As a restaurant operator or food service professional, you probably have wondered if meal kit services, like Blue Apron, Plated and Hello Fresh are really competition to restaurants.
Consumers may be paying less for meals in these kits than most of the meals served at restaurants, but they still have to put in the work to cook their own meal. So what impact do these services really have on the restaurant business?
In a recent study by the food industry consulting firm, Pentallect– it states that the current impact by these services has been relatively small, however that could change quickly in the next few years.
The growth rate in the meal kit delivery sector is between 25-30% a year, which is impressive for this new industry. If this continues, then within the next few years more consumers will be making the decision to eat at home instead of a full-service restaurant.
Not to mention, these meal delivery services are targeting the same demographic as most restaurants between the ages of 25 to 44 with a higher income.
However, these companies are spending a lot of marketing dollars to acquire new customers. According to Pentallect, only 3.8% of households have tried these services.
Blue Apron's recent IPO gave us much more insight to how profitable these businesses really are. The company spent over $60 million just on marketing.
But Blue Apron's debut on the market last week has been described as lukewarm. It's likely that the restaurant industry should be more concerned about Amazon's new acquisition of Whole Foods. Amazon is expected to take food delivery to the next level, meaning less customers will be venturing out for meals. This also means a brand consumers love and know will be taking business from the meal kit delivery companies as well.