Online meal kit delivery services are comprised of new innovative means of delivering food while, at the same time, affording the customer more convenient ways of preparing meals at home. These services are designed to eliminate the hassles of meal planning and grocery shopping, recreating the restaurant eating experience at home. The fast-growing niche market of online meal kit delivery services has continued to expand ever since its introduction in 2012. Meal kit revenue worldwide is expected to grow to over 17 billion U.S. dollars in 2023 and is forecast to exceed 25 million by 2027. As people tried to avoid shopping in-store in the midst of the coronavirus pandemic, online meal kit delivery services increased their market penetration, and food shopping started to steadily move into the digital domain. However, as of July 2021, only a minority of U.S. consumers frequently ordered fresh food meal kits to cook at home.
Soaring sales, thriving companies
Top competitors within the online meal kit delivery industry include HelloFresh, Blue Apron, Home Chef, and Sunbasket. Berlin-based company Hello Fresh was the most popular service provider in the United States, accounting for more than 70 percent of the meal kit market in 2022, and with over 3.2 billion euros in U.S. revenues. In 2021, Blue Apron generated sales worth almost half a billion U.S. dollars worldwide. The average price per meal kit for Blue Apron was 9.99 U.S. dollars and 8.99 U.S. dollars for HelloFresh in 2021.
While Blue Apron operates exclusively in the United States, HelloFresh's global reach has definitely contributed to its market position and large customer base. From about 170,000 subscribers in 2014, HelloFresh now boasts more than seven million subscribers around the world, with global revenues reaching six billion euros. The company delivered over 20 million orders worldwide for the first time in the final quarter of 2020. Its impressive growth over the years may be due to its soaring marketing expenses, which have remained well above 250 million euros per year between 2018 and 2020.
Still a niche habit
Apart from fostering the habit of cooking at home as an alternative to fast-food meals on the run, most service providers also offer family-friendly and specialty diet options with plans for organic, vegetarian, and vegan meals. However, a major drawback of online meal kits is their high cost. According to a survey conducted in May 2020, around 13 percent of high-earners in the United States planned to increase spending on meal kit delivery services as a result of the coronavirus outbreak. However, people earning less than 100,000 U.S. dollars in yearly income were much less likely to do so, evidence that meal kit delivery services still have many hurdles to overcome in order to gain mainstream popularity.
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