When the meal kit first came into existence, customers lined up to try this new and innovative system that fulfilled the desire for a high-quality meal without the restaurant price tag. Once the idea gained popularity, meal kit companies began popping up, claiming to have the best meal kit on the market. Slowly but surely, these companies starting shutting down as the market became oversaturated.
“The meal-kit industry is still the wild west. The industry is going through a lot of growing pains...,” says Brittain Ladd.
He believes one of the main reason these companies are unable to stay afloat is they just don’t have enough capital to keep going. One of the biggest challenges for the meal kit is the delivery model and its cost. Known in the restaurant industry as “the last mile,” these start-ups are struggling to find a location that puts them close enough to a customer in order to keep costs down.
Meal kits are a great product–unfortunately, they’re not enough to start a business. Brittain found that many founders of these companies did not have enough business expertise to evolve the idea into a full-fledged business. Consequently, companies faced the harsh reality of high cost-low retention. And although acquisitions may seem like the only light at the end of the tunnel, Brittain sees other opportunities for success.
“If they’re not going to be acquired, they absolutely should be reaching out to restaurants chains and offering them a branded product or ask them to sell their meal kit exclusively in their store…,” says Ladd. Meal kit companies need to brainstorm a way to close the gap between the product and the consumer.
Listen to this episode of The Barron Report for more insights on the meal kit industry and his recommendations to founders in order to stay afloat!
12:33 Top 5 Companies To Watch
15:34 Restaurants Co-utilizing Space and Meal-kit Delivery System
18:10 Chef’d Biggest Flaw
21:25 Misconceptions Of Success
24:00 Fast Casual New Delivery Systems
30:00 The Future of Meal Kits
33:52 Deliver as Close to the Customer as Possible
01:57 The Demise of Chef'd
02:06 Current Status of the Meal Kit Industry
04:23 Ready-to-eat Meal-Kit Development Ideas
08:08 The Problem with the Meal-kit Industry as a Whole
11:03 Convenience Stores as Distribution Points