Doug Sutton is president of Steritech, a North Carolina-based company that conducts food safety and service excellence assessments for a range of industries, including hospitality, restaurants, grocery and convenience stores.
Meal kit delivery services have exploded within the food industry over the past few years and have made significant impact on consumers, investors, and large strategic players alike — increasing the competition and propelling the meal kit industry forward with no signs of slowing down. According to one recent poll, nearly 20% of Americans have at least tried a meal kit. This is not surprising, and the volume of customers demonstrates the incredible promise and room for growth within the space, especially now that meal kits have expanded beyond warehouses and are now offered at grocery stores, prepared either in-store or by third-party partners.
However, the industry is at the same time battling a high unsubscribe rate as consumers may cancel their subscription after a handful of kits are received. Some major players saw a downturn in sales at the end of 2017.
What’s behind these numbers? Could the burgeoning meal kit industry turn around this decline by sharpening its focus on quality assurance and safety?
Diving into the perceived problem
Research in 2017 conducted by Morning Consult showed that of those consumers who had subscribed to a meal kit service, 39% abandoned the service after just one try. However, by the six-month mark, retention was down to a single digit — just 9% of users continued using the service longer than half a year. Why are consumers fleeing meal kits, and can any of these reasons be prevented?
Food safety issues abound
The answer may be in eye-popping research presented by a Rutgers University professor at the 2017 Food Safety Summit held in May 2017. After a comprehensive study that included research on 169 meal kits, Professor Bill Hallaman unveiled that meal kit services had some serious food safety issues. His research backed it up — there were temperature-control violations, labeling problems and packaging issues. The U.S. Food and Drug Administration hasn’t yet weighed in on food safety guidelines for meal kit companies, leaving these rapidly growing businesses to determine their own standards, with consumers bearing the potential risk.
There are many factors that may lead to poor consumer perception of a meal kit and its value. For example, sloppy and/or crushed packaging or poor labeling may impact a consumer’s trust in the company and quality of ingredients. Beyond consumer perception, this becomes a food safety issue, as crushed packaging could mean commingling of ingredients — e.g., meats leaking onto ready-to-eat foods, or allergens potentially contaminating other foods.
Insufficient packaging and cold chain management can also yield temperature control issues, a serious food safety risk. Since many shipper contractors claim that cold chain issues are not their responsibility, the cost burden of replacement and or any liability issues falls on the meal kit provider, not the shipment provider — not to mention the brand damage that may be done in the consumer’s mind.
Quality assurance issues can also impact consumer perception. If a meal kit is received and an ingredient is missing, or a different recipe is mistakenly included in the kit, this will result in a frustrated consumer who cannot utilize the kit for their meal. Missed or late deliveries are not only an inconvenience, but due to cold chain issues, may cause food safety transgressions that can put your customer at risk.
These types of quality and food safety issues can convey a sense that the food kit company doesn’t really care about its customers. And if a customer feels that you don’t have their best interests at heart, aren’t delivering the product promised, or aren’t keeping their safety in mind, they won’t be willing to pay for your service, no matter how much agony over meal choices or time it is saving them.
A quick scroll through recent social media can put a voice to the aggravation that customers feel when these quality and food safety issues occur. Here are a few samples that we saw with a few simple searches:
“Our box arrived two hours late.”
“This box was shipped over a week ago and just arrived today.”
“My box did not arrive as scheduled. This relationship is not off to a great start.”
“Got my first box and the shrimp package was soaking wet and bag ripped. Awesome.”
“Try one of those meal boxes, they said. You’ll love cooking when the ingredients just come ready in a box, they said….I guess they couldn’t have known my [INSERT NAME] box would come with unsealed (and leaking) meat.”
While many meal kit companies have responsive customer service teams that make good on these issues, one must acknowledge that the damage may already be done and the consumer may not trust your brand again.
So, what's a meal kit company to do?
Meal kit companies have a real opportunity to improve value perception by ratcheting up their safety and quality efforts. It may seem like a daunting task, but there are a few key areas where meal kit companies could place focus to help increase food safety and consumer perception at the same time.
Establish a culture of food safety: Put a priority on food safety training for everyone in the facility. Food safety isn’t a topic that should remain in the c-suite or the quality assurance department. It needs to be top-of-mind for everyone and anyone along the chain. Be sure that everyone, from the warehouse worker packing the order to line management, not only understands cross-contamination risks, allergen risks and temperature abuse, but understands how to recognize the signs of any of these critical violations, as well as what their course of action should be if they spot them.
For brick-and-mortar stores that are implementing their own meal kit pickup options, it is essential that this training addresses how meal kit responsibilities are incorporated with other required job tasks. In a storefront, the employee who is packaging kits may have a variety of tasks throughout the day and may need extra training, especially regarding cross-contamination issues.
Establish and maintain strong supplier agreements: Having supplier agreements in place protects both you and the supplier. You want to ensure that the food products you use are safe — no matter their origin or source. Supplier agreements can help protect your brand, show due diligence and ensure financial reimbursement in the event of a recall or foodborne illness situation. Detailed supplier agreements establish rules of engagement and responsibility, acceptable quality levels and actions to be taken in the event of an incident. Companies may also want to consider having third-party producer audits conducted at the supplier level as an added precaution.
Develop an impervious process for labeling and shelving: A warehouse worker may not be able to physically see the difference between an ingredient that contains an allergen and one that doesn’t — they will be dependent on how the foods are shelved and labeled in the warehouse. Allergens can be life-threatening for some people, so there is no room for error here. This, too, applies to meal kits available at grocery stores and the need to develop a comprehensive labeling and shelving process.
Continually re-examine and assess your packaging standards: Shipping a mixed box of ingredients is an understandably complex task. However, if you’re relying on third-party shipping partners to maintain quality, you’ll be out of luck. The major shippers will not take responsibility for the integrity of perishable foods. That means the burden of ensuring safety is on the meal kit company, so you’ll need to make sure that your packaging can withstand the beating it may take getting from your warehouse to the front door.
Maintaining the cold chain for time/ temperature control for safety foods must take precedence.
Identify ways to partition foods within a shipment so that, if breakage occurs, other ingredients aren’t impacted.
Provide easily identifiable ways for consumers to recognize potential food security, food safety and quality risks and have clear recourse for the consumer available not just in the package but also on your website.
Empower customer service agents to take action to "make things right" with consumers who call in with food safety or allergen issues.
Measure your results with third-party assessments: None of these efforts will be effective unless they are objectively measured and fairly assessed against outlined standards. One of the best ways to measure your results and to identify gaps and opportunities for improvement is to work with a third-party assessment firm that understands your specific operation, has an expert knowledge of food safety standards and can help you benchmark your performance against industry performance. A reliable third-party assessment firm will be able to conduct gap analyses, offer you warehouse assessments, conduct mystery shopper programs and help you design and implement employee training programs.
Getting outside of the box
With the rapid growth of the meal kit industry, there seem to be new players on the scene almost weekly. Yet, none of the major players have been able to resolve these key value, quality assurance and food safety perception issues to retain customers. It may be that the first company to truly do so will be the one that emerges as the industry’s true leader — with results reflected in customer loyalty that lasts longer than six months.