How Do Meal Kits Companies Work?

When was the last time you cooked at home? If you live in the city, you might forget you have a kitchen sometimes – or you might not even have a kitchen, depending on the size of your apartment or condo. If you enjoy cooking, what probably turns you away from making a meal from scratch is the time you have available to do it. After all, it can take hours to prepare a dish and only 20 minutes or so to enjoy it. Who has the time to meal prep? Prepping the ingredients is usually the most time-consuming aspect of cooking meals at home. Then there’s the shopping. Who has an hour or more of their day to blow on going to the store to round up ingredients for dinner? It’s so much easier to just order meal kits! But how do meal kit companies work? Let’s explore!

How Do Meal Kits Companies Work?

Meal Kit Subscription Service Explained

If you enjoy cooking, you’ll love what meal kit companies have to offer. Meal kit delivery service companies, like Hello Fresh!, Blue Apron, and other leading brands, provide prepared meal kits with raw, fresh ingredients shipped directly to your doorstep.

Meal kit companies serve 17% of the 25 to 44 demographic in the United States. In 2021, the global market valuation was $15.21 billion and expected to experience a compound annual growth rate (CAGR) growth rate of 17.4% between 2022 and 2030. The online segment accounted for 63.2% of revenue share in 2021.

The meal kit delivery business model comes from Sweden in the late 2000s. It spread through northern Europe with Hello Fresh! and Blue Apron being the two biggest names in the space. The two companies entered the US market in 2021 and continue to grow.

The idea of a meal kit is simple. People who don’t have the time to spend shopping or prepping their meals choose from weekly menu options. Select your menu, and the company delivers all the recipes to your door, complete with cooking instructions. You take two hours or more of shopping and food prep out of your day.

Meal Kits Companies: The Process

Hello Fresh! and Blue Apron, along with almost every meal kit company in the world, operates through a subscription service.

Many brands offer a free week or month of meals if you sign up. You know what you’re getting and what you’re paying for when you sign up for an account. You place your order, receive your food, and pay monthly.

Most meal kit services allow you to customize your subscription and pause it if you go out of town and don’t want food rotting on your doorstep. The pricing from meal kit companies isn’t bad either. If you consider the value of the service, then it’s definitely worth paying a bit more for your groceries through these companies than taking time out of your day to go to the grocery store.

What are two hours of your time worth to you? That’s the real question. In most cases, the cost of a monthly subscription to one of the meal kit services costs around the mid-point between eating out and buying and prepping your food yourself.

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