Blog

What does meal kit industry mean for QSRs?

Do meal kits pose a threat —short- or long-term — to QSR popularity and profitability?

January 17, 2018 by Darrel Suderman — President CEO, Food Technical Consulting

Meal Kits can be defined and categorized several ways, but basically they represent pre-packaged, portion-controlled meals that are assembled and prepared before reaching the customer. Companies that sell them market various characteristics about them, hoping to get a leg up on competition, including that posed by the QSR sector. 

Marketing differentiation points for this sector include "20-Minute Meals" [Hello Fresh], reduced prep time [Hello Fresh] as well as easier and more expeditious "cook-time" recipes with minimal clean-up. 

But as we're all aware that here in the U.S. particularly, the competion between big box stores, retail grocers and convenience stores is fiercely competitive with all the players operating with low profit margins, while generally vying for the same customers and suppliers. In other words, meal kits are in "competitive play" now, so differentiation is critical and involves everything from convenience packaging, make-up recipes, quality, extended shelf-life, portion size and use of in-store resources.                                                                                                                

Pre-prepared meals: Pros and cons

Meal kit food is generally prepared in company kitchens, and either sent out fresh or flash-frozen to retain nutritional value. Customers know that they are eating healthful portion sizes and that the food has been prepared accurately, so this is an ideal option for those seeking to send meals to loved ones.

Some meal plan companies have options specifically for older adults who wish to live independently as well as for those with temporary needs that make cooking meals tough, like new moms and those who, for instance, are recovering from surgery or a broken limb. 

Pre-prepared meals are not for everyone, however. If customers are looking for specific dietary requirements, particular care must be taken before enrolling in such plans because, while some meal kit brands offer options like gluten-free, vegetarian or low carb varieties, not all do. Recipes must be scrupulously reviewed and for those with severe food-related allergies or intolerances, pre-prepared meals may not be ideal.

The mixed approach meal kit brands 

On the other side of the meal plan market are the companies that deliver fresh, seasonal ingredients alongside recipes. Customers still don't have to worry about planning or shopping for healthy meals, nor even parts of the preparation, since often that is completed before delivery.

But cooking these products is still all performed in customers' kitchens and that has advantages. For instance, it's far easier to just bypass ingredients you don't like or don't tolerate well in meal kit instructions. Likewise, customers are also learning new recipes and cooking techniques, while also enjoying the fruits of their "partial" labors.

Meal plans are available to bring customers everything from main course meals to smoothies. In October of last year, Bloomberg reported that the leading companies in this game currently include Blue Apron, Hello Fresh, Amazon and Plated, which was purchased recently by Albertsons, as a few examples.

Are meal kits 'movin' in' on QSRs?

I continue to believe that some meal kit brands will end up establishing firm footing in food service over time, albeit with a few blunders. That's why I also feel that in order to stay competitive with these players on the field, QSR restaurants must remain laser-focused on  maintaining the quality, creativity and affordability of their food.  But I think it might also be worthwhile to include a fresh look at commissaries that prepare QSR branded food for restaurants and groceries.

Globally, major international companies like Whole Foods, Albertsons, and others are, in fact, investing in meal kit programs. And some of those larger concerns certainly have deep pockets. How deep remains to be seen, as well as whether these new contenders in the food service field will truly pose a challenge or any substantial problems for quick-serve concepts.