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Meal Kits: Incl Impact of COVID-19 - US - October 2020

OVERVIEW
What you need to know
Key issues covered in this Report
Definition
COVID-19: Market context
Economic and other assumptions
EXECUTIVE SUMMARY 
Top takeaways 
Market overview 
Ups and downs for an upstart industry
Pandemic provides a short-term boost
Impact of COVID-19 on meal kits
Figure 1: Short-, medium- and long-term impact of COVID-19 on meal kits, October 2020
Re-emergence 
Pandemic continues to fuel short-term spike
A make-or-break opportunity to drive loyalty
Recovery 
Reframe value
Make kits more social
Make easy an easier option
MARKET OVERVIEW
Ups and downs for an upstart industry
Pandemic provides a short-term boost…
…and an opportunity to bolster long-term loyalty
Financial data from top competitors traces category’s uneven performance 
Figure 2: Select quarterly financial metrics: Blue Apron, Q1 2018-Q2 2020
Figure 3: Select quarterly financial metrics: HelloFresh US, Q1 2018-Q2 2020
Impact of COVID-19 on meal kits
Figure 4: Short-, medium- and long-term impact of COVID-19 on meal kits, October 2020
Re-emergence
Recovery
COVID-19: US context
MARKET FACTORS 
Concern about exposure keeps shoppers online, benefiting meal kits
Figure 5: Coronavirus exposure and lifestyle disruption concerns – any worried, March-October 2020
Desire to limit time in-store benefits kits, both online and in-store
Figure 6: Coronavirus lifestyle changes – Online shopping, April-October 2020
Consumers remain hesitant about eating in restaurants
Figure 7: Comfort level with restaurant/bar patronage – Very or somewhat comfortable, July-October 2020
Growth of online grocery both a threat to and an opportunity for meal kits
Figure 8: Total US online sales and forecast of groceries*, at current prices, 2015-25
MARKET OPPORTUNITIES 
Make meal kits more social
Go local
Offer more customizability
Make easy an easier option
Reframe the value of premium meals
COMPETITIVE STRATEGIES
Overriding emphasis on convenience and discounts
Figure 9: Select meal kit service online ads, 2020
Lower discounts for more differentiated offerings
Figure 10: Select meal kit service online ads, 2020
ShopRite concept could represent evolution of meal kits in-store
THE CONSUMER – KEY TAKEAWAYS  
Current usage rates are low
Enthusiasm for cooking a key meal kit ingredient
Meal kit experience holds potential for differentiation
Exceeding expectations key to overcoming cost barrier
Category’s best users especially focused on cuisine and meal selection
Enthusiastic cooks don’t want too many shortcuts
Breaking reliance on discounts a key challenge for meal kit marketers
MEAL KIT USAGE AND INTEREST
Current usage rates are low, but many consumers express interest
Figure 11: Meal kit usage and interest, June 2020
Usage falls sharply among older adults
Figure 12: Meal kit usage and interest – Any current use, by age, June 2020
Enthusiasm for cooking a key meal kit ingredient
Figure 13: Meal kit usage and interest – Any current use, by cooking enthusiasm and cooking skills, June 2020
REASONS FOR USING MEAL KITS
While time-savings is a given, experience holds potential for differentiation
Figure 14: Reasons for using meal kits, June 2020
Experiential factors especially motivating to younger consumers
Figure 15: Reasons for using meal kits, by age, June 2020
Enthusiastic cooks drawn to meal kits for wider array of reasons
Figure 16: Reasons for using meal kits, by cooking enthusiasm, June 2020
REASONS FOR NOT USING MEAL KITS
Cost remains a key barrier to use
Figure 17: Reasons for not using meal kits, June 2020
Exceeding expectations key to overcoming cost barrier
Figure 18: Reasons for not using meal kits, by previous usage, June 2020
MEAL KIT SELECTION CRITERIA
Better selection could help to shift attention away from price
Figure 19: Meal kit selection criteria, June 2020
Category’s best users especially focused on cuisine and meal selection
Figure 20: Meal kit selection criteria, by cooking enthusiasm, June 2020
DESIRED IMPROVEMENTS AND INNOVATIONS
Customizable meal kits appeal to both users and non-users
Meal kits for one hold appeal among current kit users
Figure 21: Desired improvements and innovations in meal kits, by current or previous usage, June 2020
Enthusiastic cooks don’t want too many shortcuts
Figure 22: Desired improvements and innovations in meal kits, by cooking enthusiasm, June 2020
ATTITUDES TOWARD MEAL KITS
Breaking reliance on discounts a key challenge for meal kit marketers
Figure 23: Attitudes toward meal kits related to value, by current or previous usage, June 2020
Opportunity to elevate the social aspects of the meal kit experience
Figure 24: Attitudes toward social aspects of meal kits, by current or previous usage, June 2020
Leverage enthusiastic cooks’ deeper engagement in the meal kit process
Figure 25: Attitudes toward meal kits, by cooking enthusiasm, June 2020
APPENDIX – DATA SOURCES AND ABBREVIATIONS
Data sources
Sales data
Consumer survey data
Abbreviations and terms
Abbreviations
Terms

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