A Celebrity, an Internet Billionaire, and a Unicorn Walk Into the Room

via AndNowUKnow produce industry news

via AndNowUKnow produce industry news

 

It sounds like the opening of a bad joke. Instead, it’s a scene that’s playing out behind the scenes in the meal kit delivery business.

The celebrity
Beyoncé’s got one. So do Cindy Crawford and Gwyneth Paltrow. TV chefs Alex Guarnaschelli, Adam Richman, and a slew of lesser-known alums from shows like Top Chef, The Chew, and Chopped are lending their names and talents to meal kit services. The real stunner is cookbook author and food activist Mark Bittman, who recently stepped down from the plummiest of gigs as a lead food columnist for The New York Times to devote himself to The Purple Carrot, a plant-based meal kit company.

The billionaire
Technology-focused venture capital and private equity investment firms like Accel Partners, Lowercase Capital, and Bessemer Venture Partners have found success by buying into the startup sector of the moment. After getting in early on companies like Uber, LinkedIn, Skype, and Pinterest, they’re pulling out their checkbooks for a piece of the subscription meal business.

The unicorn
Blue Apron and Hello Fresh have already reached unicorn status, and Plated isn’t too far behind. So-called unicorns are the rare startups that, based on fundraising, are valued in the private markets at more than $1 billion. Within the subscription meal kit sector, the designation is hardly the stuff of myth.

What’s in the box (or bag, or basket, or cooler, or crate)?
Menus and pricing structures vary, but all of the meal kit delivery services bring pre-planned menus, prepped and portioned ingredients, and step-by-step instructions. A shipment could bring little screw-top jars filled with pre-measured quantities of vinegar, olive oil, harissa, and crème fraîche. Tiny bags will each contain a teaspoon or two of dried herbs and ground spices, or maybe a clove of peeled garlic or a few sprigs of fresh herbs; larger bags hold greens and grains and pan-ready meats and fish. You”ll do some chopping and sautéing, maybe stuff a squash or mix up a spice rub, but you won’t have to search for recipes, run to the supermarket, or buy an entire jar of black sesame seeds or pomegranate molasses because one recipe calls for a couple of tablespoons.

Meal kits hit the sweet spot for dinner at home on a weeknight.
The goal is a meal that’s better than heat-and-eat prepared food, healthier than takeout, more convenient than scratch cooking, and less expensive than restaurant dining. They’re competing with takeout and fast casual restaurants, the prepared foods available in supermarkets, and the booming category of home-delivered groceries and restaurant meals, which has spawned a few of its own unicorns like Instacart and Delivery Hero.

It’s a niche business with plenty of subdivisions.
You can recreate favorite restaurant dishes at home (Din, Plated, ChefDay!); improve your nutrition (Lighter); whip up a superfood smoothie a day (The Greenblender), eat like a Southerner (PeachDish ) or like you live in New England (Just Add Cooking). There are meal kits for vegans and vegetarians, carnivores, pescatarians, and omnivores. You can follow a gluten-free or Paleo diet, ban all GMOs from your kitchen, or keep kosher.

So many meal kit companies! Billion dollar valuations! Still, most of us don’t know anyone who uses them. 
So far the meal kit business is serving mostly young urbanites, but the market is plenty big: Blue Apron alone ships 3 million meals a month. Millennials already spend more on food outside the home than any other generation, and if they continue their spending patterns as they mature into higher income brackets, they’ll be dropping an additional $6 billion yearly into foodservice.

As a group, the under-40 crowd cares more than their elders about what they eat, where it comes from, and members have a healthy disdain for processed foods. They have broad, adventurous palates and were raised on a steady diet of TV cooking shows. Meal kit delivery services tap into all of that plus there’s an appealing technology component with most transactions taking place through mobile apps. For now, capital continues to flow freely to startups, and every day seems to brings a new meal kit service catering to young would-be cooks who aren’t quite ready to take off their training wheels.

 

 

One Response to A Celebrity, an Internet Billionaire, and a Unicorn Walk Into the Room

  1. Doug says:

    i think we all need to group together into big houses, grow food in the backyard, create our own religion, and build spaceships.

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