Editors' pick: Updated from Nov. 19 with details of PepsiCo partnership
Want food delivered to your door, but you still want to cook it yourself?
Well, two years ago you would be hard-pressed to find another option outside the $3 billion, startup Blue Apron, a company that is reportedly gearing up to take itself public in the coming months. But now the meal-kit delivery industry (yes, it's a thing) is littered with competitors hawking everything from gourmet burger recipes to artisanal Asian cuisine.
"I think meal kits with more niche offerings actually have a better chance of surviving in this market than ones with broader based offerings, assuming they can reach a large enough market which will just take a different approach to outreach," said Bill Bishop, chief architect at Brick Meets Click, a consultancy and analyst firm that focuses on the intersection of traditional and online grocery retailing.
The everything-in-a-box meal kit delivery services have exploded over the years. With Netflix (NFLX) - Get Report a click away and increasingly chilly weather, meal kit services broaden their appeal to consumers who would rather enjoy restaurant-quality meals from the comfort of their home. A report on the meal kit industry by Packaged Facts, a market research company, conjectures that "the U.S. meal kit delivery services market will generate approximately $1.5 billion in sales in 2016 and will grow to a multi-billion market over the next five years."
And now, even big food makers are getting in on the action.
PepsiCo(PEP) - Get Report said Tuesday, Dec. 6, that it has hooked up with online meal kit marketplace Chef'd to deliver three Quaker Oats-branded meals, all featuring the brand's trademark oats as the star. People who order the Quaker Oats-inspired meals receive all the necessary, pre-portioned ingredients and step-by-step instructions for making the meal. The meal kits, which will cost $10 for a serving of two, will also include a mason jar as well as additional oats-inspired recipe cards.
Candy maker Hershey(HSY) - Get Report has also joined forces with Chef'd, and in September launched dessert kits on Facebook Live. Campbell's Soup(CPB) - Get Report is using Ahold Delhaize's (think Stop & Shop) grocery delivery arm Peapod to deliver meal kits that could help someone make a curry sauce from its condensed cream of mushroom soup and a few other basic ingredients.
Experts believe that the newly emerged industry has the potential and power to disrupt the brick-and-mortar restaurant and grocery industries, which have been giving off some warning signs lately due to competitors like meal kit and online grocery delivery services.
While the industry has grown to be a seriously competitive force to be reckoned with, not every single meal kit delivery company will gain a strong foothold in the market.
"The largest companies are likely to go public. There will be some consolidation of smaller marketers as some go out of business due to poor execution, and others are absorbed by mergers and acquisitions," wrote Susan Porjes, senior market analyst at Packaged Facts.
And as Blue Apron, the unspoken meal-kit delivery service leader, tries to deal with its reputation loss after a Buzzfeed News investigation exposed reports of violence and code violations at one of its packing facilities in Richmond, Calif., a proliferation of contenders are jumping on the bandwagon to join what is now a highly competitive meal kit delivery industry.
So who are the players that will help this industry grow, what do they provide and who will be successful? TheStreet takes a look: