Why You Should Consider Adding Meal Kits to Your Foodservice Business
Meal kits are big business - Hello, HelloFresh, Blue Apron, Chefs Plate and … your local restaurant.
In early 2020, that year’s meal kit market in Canada was estimated to exceed $400 M. The estimate for the United States required a different letter of the alphabet, at over $2 B. Meal kits are big business, and those numbers didn’t take the full effect of increased demand during the pandemic into account.
Projections show increased growth of this service to over the next few years. If this whets your appetite for a bite of the market, why not step up to the table? While the multinational players in the meal kit industry may come to mind first, there’s no reason that local eateries can’t get a slice (or, more aptly, a sliver) of the pie.
But what are meal kits, anyway, and why are they so popular?
Meal kits contain all of the ingredients and instructions needed to make a meal at home. In essence, they’re prep businesses for the home cook. All the consumer needs to do is follow the instructions on the accompanying easy-to-follow recipes and use their own basic cookware and utensils to create a freshly cooked meal. A modern-age twist on home cooking.
There are many reasons for the popularity of meal kits, such as:
· Convenience and time saving: Busy people don’t always have time to plan meals, shop for ingredients at grocery stores, and prep labour-intensive dishes like a stir-fry, even if they fancy themselves a home chef. With a meal kit, they just have to order ahead, open a box, and put together a meal in as little as 30 minutes.
· Culinary exploration: Meals kits offer the home chef a culinary package tour of many recipes and cuisines they might otherwise not try. With professionally developed and tested recipes and instructions, success is all but guaranteed.
· Diminishing food literacy: Many people don’t have the basic food literacy than previous generations acquired growing up. They may not know how to cook and are therefore more likely to lack the skills (and equipment) needed to properly prepare and cook meals.
· Health and wellness: Consumers with dietary and wellness needs appreciate how specialty meal kits help them stick to their eating goals. They look for a wide range of options, like low-calorie meals, organic ingredients, vegan or vegetarian options, gluten-free foods and more.
· Less food waste: Food waste is a huge issue in North America. Many consumers don’t want to buy ingredients just for a single recipe they may never make again. And, they’re tired of finding costly science experiments in the back of the fridge.
· Pandemic concerns: Consumer hesitancy about on-premise dining is expected to linger after pandemic-related restrictions ease. Some people feel safer cooking food in their own home as opposed to getting ready-to-eat food delivery.
12 Reasons to Add Meal Kits to Your Existing Foodservice Business
If you’re considering a meal kit service as an add-on to your existing restaurant or food truck business, think of it as taking a “kit” approach. You already have the facilities (maybe even including a prep kitchen), equipment, labour, a delivery service, and an established brand — why not take advantage of that infrastructure and add on another component?
During the pandemic, many restaurants made the snap decision to begin offering meal kits as a means to financial survival. Now they may be considering whether to maintain that part of their operation when restrictions ease (hint: their meal kit customers might be disappointed if they stop). Other restaurateurs may be taking a more considered approach to getting into a meal prep business.
Either way, here are a dozen reasons to add meal kits to your business.
1. Increased Revenue
The demand for meal kits is proven. If your concept lends itself to the kit format, why not take the opportunity to bring in more revenue?
2. Diversification of Revenue Streams
When pandemic restrictions slammed the restaurant industry in March 2020, many full-service restaurants offered only on-premise dining. They quickly learned the importance of diversifying revenue streams. Having an established variety of revenue streams could help your establishment weather both the normal slow times and the next crisis.
3. Optimize Your Existing Inventory
Creating meal kits that use ingredients you already have on hand for your in-house menu helps you optimize your inventory and reduce waste.
4. Job Satisfaction for Skilled Staff
You already employ skilled staff and they’ll appreciate new opportunities for challenge and growth. For instance, adding a meal kit service can provide additional leadership opportunities. Or someone on your front-of-house staff who’s a writer may jump at the chance to translate your chefs’ creations into easy-to-follow recipes.
5. Increase Creativity
Figuring out how to create meal kits that fit into a box gives your staff a chance to think outside the box. Whether transforming menu favourites or developing new recipes, a meal kit service provides new creative opportunities to your team.
6. Try Out New Ideas and Concepts
Your meal kit service may be a way to bend your brand a bit. For instance, you could transform a popular entrée from your restaurant menu into a soup or salad kit. If you’re known for your roasted chicken, consider trying out other preparations, like taking it global with new seasonings and sides. If the meal kit proves popular, why not feature that dish on your regular menu and see how it goes over there?
7. Consistency through Subscriptions
Business can ebb and flow. Offering a subscription-style meal kit service can help you stabilize revenues, improve staff scheduling, and make inventory planning more efficient. You can also manage delivery costs better if you’re encouraging customers to order several days’ worth of meal kits at once.
8. Customer Engagement
Customers like options. Sometimes they like to linger over a meal in a restaurant. On those hairy days, they want ready-to-eat meals via takeout or delivery. And at other times, they want to cook at home without all the fuss. Why not offer them the option of making the meals they already love at your restaurant in their own kitchen? It’s another reason for them to think of you first.
9. It’s Good to Be Green
The increased use of single-use packaging is a common criticism of all off-premise dining models. Look for ways to help your customers reconcile their commitment to being green with their hunger for convenience. Many sustainable packaging options are available. Consider offering a discount or reward for anyone who opts for pickup with reduced packaging instead of delivery. You could even offer to pick up and recycle clean used packaging with regular subscribers’ next delivery.
10. Community Support
Your meal kit service can be a way for you and your customers to support your community in need. For instance, each month you could provide meal kits to local shelters or food banks based on sales, or offer customers the opportunity to donate a featured meal kit to those in need.
11. Support Customers’ Health and Wellness Goals
Make sure you offer meal kit options that support customers’ health and wellness goals. Your famous triple cheese mac ‘n cheese may be splurge worthy for the occasional meal out, but health-conscious people who are regularly using your meal kits at home will appreciate a lighter version.
12. Grow Your Clientele
Some people who use your meal kit service may never have been a guest at your restaurant. If they’re wowed by your meal kits, they just may make a reservation with you when they decide to eat out.
Starting a Meal Kit Service from Scratch
Given the popularity of meal kits, some entrepreneurs may be considering venturing into the foodservice industry by setting up a standalone meal kit service. For chefs, this could be a way to start a viable foodservice business without the higher overhead of opening a restaurant. For instance, instead of investing in their own premises they could rent a commercial kitchen or arrange to use a restaurant kitchen during off hours.
As for any new business, doing your research and developing a comprehensive business plan is a necessity. Some of the components of a business plan are:
· Business model: selling directly to consumers or supplying large meal kit vendors
· Niche: health and wellness, gluten-free, vegan, comfort food, culinary etc.
· Target market: local, regional or national
· Target consumer needs analysis
· Competition analysis
· Delivery logistics: pick up or delivery
· Legal: licences, permits
· Financial: start-up funding, capital and operating costs, profit margin
· Supply chain
· Marketing plan
Whether you are starting a meal kit business from scratch or adding on to your existing foodservice operation, prepare to succeed.
Written by Marlene Cornelis