With an array of elevated restaurant concepts and farm-to-table in full force, most consumers have a good amount of healthy dining options available to them.
Some consumers, however, are starting to dine-in less, and even order less takeout. They’re not venturing to restaurants as much for a full-on dining experience. Instead, they are using meal subscription services.
These meal delivery services allow users to select their dietary preferences and choose between a few meal plans. Every week thereafter, consumer select their meal options and receive a shipment of ingredients with recipes to prepare the week’s meals. Depending on the service, the price per meal per person can start anywhere from $8.75 to $12.
With the growth of these subscription services, it is evident that a large population of consumers want to cook for themselves. They may still be visiting restaurants, but these avid foodies are looking for another kind of social dinner experience. They want a convenient way to cook but also want to make something tasty and fresh.
These amateur chefs are finding a way to enjoy the art of cooking without having to do the time-consuming legwork of deciding what to cook, what ingredients are needed, and how much of each ingredient they’ll really need. Instead, subscribers receive a box straight to their door that contains everything needed for their meal, along with a recipe pamphlet explaining how to prepare that meal.
The high potential for growth with these meal programs has sparked some fierce competition. More and more food delivery services continue to saturate the market as the big dogs on top continue to recruit members. Let’s take a closer look at the companies leading this category:
Blue Apron has one of the lowest price points with two plans available: a two-person plan including three meals for the week priced at a weekly total of $59.94, and a family plan that feeds four, which includes an option to pick two or four weekly meals (priced at $69.92 per week and $139.85 per week, respectively).
When it comes to weekly meal options, Blue Apron’s menu is more fixed and limited than other subscription services. However, the company also offers a wine program with deliveries of six 500ml bottles of wine. These wines can be “perfectly paired” with that month’s Blue Apron meals and are sent with a wine tasting and pairing guide. Members can cancel the meal or wine service at any time.
According to Blue Apron’s website, “We believe that cooking together builds stronger family bonds, is good for society, and promotes a healthier diet. We’re working to create cooking experiences that are fun for the whole family and that will inspire a new generation of chefs.”
This subscription service is at the higher end in terms of price point, but the options are more flexible for two people. All dinners are $12 per person.
This company’s messaging emphasizes the quality of its ingredients. “Plated caters to ‘evolved eaters’ who care about how they’re eating and where their food is sourced. We’re building a product for those who are conscientious about food quality and sustainability — this involves everything from our sourcing decisions, packaging, and recipes,” says Jacqueline Wasilczyk, the senior content marketing manager at Plated.
Consumers want to know where their food is coming from and this service really caters to that. “More and more, we see an increased awareness and desire for sourcing transparency, which is why we’re investing in thoughtful sourcing standards,” says Wasilczyk.
But it’s not only about the high standard of the ingredients used. It’s about the experience and convenience, too. “We appeal to thoughtful eaters who crave discovery, creativity, and connection in the kitchen, but lead busy lives and are looking for ways to enhance their dinner experience in an enjoyable, memorable way,” she adds.
Hello Fresh offers three types of plans for users, the most options compared to Blue Apron and Plated. Users can choose between a classic, veggie, or family box, which are between $8.75-$9.90 per person.
“There’s a lot of reasons why people choose not to cook at home,” says Rebecca Lewis, the Hello Fresh registered nutrition dietitian. “A lot of it is time and convenience and a big chunk of it is lack of self-confidence. We eliminate those three big hurdles.”
Hello Fresh focuses on motivating people to get back into the kitchen. The service aims to make cooking more simple. “Hello Fresh is not ‘Master Chef.’ We are not here to make it complicated. We are not here to make it stressful. We are here to make cooking an enjoyable activity that you can share with your friends and family,” says Lewis.
The company also focuses on markets with customers that don’t have access to fresh food in their area. “We also see customers who don’t have other options, too, like customers who live in food deserts, or maybe a grocery store or the closest fast food spot is within a 40-mile radius to their home,” she says. “So, for them, we are the only available option to get fresh fruits and vegetables on to their plate.”
While restaurants are bringing farm-to-table in their four walls, services like Hello Fresh are providing a farm-to-the-kitchen-table experience at home.
What Does This Mean for the Restaurant Industry?
As meal subscriptions continue to grow in popularity, will restaurants start to lose more business because of them? As a whole, we are seeing the frequency of home cooking increase. According to a 2015 report by Food Marketing Institute, consumers prepare an average of five evening meals at home a week. This growth can be attributed to the healthy eating trend. Dining out at a restaurant often has an unhealthy stigma associated with it. Meals are being cooked more at home because consumers have more control over how healthfully it is prepared. Not to mention, more consumers are feeling more nostalgic when it comes to cooking from home. This, along with the influx of easy how-to recipe videos from media outlets like Buzzfeed Food could very well be influencing consumers’ return to the kitchen to get more creative on their own. According to Packaged Facts, the number of consumers who like to try new recipes has increased by 32 percent over the past five years.
Even though we are seeing an increase in meals being eaten at home, this doesn’t mean all are home-cooked meals. A recent study by market research firm NPD Group revealed that less than 60 percent of dinners eaten at home are actually cooked there, meaning we’re seeing some major growth in take-out. Furthermore, there has been an increase in the consumption of convenience foods, such as refrigerated entrees, frozen dinner kits, and packaged meal kits, specifically from millennials (reported by Gallup.)
To put things into perspective, Blue Apron delivers roughly 5 million meals a month. The company’s competitors are further behind. Hello Fresh claims to deliver 10 million meals internationally since 2012 and there’s still significant room for growth in this market. The Technomic firm predicts that the meal-kit service segment of the market will grow to between $3 billion to $5 billion in the next 10 years.
However, there are a few times during the day that restaurants have the upper hand, specifically breakfast and lunch. Consumers are gravitating more-so to take-out and convenient meals during these times. Not to mention, these subscription services don’t cater to party of ones. Each meal is for two or a family.
You will see more chefs and restaurants collaborating with these types of services. It was just announced that Jamie Oliver, celebrity chef and restaurateur, has partnered with Hello Fresh and will be providing recipes and expertise to the Hello Fresh members. “By portioning up all the ingredients and delivering them straight to your door, you can just get on with the cooking, and in my mind, anything that helps busy people be able to cook from scratch is a good thing,” says Oliver on the Hello Fresh website regarding the new partnership.
This begs the question: Will restaurant chains also jump on the bandwagon? Will restaurants begin to provide more make-it-yourself options that are more elaborate than the frozen food brands from TGI Fridays and the home menu kits by P.F. Chang's? If the success of these programs continue to increase, it wouldn’t be surprising to see more restaurateurs getting involved.