Consumers today are looking to save time, money, and calories. And in trying to do that, it has completely changed how and where they eat. According to data from the USDA, at least 50% of U.S. food expenditures in 2014 were allocated towards food away from home. That number has steadily increased since they began collecting the data in 1929.
Additional USDA data shows that 62 percent of millennials surveyed in December 2017 reported purchasing prepared deli food, carry-out, delivery, or fast food within the last seven days.
Mostly fueled by trends to eat healthier meals in shorter amounts of time, consumers are more than willing to fork over some extra cash for convenience and time efficiency.
According to Business Insider, there is a massive unfulfilled market opportunity here.
“As of 2015, about $210 billion worth of food is ordered for delivery or takeout on an annual basis in the U.S., according to Morgan Stanley research. But two of the industry leaders, GrubHub/Seamless and Eat24, generated a combined $2.6 billion in food sales last year. This means the market is underpenetrated but massive, which will incentivize continued competition and, potentially, an influx of new entrants.”
Meanwhile, the meal kit industry has seen exactly that sort of influx. The meal kit industry was dominated by Blue Apron just one year ago. Now, though Blue Apron has managed to hold on to its lead internationally, their market share has dropped more than 17% and now HelloFresh has surpassed them as the largest meal kit company in the U.S. And other competitors like Home Chef and Sunbasket are now gobbling up those extra dollars.
But the overall popularity of meal kits is dipping. The Wall Street Journal recently reported that investors have all but abandoned the meal kits space. And data from Foodable Labs shows that all the top meal kit brands are showing decreases in their consumer sentiment ratings.
Still, the meal kit industry is a $1.5 billion industry, and certain segments of our industry are heavily impacted by consumer crossover with meal kits and groceraunts. For example, 34.7% of fast casual customers also use meal kits or groceraunts, making them a direct competitor. QSRs, on the other hand, are safest with only 12.3% crossover.
Check out the episode above and let us know what other data you want to see!