The Rise of Home Meal Kits and the Effect on QSR/Fast Casual Restaurants
July 16, 2019
Written by Ozzie Godinez, CEO/Co-Founder
According to market research, meal kits are now a billion-dollar industry and show no signs of slowing down. The concept — recipes and ingredients packaged for home delivery — are sold by big box retailers like Amazon and Walmart as well as subscription services like Blue Apron, Hello Fresh, and Plated.
The expansion of options, as well as the wide range of price points, is attracting new users. The market is expected to hit $10 billion by 2020. Clearly this is an evolving market with many opportunities for growth.
The QSR/Fast Casual market has responded to the home meal kit industry through a variety of scenarios, including car-side pick-up options and delivery services such as Uber Eats. The chain that is the greatest innovator so far is Chick-fil-A which in August 2018 launched its own concept titled “Mealtime Kits” at 140 locations in the Atlanta area. For $16 apiece, there are five different versions of the kits. They were considered successful because they paired food quality with the convenience of drive-thru service while operating outside the subscription model.
The success of the home meal kit test has prompted companies that service QSR/Fast Casual operators to implement in-house manufacturing technology and processes that would enable them to start their own meal kit brand. The appeal for this trend are the 113 million people in the U.S. who identify as cooking enthusiasts. For them, home meal kits are desirable for their convenience, customization and choice. For restaurants, the benefit of offering meal kits makes them as competitive, with both grocers and the subscription services. The lines in foodservice are beginning to blur between both areas, which has forced restaurants to pursue greater market share for home diners. How they do that will require differentiation in packaging, pricing, quality of food, portion size, recipes, creativity, and brand loyalty.
One thing is for sure: the growth of streaming media, telecommuting, greater home delivery options, and the pull of home comforts have compelled consumers to dine at home more. Consumers understand that, with the variety of options for home meals, they now have a choice for enjoying prepared food. Restaurants and their marketing agencies that edge out the competition will be the ones that cater to the consumer with easy-to-order, customizable fresh-made meals that deliver a restaurant-quality experience but meant to be enjoyed in the comfort of home.
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