Box meals have been the food darling of 2016. More than a dozen national and regional players are shipping millions of boxes a month to time starved, hungry families. And today Blue Apron is valued at $2 billion and is reportedly preparing for an IPO.
But like the disruptors these box meals are to the food industry, they too are feeling the pinch of rapid growth and finicky consumers. Proprietary research has shown that up to 50% of box meal subscriber’s cancel their subscription in the first week and only about 10% of consumers remain after the first six months. The good news is, most top players in the space are well-funded, but the other bad news is most are not yet profitable.
However, despite the facts about high attrition rates, new companies continue to have stars in their eyes as they look at the excitement and investment capital this category is generating. And what this category is seeing is new competitors and new ideas making the Blue Apron and Plated types seem very yesterday.
One of the first new entries expected in 2017 is Habit. This new subscription service backed by Campbell’s Soup is based on the idea of an individualized health review for personalized eating. Your subscription doesn’t start by picking your favorite meal for the week, it starts with basic body data (height, weight, etc.), as well as blood draw that looks at specific health issues and customizes meals for better health. This idea falls closely in line with consumer trends for making healthier food choices and treating food as medicine.
Secondly, is boxes backed by the power of the brand. Peapod has launched a partnership with blogger Gina Homolka of Skinnytaste. The Peapod apple will provide access to online meal kits in their app, allowing consumers to add all the ingredients to the Skinnytaste meal to their shopping cart with a click. This version, although slightly different from Habit and other box subscriptions, still focuses on a meal based solution, convenience and health. And with multiple cookbooks to her credit and over 3 million followers, its clear consumers are hungry for what she’s cooking.
More than 6 months ago we were talking about this trend and how food was moving from the box to the cart. What’s clear is even the biggest disruptors can be disrupted and the space appears to have some additional room for disruption. The biggest question is, are retailers ready to be the new disruptors and take advantage of their brick and mortar power to deliver a similar convenient box experience to consumers that is innovative, healthy, delicious and most importantly affordable.
