I’m sure that I’m not the only one who’s constantly bombarded with ads for meal delivery services, most of which featuring some college student who is explaining why take-out is so expensive and how difficult it is to cook. I’ve always found these services to be fascinating. They treat eating as though it is a chore, one which some can not be bothered by. They seem to have mechanized the process, and in doing so, have removed all of the romance of food. When I first saw these ads, I was confused. Who on earth could possibly be buying this? However, in the past year, this industry seems to have grown. So obviously they are doing something right… But what exactly is it?
2020 was a great year for subscription based meal services… even if it was a bad year for everyone else. As the world as we knew it shrank and as the pandemic rendered ‘going outside’ into a hazardous experience, the basic trip to the grocery store suddenly became incredibly dangerous and terrifying. Thus, we seemed to rely heavily on online shopping to get the job done. Amazon and other online retailers had an incredibly profitable year, with Amazon boasting a net-revenue that was $10 billion more than it made in 2019. Much like everything else, the pandemic seemed to accelerate existing trends in this market, and it made it clear that online shopping was here to stay.
The meal kit delivery service market wanted a piece of this pie, and wanted to capitalize on a generation of millennials trapped at home and unable to cook. Thus, the industry was able to grow itself during the pandemic, and seemingly permanently solidify their place within our national food consciousness. These companies drove a massive ad campaign through social media sites such as Instagram, in a ploy to target a generation that had typically relied on restaurants and takeout to satisfy their food cravings. These companies knew exactly what these consumers had a craving for, offering a variety of different meals— from chicken teriyaki to cauliflower shell beef bolognese— and allowing consumers the chance to try different things (without ever having to leave their house).
Now, as we enter the dusk of the pandemic, many feel hopeful about this new industry, and project big market gains over the course of the next few years. Some have even stipulated that the meal subscription service industry will be worth over $19 billion by 2027— as it continues to capitalize on intergenerational cravings and the growth of online shopping. However others are skeptical about the growth of this industry, and believe that it may not have enough consumer interest to reach that level of longevity. According to the Wall Street Journal, fewer than 10% of new meal users in the United States remained with the subscription for longer than two years. This means that whatever hype exists around the subscription services in the beginning, seems to dissipate as time goes by. That is a bad sign for an industry that can only grow if it can solidify its consumer base.
So while the subscription meal industry may have enjoyed decent growth during the pandemic, if they want to continue growing they are going to have to continue to innovate and respond to consumer interests. While online shopping may be here to stay, as the pandemic wanes, these meal services are now going to have to compete with restaurants and take out again. That might be a difficult competition to win, honestly. Because who wouldn’t prefer getting their baked penne from the Italian place across the street instead of in a box in the mail?
