The global meal kit delivery service market was valued at USD 2.52 billion in 2017 and is expected to reach USD 8.94 billion by 2025 at a CAGR of 17.15% from 2017 to 2025. The increasing working population worldwide coupled with the preference for convenience foods primarily drives the market growth. Other factors driving the growth of the market are changes in food service behavior, increasing urban population, the trend of reducing food wastage to name a few.
Global meal kit delivery service market revenue by type, 2015 - 2025 (USD Billion)
People seeking quick service in terms of selecting and purchasing grocery products is expected to drive the service of meal kit market. Interest for preparing food at home is on the higher side among the millennials and generation Z. In 2017, around 27% of the U.S. and 4% of Canadian consumers resorted to meal kits.
Major companies are providing doorstep delivery of fresh or semi-prepared foods with the recipe. They are also striking deals with grocery stores and brick-and-mortar retail outlets. Online and offline providers offer various subscription plans with an intention of widening the consumer base. These factors are expected to drive the demand for meal kit services worldwide.
With an aim to cater to the consumers’ growing need for immediate consumption and quickly served food, the manufacturers are resorting to the usage of fresh and processed products. The increasing accessibility of fresh and processed foods has upgraded the delivery service model as consumers are seeking for fast served food. This market is expected to offer lucrative opportunities for home cooked food and takeaways.
This global meal kit delivery service market is predicted to have an increasing acceptance over the forecast period owing to the significant adoption of hassle-free food preparation techniques among kitchen-savvy consumers. The concept of doorstep delivery of pre-measured food ingredients along with recipe books is expected to boost market growth.
For instance, plated meal kits are available in about 40 grocery stores in the U.S. German company Marley Spoon had entered the U.S. market by understanding the growth potential. This market is expected to offer potential opportunities to retail markets with an aim to broaden its product portfolio and add value to its existing products. In 2017, Blue Apron and HelloFresh accounted for around 40% and 26% market share in the U.S.
Segmentation by Type
• Fresh Food
• Process Food
The fresh food segment was estimated at around USD 1.38 billion in 2017 and is projected to reach a market size of over USD 4 billion by 2025 with a CAGR of around 14%. It is the largest segment in the market.
Due to the convenience of daily cooking and increasing trend of a healthy lifestyle, people prefer meal kits over conventional food preparation. Companies are providing fresh food products in the box. Depending on the recipe, meat is being supplied in processed or raw type inside the box. Prepared food, ready-made food, or ready-to-eat foods are delivered in pre-cooked condition.
The meals consist of pasta, vegetables, rice, packed sauce, fish, meat and others. However, this product is focused on dinner. People prefer to have hassle-free cooking at the end of their day. By understanding consumer food trends, companies are more into offering fresh food than processed foods. Major companies such as Blue Apron, HomeFresh, Home Chef, and Plated are providing a more fresh meal in their menu.
The demand for processed meal kit is observed in the U.S. and Europe market. It is expected that the global process food meal kit segment will grow at a CAGR around 20% from 2017 to 2025. It has been observed that more than 95% of the U.S. subscribers prefer to order from their first signed up company or service provider and 17% of them use this service pattern.
Segmentation by region
• North America
• Asia Pacific
• Central and South America
• Middle East and Africa
North America is the largest and fastest growing market. The market is estimated at USD 1.19 billion in 2017, and it is expected to reach USD 5.0 billion by 2025 with a CAGR of 19.62% from 2017 to 2025. With increasing, dual-income family population is pushing people to subscribe meal kit delivery services to get out of problems such as food planning, grocery shopping and prepping.
It will help them to save time and allocate it to something else. This service was introduced in the U.S. in 2012. People get attracted to the idea of getting restaurant quality food at the comfort of their own home. The U.S. market became a billion dollar market in 2018. Around 33% of the U.S. population has used free product trials.
The concept of meal kit service was started by a Swedish company namely Middagsfrid in 2007 Demand for this service got popular in German, Sweden, Italy, Spain, France, and U.K. Europe is the second largest market. It accounts for over 30% of the global market. It has been observed that young British consumers enjoy preparing their food. They want to control what goes into their food daily to maintain a healthy life which is affecting the growth of this market.
Australia is one of the major markets in the Asia Pacific region. Australia accounts for over 25% of the Asia Pacific market. It is estimated that this market will grow at a CAGR of around 13% from 2017 to 2025. It is observed that in 2018 around 180,000 Australian households has ordered meal kits.
Some of the major players operating in the market are Blue Apron, LLC, Just Add Cooking, Foodstirs, Inc., HelloFresh, Marley Spoon Inc., Relish Labs LLC, Green Chef Corporation, Gobble and others. The market is fragmented by nature with the presence of many small and medium level suppliers.
The significant trend observed in this market is that of big grocers and retailers acquiring small and startup meal kit companies. For instance, Walmart entered into a partnership with Gobble and on similar lines Kroger merged with Home Chef to enter the market. Other significant partnerships in this market are Ahold Delhaize USA to HelloFresh, Albertsons to Plated and Costco Wholesale Corp. to Blue Apron.
Research Support Specialist, USA