef’d brands at Gelson’s Markets in California. Gelson’s Markets is carrying all eight recipes from both brands providing consumers a selection of recipes, including: Truffle Butter Sirloin Steak, Chicken Marsala and Saffron Tomato Chicken.

“Our strategy is to provide retailers with a multi-brand offering with the ability to provide meal kit options based on price, demographics and geography; Gelson’s agreed with us and has built a destination with both the True Chef and Chef’d brands for its consumers,” said Robert Jones, president of True Food Innovations. 

Also making waves is Nestlé USA, which in 2017 became a minority investor in Freshly Inc., an online, direct-to-consumer online ordering and delivery business. It specializes in refrigerated prepared meals that are ready in just three minutes. The New York City-based company started in 2015 and this year, Freshly is targeting delivery to 48 states (up from 28 states at the end of 2018). Its fresh meal subscription plans range from $49.99 for four meals a week to $107.99 for 12 meals a week.

Commenting at the time of investment was Nestlé USA Chairman and CEO Paul Grimwood (now non-executive chairman).

“While most food choices are still made in supermarkets, it’s clear that consumers are responding to a growing universe of direct-to-consumer options, made possible through innovation. Acquiring a position in Freshly not only gives us access to this growth market, but it also brings reciprocal benefits for both companies. Nestlé will gain visibility into Freshly’s advanced analytics and its highly effective distribution network and Freshly will benefit from our R&D, nutrition and sourcing expertise.