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Meal Kit Industry Skyrocketing in the Billions

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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.

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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.

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editor

Editor in chief is Linda Hohnholz.

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