ROCKVILLE, Md. — The U.S. food and beverage industry has been impacted heavily by COVID-19 as consumers continue to spend more time at home. In 2020, more consumers than ever before were deciding to order meal kits and other food and beverage items online to avoid grocery shopping in crowded stores, where they might be exposed to the COVID-19 virus.
Growth has continued through 2021 as consumers looked to meal kits and grocery e-commerce as a convenient alternative to conventional grocery shopping and meal planning. On Monday, Kroger announced that its meal kit and prepared meal business Home Chef has surpassed $1 billion in annual sales as consumers have looked for more convenient meal solutions during the pandemic.
According to Packaged Facts analyst Cara Rasch, this news about Home Chef is no surprise. “Like other meal kit companies, Home Chef has experienced strong sales gains during the pandemic as people have spent more time at home and looked for variety at dinnertime. As one of the meal kit market leaders, Home Chef has capitalized on consumer trends of cooking and eating more at home to achieve its 118% growth rate for the 2020 fiscal year.”
Packaged Facts’ June 2021 National Online Consumer Survey finds that for those who use meal kit delivery services, the top reasons for doing so are convenience, liking having meals planned for them, and trying something new/changing diet. A large number of meal kit users also report they use meal kits because these products save them time on meal prep.
Rasch notes, “Meal kits represent a value proposition for consumers sick of meal planning or grocery shopping who still want a home cooked meal, as they reduce time spent looking for recipes and buying ingredients.”
Rasch continues, “Pandemic fatigue in 2020 and 2021 has led to many people looking for new options to get a meal on the table. Meal kits are attractive to these consumers because they reduce time spent on planning meals and shopping for groceries. They also eliminate food waste, as all meals contain perfectly portioned ingredients intended for a particular recipe.”
Furthermore, Rasch points out that meal kits have helped some consumers improve their cooking skills during the pandemic as dining habits shifted home. “For those without a lot of cooking skills, meal kits have been a lifesaver in teaching them to cook with simple, step-by-step recipes as they have found more of a need or desire to cook at home.”
Nonetheless, meal kit delivery services are relatively niche. Packaged Facts’ June 2021 National Online Consumer Survey finds that just 11% of consumers report using a meal kit delivery service in the last 12 months. Rasch notes, “While many consumers think that meal kits are too expensive or that a subscription model is inconvenient, opportunities exist to address these customers’ needs via versions that are increasingly available at grocery stores. Kroger’s sales of Home Chef kits in their stores is just one such example. In-store versions are typically less expensive per serving than meal kits sold via delivery services. Plus, they can be purchased on an as-needed basis instead of being planned in advance.”
For more information, see the The Future of Grocery: Online Grocery, Meal Kits, & Direct-to-Consumer Food report. This report analyzes sales trends and opportunities for emerging grocery delivery channels from online grocery sales (curbside pickup, delivery, third-party pickers) to meal kits in their various forms to direct-to-consumer online sales. The report further considers the current and longer-term impacts of the coronavirus pandemic on these modes for purchasing groceries.
Packaged Facts, a division of MarketResearch.com, publishes market intelligence on a wide range of consumer market topics, including consumer demographics and shopper insights, the food and beverage market, consumer financial products and services, consumer goods and retailing, and pet products and services. Packaged Facts also offers a full range of custom research services. Reports can be purchased at our company website and are also available through MarketResearch.com.
