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Give Me a Break: Break Me Off a Piece of That…Meal Kit?

Short on time and patience, consumers are jumping on the bandwagon of meal kits and meal kit delivery services, which have taken the retail food industry by storm.  Meal kits and meal kit delivery services – such as, PlatedBlue ApronHelloFresh and Purple Carrot – are all the rage these days primarily due to their convenience, healthier food and beverage options, and price points. Meal kits and meal kit delivery services provide subscribers with pre-measured, packaged and fresh ingredients along with straightforward, simple to follow recipes that make whipping up a nutritious meal as easy as child’s play. These services have effectively altered consumers’ idea of convenience, and carved out a niche market within the retail food industry to the tune of potentially $35 billion by 2025. By giving consumers exactly what they want – flavorful meals that don’t require much forethought or time spent within a grocery store – these services are leaving restaurants and grocery stores alike to wonder whether they are on the verge of becoming passé

One of the key factors driving the success of meal kits and meal kit delivery services is convenience.  Subscribers of these services are often individuals who know their way around the kitchen and want a fresh, home-cooked meal, but lack the time to go grocery shopping on a daily basis. Through the use of websites and other technology, these meal kit services have streamlined the meal preparation process and become a more than viable middle ground between sit-down restaurants and take-out orders. Another factor catapulting the success of these services is freshness. With a consumer base hyper-focused on healthier, fresher options, the farm-to-table philosophy of these meal kit services greatly appeals to consumers looking for unprocessed food. Since these meal kit services’ favor local, farm grown ingredients for their menus, partnerships between these meal kit services and local farmers have increased exponentially over the past few years and generated farm-fresh specialty ingredients specifically grown for and tailored to these services’ menus. This symbiotic relationship has been beneficial to the meal kit companies and local farmers since meal kit services are able to acquire fresh produce at a lower cost than grocery stores and local farmers can expect predictable demand for their crops.

At a time when much of the retail food industry is struggling to stay above of water – evidenced by the demise of many fast-food chains and grocery stores – meal kit services have gone from relative obscurity to a multi-billion dollar goldmine.  And, this success has not gone unnoticed. In fact, Whole Foods has decided to throw its hat in the ring and join forces with an enterprising start-up, Purple Carrot, to roll out plant-based meal kits in its stores. Faced with declining profits and the closure of some of its brick and mortar locations, Whole Foods, in a calculated leap of faith, is hoping that this partnership will reinvigorate its target customer base. At the same time, Purple Carrot hopes that its partnership with Whole Foods will give it additional visibility and the opportunity to become a household name in the meal kit industry.

Given the impressive metrics of the meal kit industry to date, it certainly has the potential to upend restaurants and grocery stores in terms of revenue. This impressive tour de force by meal kit services has caught the attention of traditional food industry juggernauts, such as Tyson Foods and Martha Stewart, and has prompted many to believe that meal kit services have staying power and should not be considered just another fad in the retail food industry.

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Marvin Ciné is an associate in the firm’s Real Estate group. He advises real estate owners, developers, investors and financial institutions on commercial real estate transactions, including acquisitions, dispositions, leasing and financings.

Prior to joining Goulston & Storrs, Marvin was an associate at an international law firm in Boston.  During law school, Marvin participated in the Resilience Advocacy Project where he mentored and provided legal services to low-income children and youth.

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American and international retailers turn to Matt Epstein for business and real estate law advice. Matt has coordinated the national roll-outs of stores for numerous retailers including J.Jill, J. Crew, kate spade, Tory Burch, Betsey Johnson and Swarovski Crystal, including the negotiation of leases at regional malls and urban locations. Matt has over 25 years of experience in a wide range of real estate matters.

Prior to joining the firm, Matt clerked for the Honorable Morey L. Sean, Federal District Court, Eastern District of Louisiana. He is a Director and a Co-Chair of the firm's Retail, Restaurant & Consumer group.