Dive Brief:
- Home Chef, a Chicago-based meal kit maker, is launching a line of kits to be prepared in five minutes, according to Retail Leader. The new "5 Minute Lunches" began shipping last week.
- The salads and sandwiches would require no cooking, can be easily assembled and sell for less than $8. Sample meals include a cranberry and blue cheese chicken salad and a chicken pesto ciabatta sandwich.
- Home Chef also offers 11 different dinner-focused meal kits. Each month, the company delivers meal kits to around 2.5 million customers.
Dive Insight:
Home Chef hopes its new line of lunch options will open up an additional revenue stream and help it stand out in what's become a very crowded industry. The idea is certainly an interesting one, but will consumers, who are certainly not starved for lunchtime options, see the value?
The two sample lunch options released are likely delicious and easy to assemble, but not terribly unique recipes. A consumer may look at these kits online, then turn around and pick up the ingredients at the market to make the recipe themselves — or just pop over to their local deli or supermarket prepared foods section.
Indeed, there doesn't seem to be much of a distinction between the five-minute meals and options to be found at a local sandwich shop. The difference is that customers get to prepare the sandwich and salad option themselves, but will that extra step be seen as a value or as a liability? Meal kit companies have labored to cut down prep times for consumers — to 30 minutes and even 15 minutes in some cases. At the same time, people desire meal kits because there is at least some work involved.
Still, these lunches may find a niche market with workers who don't have enough time to pick up lunch while they're at the office. In this respect, Home Chef was smart to market the kit’s assembly time as less than five minutes. The company will also likely get orders from its existing customer base, who no doubt trust the company's ingredients and culinary expertise.
Home Chef’s dinner meal kit has given it a small piece of the market, reportedly delivering nearly 2.5 million meals a month to U.S. consumers. While that’s an impressive number, it wasn’t enough to crack the top five list for market share, according to Packaged Facts research.
On the upside, there is no one company that dominates the overall fresh food meal kits market. Hello Fresh just debuted its IPO in Germany last week, selling 31 million new shares priced at $11.91 each. Blue Apron, which claims 17% of the the U.S. market, had a 3% boost in sales this quarter, but is also continuing to lose consumers.