NEW YORK— Pre-packaged meal kits have been in a growth pattern for several years and have become a $1.6 billion dollar industry, according to research firm Packaged Facts, fueling a cookware and kitchenware sales opportunity.
With brands such as Blue Apron, Hello Fresh and Plated growing in recognition and more than 150 other national and local meal kit companies, consumers are turning to the products for a number of lifestyle reasons. The meal kits offer convenience as products are pre-measured and delivered; allow consumers to expand their recipe arsenal; take the fear out of cooking for oneself or a family; and teach new techniques.
Cookware vendors that spoke to HOMEWORLD BUSINESS® noted that while it is challenging to monetize cookware sales directly from the use of meal kits, the growing return to the kitchen from the use of the products is one that could lead to growth in the industry moving forward, especially from Millennial consumers and working professionals with young families, which some meal kits are geared towards.
“The use of these kits should lead to some open stock sales going forward. Consumers are going to be looking for functional pieces to create the recipes within their kits and specific recipes are going to call for them to purchase cookware,” said Bobby Griggs, vp/Hammer Stahl. “Consumers are becoming more appreciative and welcoming to all styles of cookware now more than ever and this may be a piece of what is driving that.”
While meal kits may not lead to constant growth in the industry, Al Muto, general manager of Maker Homeware, echoed Griggs’ sentiment and explained that the growing use of meal kits— whether consumers just test it out or stay with it for months— has the potential to spur cookware and kitchenware sales to younger customers that are just starting out and are cooking on their own.
“The kits might encourage beginner cooks to purchase more pieces, but the general graduation of purchasing patterns— and as consumers become more settled and more secure, they are more willing to invest in cookware— will likely remain relatively unchanged,” he said. “But companies may consider offering smaller basic sets of commonly used items.”
Griggs also explained that meal kits are getting home chefs and busy consumers excited to get back into the kitchen and create meals at home, either for themselves, their children or their friends.
“Services like Blue Apron and Hello Fresh are exciting for consumers and are getting them excited to cook and use their cookware because it’s not as daunting for them to create a meal,” he said. “It has expanded the concept of farm-to-table and has given consumers more access to food, ingredients and knowledge of how to create quality meals.”
According to vendors, younger Millennials have been a challenging group of consumers to pin down when it comes to sales and marketing initiatives. While some have married and have young families, it has taken them longer than past generations to do so. Those who have not settled into homes of their own are living in more urban areas, in smaller dwellings and are eating out more often.
However, meal kits have spoken to Millennials who want to be able to make gourmet meals at home. This is a trend that Jeff Malkasian, vp/Clipper Corp., has noticed as meal kits become increasingly known and talked about in the marketplace.
“There are several primary benefits to these services. The first is ease. The second is a social aspect. It is easy and exciting to get the delivery and cook together. You can talk to friends about the meals since they might be cooking the same thing the next day in their delivery. Finally, there are time savings. You don’t have to go shopping and since there are exactly the proper amount of ingredients, and it eliminates waste and extra calories,” Malkasian explained.
Griggs also noted that there is another layer to the use of meal kits that tap into the Millennial market— the ability to share their finished meal on social media outlets.
“It’s not just a family affair, but it’s increasingly becoming a communal affair,” he added.
Both Griggs and Malkasian explained that while meal kits usually call for basic cookware that many consumers already own, the interest that is being generated in these meal kits shows the overall housewares industry that there is an up-and-coming consumer who has a sophisticated palette, wants a variety of flavor profiles and isn’t afraid to take risks in the kitchen. These factors can push the industry forward as consumers continue to become more adventurous with their meals.
“My expectation is that as more people are cooking due to the meal kits, that they are more open to learning about different cookware. This makes it easier to recreate or build on a dish down the road. That is where people will start to look for better cookware options,” Malkasian said.
Griggs added, “People are going to want an authentic experience in the kitchen and as they expand their skills, they will want the right cookware to go with it. These factors, along with the social aspect, will combine to create cookware sales as long as companies are responsive to consumer demand.”
A Fresh New Landscape
While meal kits do carry the potential to change the landscape of the cookware segment, including sales of more basic cookware as open stock items, there are also instances in which it could stall growth. One of the reasons growth may not be as significant as the housewares industry hopes could be the retention rate for those who subscribe to meal plan kits. Those who subscribe to meal kits, said vendors, are able
to learn how to make the items and then can recreate them later on using products they purchase from their own grocery stores. Additionally, meal kits don’t allow for the flexibility to eat out on a whim as the ingredients are fresh and need to be used as soon as possible.
“For a family that is always on the run, these kits might not be feasible time-wise, even if they want to cook more. However, if there are times when these kits are usable, or if they are designed that the meal could be made in advance to fit around a busy schedule, the ease and convenience could indeed mean more home cooked meals as opposed to takeout or eating out, especially where there is a desire to do so. One other consideration is that these meals could also be financially prohibitive. Cost can be as much or more than eating out would be,” explained Maker Homeware’s Muto.
Additionally, said Clipper’s Malkasian, cookware companies should identify marketing opportunities and leverage their expertise when it comes to reaping the benefits from meal kits. He said that housewares companies that are looking to capitalize on the trend need to move quickly to take potential market share as well as create more brand awareness.
“If manufacturers can find a synergy with this form of commerce, it could open a new channel within e-commerce to capture the consumer that is shopping online while exposing them to a cooking school concept and to new tools for the home,” Malkasian said.
For instance, meal kit brand Blue Apron has curated products for its customer base online in the marketplace section of the website. Those who are new to the Blue Apron program or are returning to pick their menu for the week can also browse the selection of cookware, bakeware, kitchen tools and more to add to their experience.
“Now, the brands are perceived as experts and people will purchase the products that they recommend to enhance their experience,” said Malkasian. “It is a natural fit for cookware and kitchenware manufacturers to tap into these services as an extension of e-commerce.”
Beyond The Basics
While meal kits have hit a sweet spot in the market, vendors believe that the meal kit industry will have to go beyond the basics in order to continue to gain market share. “I want to know how they are going to keep consumers excited,” Malkasian said.
While Blue Apron has dabbled in wine pairing subscriptions and Hello Fresh has used the celebrity chef Jamie Oliver, who is focused on healthy eating, to boost its brand profile, there needs to be a plan to gain new customers as well as retain current ones.
“The meals need to meet a common denominator, so they call for a fry pan and saucepan. In Blue Apron, sometimes they call for non-stick and sometimes call for natural finish pans. But they are using pieces that most people own. The meals don’t require trying a pressure cooker, for example. Perhaps that could be phase two as these services mature. They are, in a way, acting like a cooking school,” added Malkasian.
To their credit, meal kit companies are on their way to continued growth by developing marketing and branding extension plans of their own. All-natural meal kit creator, Sun Basket, announced a partnership with Williams-Sonoma that would give subscribers more than $60 worth of kitchen tools in their first kit (see story, page 34).
Cookware vendors conclude that whether meal kits continue to take off or not, those consumers that have tried them will be more apt to continue cooking at home.
“After trying it, people are going to be less afraid of cooking and think, ‘That’s simple. I can easily shop for that and make it myself,’” Muto said. “This simplicity makes it easier for those who either don’t know where to start cooking, or those who may want to cook but don’t want to have to put the thought into planning the meal.”