Once hyped, the meal kit market—and subscription commerce, generally—appears to have settled down.
According to an April 2018 Market Force Information survey of US grocery buyers, 27% buy prepared food weekly or more, and 92% cited convenience as the reason. Prepared foods was also the top merchandising enhancement for 2018, according to 73.2% of US grocery executives surveyed by Progressive Grocer.
But according to the Market Force survey, only 15% of respondents have ever tried a subscription meal kit service (though that’s up 4 percentage points from 2017). There doesn't appear to be a great deal of pent-up demand, either. In a Q4 2017 IRI survey asking US internet users which shopping activities they planned to conduct in 2018, just 6% said online meal kit delivery services.
The top reasons for subscribing to a meal kit were different from motivations for buying prepared food. According to Market Force, half of those surveyed were adding variety to meal planning and 44% wanted to have a fun experience. Saving time was also important (cited by 41%) but not the primary driver. Just over half were satisfied with their subscription.
When consumers were asked which meal kit subscription service they used, over 20 brands were mentioned, yet the top three—HelloFresh, Blue Apron, Home Chef—accounted for 82.8% of responses. The market has many players; a 3.7% share went to "other," which ranked fourth, but it's dominated by those three brands.
The biggest problem with all subscription services is that it's costly to acquire customers. But most users aren't very loyal, whether cancelling after redeeming a promotional offer or simply getting tired of the products.