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What would allow a meal kit delivery company to truly go mainstream? originally appeared on Quora: the place to gain and share knowledge, empowering people to learn from others and better understand the world.
Answer by Bonnie Foley-Wong, Pique Fund founding investor & Integrated Investing author, on Quora:
Writing from my perspective in North America, for a meal kit delivery company to go mainstream, we would need to see the convergence of the following factors:
- Automation
- Efficiency and Scale
- Convenience
- Affordability
- Shift of risk and responsibility
Here are some of the scenarios that would need to happen for meal kit delivery to go mainstream:
- Automation of every aspect of meal kit delivery, from selecting items to payment to delivery, making meal kit delivery more efficient and convenient than shopping at a supermarket.
- Cost of transportation infrastructure becomes dramatically cheaper for companies than for individuals making it cheaper to have things delivered than to travel to a store to purchase it. The time saved from shopping becomes definitively better spent doing something else.
- Meal kit delivery becoming cheaper than shopping at a supermarket for the vast majority of people.
- Decision-making for consumers at supermarkets becomes so overwhelming that having someone else make the decisions of what goes into a meal is a significantly better option. Customization is no longer a sought-after feature.
- The technology and infrastructure exists to be able to deliver meal kits to practically anywhere. (We have enough difficulty ensuring that internet is accessible in homes practically anywhere, making this hard to imagine, if not impossible. But never say never.)
Meal Kits 2.0?
The first time I noticed a meal kit delivery company, was in the mid-2000s in London. I can’t remember what it was called, but in the dense and populous city of London, it targeted money-rich, time-poor customers (and quite often the bankers of Europe’s financial centre).
More recently, I noticed meal kit delivery companies re-appear in a different guise or context, this time targeting the money-rich, time-poor customers in the tech community. I’ve also seen companies curate locally sourced, seasonal produce for kits, as well as healthy, post-partum meals for tired, new parents.
Bakeries and Bread Routes
For predictive questions like this, I not only try to imagine the future, I also look to the past. When I think of meal kit delivery companies attempting to go mainstream, I think of supermarkets. I think of “going mainstream” as meaning “ubiquitous” and that’s what supermarkets are. In most economies, most people buy food for their meals at supermarkets.
The largest supermarket group in Canada, George Weston Limited, has its origins in the late 1880s as a bakery and as a bread delivery route [1]. (Bread bakeries have a very long history even before this, dating back to Ancient Egypt, the Greco-Roman period, and medieval Europe. They were “often government-run and regulated because of the importance of a reliable supply of this staple food”[2].)
Bakeries were a substitute for baking bread at home. Bread routes were the means of getting fresh baked bread to customers conveniently. Industrial baking featured the following characteristics and factors affecting its expansion:
- Automation and technology made bread making efficient and scalable.
- Access to transportation resources and technology made bread delivery efficient and scalable (starting with horse and buggy, followed by engines and trucks).
- The taste, quality, and freshness had to be comparable to home baking.
- The convenience of having bread delivered had to be worth the cost of delivery and there had to have been a good use of the time saved (leisure or gainful work).
- Store-bought bread was initially a luxury good.
Supermarkets
Food markets weren’t always “self serve” as they are now. A counter used to separate customers from all goods, which were retrieved by a grocer’s assistant, then measured out and wrapped (this still exists at butcher, fish, and deli counters… and bakeries!)
The advent of supermarkets as the most mainstream form of sourcing your food is the result of:
- Automation - in food growing, transportation, distribution, inventory, commerce.
- Efficiency and Scale - supermarkets can serve many in one location and across countries.
- Convenience - consumers can get everything they need under one roof, from one vendor, it became more convenient to buy produce than to grow it.
- Affordability - it became cheaper to buy food at a supermarket than to grow it.
- Shift of risk and responsibility - consumers are responsible for choosing products for their own consumption and for what they do with it after purchase, supermarkets bear the risk of ensuring everyone pays for what they take.
Add An Egg
Unlike prepared food delivery, the activity of cooking isn’t entirely eliminated in the meal kit delivery equation. This brings to mind instant cake mixes.
Instant cake mixes really took off when companies introduced a type of mix that required the addition of a fresh egg (legend has it that adding an egg made consumers feel “less guilty”, whilst others say mixes requiring a fresh egg produced better quality cakes [3]). The rise of instant cake mixes could also be attributed to the decline in exposure to the art and culture of cooking and baking, but it doesn’t detract from the introduction of a convenience product that enabled consumers to still be part of the process.
The scenarios I mentioned earlier are not entirely inconceivable in the distant future, but in the near term, I think it’s hard to imagine them becoming a reality. Meal kit delivery might gain in popularity, but I doubt it will go beyond being a luxury and convenience in the medium term and therefore not go mainstream anytime soon.
Footnotes
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