Up until a few years ago, meal kits were an unfamiliar concept. Now, companies that sell them are making headlines.
Blue Apron went public in June, and after a rough few months, the company announced that it will lay off 6 percent of its workforce. Grocery giant Albertsons is acquiring Plated. Even Kroger is experimenting with selling meal kits in stores.
Atlanta-based PeachDish launched its meal kit in 2014, and from 2015 to 2016, it grew revenue by more than 400 percent. It now has subscribers all over the U.S., with its top markets in Georgia, Florida, Texas, New York and California.
Judith Winfrey, co-founder and president of PeachDish, spoke with Crain’s Atlanta about the meal kit market. Since 2008, Winfrey and her husband have co-owned Love is Love Farm, a certified organic farm. Before working at PeachDish, Winfrey served as chief operating officer for Resurgens Hospitality Group.
How will the meal kit industry grow its customer base?
It’s such a new market. The industry has only been around in the U.S. for four years, tops. I think growing the customer base to this point has been a fairly natural process. Just as people learn about meal kits and get interested in it, they want to try meal kits and so they look for one that resonates with them for whatever reason. Some meal kits are going to compete on price, and some meal kits are going to complete on a niche diet and then other meal kits like ours are competing on farm-to-table and quality, fresh ingredients. It’s an interesting space to be in because it’s just continuing to grow at this point. I don’t think we know what the limits of it are. I think we know that meal kits as a whole have tapped into about 1 percent of the eating population in the U.S., and we expect to see that grow for the next five years …
That said, there is an awful lot of competition out there in the space right now. Now more than ever, it’s important for meal kit companies to really be values-based and to have principles behind what they’re doing because food is incredibly intimate. It’s really important. It’s the only thing you ever buy that literally becomes who you are, and so I think customers can tell after a while if a business is just trying to grow as rapidly as possible to take their business to an [initial public offering], to make a bunch of money and cash out vs. a business that’s really trying to feed high-quality food.
What can the meal kit delivery industry do to make sure that this isn’t a passing fad and that it continues to grow?
What the meal kit industry has to do to make sure that it’s not a fad is make sure that it’s solving problems for consumers and that it continues to be convenient and interesting and fun. It needs to continue to provide not just the convenience of food delivery, but also the value of experience and enjoyment of doing something with your hands, with your brain that isn’t screen time. I talk about that a lot because we really believe it’s important. Even if we just give you 30 to 45 minutes at home with a friend or a family member or a loved one, where you’re doing something and you’re together in that space doing something, it’s a valuable service. We need to make sure that we’re continuing to offer valuable things like that to our customers and that they appreciate it.
Do you think this is how more people will cook going forward?
Yeah, I do. I think that because it’s convenient. ... Something that you don’t hear about that often, that I think is really valuable about the service, is it solves a food waste problem, too. We save you from wasting time. We save you from wasting food. We provide you the convenience of home delivery and something interesting and new to do, so there’s a little bit of an entertainment factor.
How does it solve food waste issues?
Everybody talks about the extra packaging involved in meal kits, but there’s a lot of packaging involved in moving food around that you don’t see as an end consumer when you buy something at the grocery store, so I’m not convinced that there’s really that much more packaging involved. It’s just that the consumer comes face to face with it in a different way. Drive behind a grocery store and take a gander at all the deconstructed packaging that’s out there. That’s one thing that I think needs to be talked about. At the same time, I think that’s one thing we need to innovate on and keep pushing to get better and better.
But then on the food waste side, you get exactly what you need to create a recipe. And I can let you do interesting and, in some cases, exotic ingredients that are not easy to find and you just get what you need. You don’t have to worry about a partially used liter of fish sauce that’s in your refrigerator that you’re going to be trying to cook with for the next five years. That’s how we sort of solve for food waste.