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Nielsen Examines the State of Meal Kits at the 2019 Annual Meat Conference

Meal kits represent one of the hottest trends in the fresh-focused consumer evolution. As Meagan Nelson, Associate Director, Nielsen Fresh Growth & Strategy, relayed to attendees at the 2019 Annual Meat Conference in Dallas, this fast-paced category continues to evolve in every aspect, from how and where meal kits are purchased to what’s included in the box.

Meagan, alongside Ashli Blumenfeld, owner and president of Standard Meat, and Uwe Voss, chief operating officer and managing director of HelloFresh U.S., led a panel discussion to share insights into the ins and outs of meal kits, off the dovetails of Nielsen’s second annual meal kit survey. The three panelists examined the current market environment, trends, in-store sales performance and consumer preferences. The following themes resonated most strongly with those in attendance:

Omnichannel Meal Kits Growth Is Increasing Rapidly

“Meal kits are no longer a niche offering; in fact, our data shows that 12% of consumers have purchased a meal kit in the past six months, an increase of 33% from December 2017,” said Meagan. “The category has seen sales growth of 36% from 2017, with U.S. penetration up an additional 3.8 million households. In-store purchasing is a key driver, accounting for 60% of this growth.” And growth isn’t slowing: Meagan shared that 23% of consumers say they would consider purchasing a kit in the next six months.

She also addressed the rapid pace of change in this space. “This category is still relatively young in the grand scheme of things. Even in just the last year, the shifts in the industry—including the players involved and where kits are sellinghave been fast paced. As the category continues to evolve and mature, both online and offline retailers need to be nimble.”

To meet growing and diverse consumer appetites, Uwe said that HelloFresh has diversified its meal kit solutions over the past six yearsproducing over 50 recipes per week. The progression over the years has been critical for the company, as Uwe acknowledged the kits HelloFresh sold when the meal kit provider started wouldn’t sell in today’s market.

Fresh Model: In-Store vs. Online

“One of the key aspects of the meal kits category is the fresh aspect,” said Meagan. “Fresh inherently is an area where shrink will always be a concern and critical to profitability, particularly in retail. As kits move in-store, the model shifts. Extending shelf life or any other ways to limit shrink is important for continued success.”

Ashli emphasized that partnership and open communication is critical to Standard Meat’s relationship with HelloFresh. They collaborate to balance what is possible from a cut/portioning standpoint to reduce any issues with leaking and contamination.

Opportunities to Reduce Waste

In the U.K., meal-portioned meat is popular, as it meets more immediate consumption needs, while reducing waste at home. Ashli argued that there is an opportunity in the U.S. to expand this approach as consumers continue to seek out convenient dinner solutions that they can feel confident purchasing without worrying about wasting leftovers.

HelloFresh operates with digital shelves, providing flexibility to the company’s business model that inherently reduces waste. Employees order what is needed to fill deliveries, and they don’t have to keep ‘full shelves’ of fresh goods to meet visual demand.

Meal kits have demonstrated that they are much more than a fad. Their continued evolution bears close watching.

Pictured above from left: Ashli Blumenfeld, Uwe Voss, Meagan Nelson