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Nielsen has a report about how meal kits in just a few years have “carved out a unique - and profitable - niche in the U.S. grocery landscape. And what’s more, they’re no longer the exclusive domain of innovative start-ups aiming to deliver fresh, time-saving options to time-strapped consumers’ doorsteps.”

Some relevant numbers:

• “In the year ended 2017, in-store meal kits generated $154.6 million in sales, posting growth of more than 26% year-over-year. For context, total brick-and-mortar sales for center store edibles (grocery, dairy, frozen foods) dipped 0.1% last year to $374 billion.”

• “Overall, 9% of Americans say they’ve purchased a meal kit in the last six months - that’s 10.5 million households. What’s more, 25% of consumers say they would consider trying a meal kit in the next six months - that’s more than 30 million households.”

• “Of the 9% of Americans who have tried a meal kit, 6% have purchased exclusively online. And as a result, online meal kit companies are seeing tremendous growth.”

A Nielsen analysis of consumer behavior suggests that “almost 60% say value for the money is extremely important, and almost half (49%) say low-cost items are important. In terms of what they experience across the meal kit landscape, 56% of consumers disagree that meal kit services are affordable for everyone. For retailers and pure-play meal kit providers alike, this insight suggests that they need to clearly articulate the value their offerings provide when pitted against traditional options.

“As retailers look at the potential in the meal kit space, they will need to understand the attributes that customers look for and develop offerings that clearly highlight the value they offer when compared against more traditional offerings.”
KC's View:
I had a chance this week to moderate a panel of millennials at Western Michigan University’s annual Food Marketing Conference, and one of the subjects that came up was meal kits. (For the record, these were all millennials who are employed by retailers or CPGG companies, are motivated and successful, and who in most cases were single and time-constrained. I would’ve hired any of them.)

In the discussion of meal kits, these millennials generally said that they saw them in a positive light, though they had a problem with the subscription nature of many programs - it simply does not give them the kind of flexibility, in terms of timing and menu selections, that they need and want. I don’t think this is unique to millennials, and that greater growth can be achieved by companies that figure out how to shape their meal kits in this direction.