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Straw polls of colleagues are unreliable indicators of public opinion. So it proved for Lex with meal kits. Convenience-minded home cooks pay start-ups to deliver these packets of ready-prepared ingredients and recipe cards.
Lex’s London curmudgeon said: “I assemble my own meal kit in a supermarket shopping trolley.” A thrifty New Yorker reported: “I cancelled Blue Apron but kept the recipe cards.” And our writer from Italy, a country famed for its home cooking, asked: “What is a meal kit?”
Meal kit companies were assumed to be one of the pandemic’s fads. A 99 per cent drop in the shares of US-listed Blue Apron and its $62mn loss in the last quarter might appear to confirm that.
But Germany’s HelloFresh reported decent numbers this week. It shipped 254mn meals in the second quarter. While that was a 6 per cent drop on the previous year, customer loyalty and a lower marketing spend lifted adjusted profits by €46mn to €192mn.
HelloFresh focuses on value for money and has garnered huge market share, estimated at about 70 per cent in the US. It is pushing into the territory of food delivery companies such as Uber, with ready-made meals that need only be reheated.
The trend of “restaurant at home” kits is helping to lift the sales of niche vendors, dividing the market between premium and value.
Penetration in Mediterranean countries is admittedly low. Even here growth is expected in Italy and Spain. A compound annual growth rate of 20 per cent is likely for meal kit companies over the next five years, thinks Euromonitor.
Britons used to joke that their culinary TV show Can’t Cook, Won’t Cook had an Italian counterpart called Can Cook, Will Cook. But business data provides a clearer reading on lifestyle trends than pub quips or straw polls. Fast-food chains, another indicator of demand for dining convenience, have been expanding solidly in Italy and Spain.
Meal kit companies have a good chance of following in their wake.
The Lex team is interested in hearing more from readers. Please tell us what you think of meal kits and the companies that provide them in the comments section below