Food outside the box: Meal kits are storming the market

Elena Vardanian
29.09.2021
3 min read

According to a recent consumers’ survey 48% of responders from the US tried a meal kit in the past year, 45% will keep ordering meal kits, and 83% said it cut down on their visits to restaurants (1). 7 in 10 customers of London-based meal kit company, Mindful Chef, said that they would continue using the service after the pandemic (2). Kitchen is not dead, Union Bank of Switzerland (UBS) predictions fell through and seems like the meal kit industry will continue to thrive beyond the pandemic.

What is a meal kit?

A meal kit is a collection of pre-portioned ingredients that make up the components of a recipe. Oven-ready meal kits will cut out the prep, shopping and planning (Heat&Eat segment of market) while others (Cook&Eat) are for those who are craving a fully prepared meal. The idea behind meal kits is for customers to to cook their own food without having to shop for ingredients at the grocery store.

The variety of meal kits boggles the mind! Meal kits are popular among busy parents, millennials and seniors. Plenty of them are for those with special diets who prefer pre-planned ingredients or meals (vegan, keto, gluten-free and dairy-free) (3,4). 

How big is the meal kit market?

Global meal kit delivery services market size was valued at $10.26 billion in the year 2020 and is likely to showcase a y-o-y growth rate of 13% during the study period, eventually reaching a valuation of $24.14 billion by 2027 (5).

Cook&Eat segment led the market and accounted for a share of 61.0% in 2020. The growing demand for healthy food ingredients and the trend of cooking at home at the global level are expected to expand the scope of the cook and eat meal delivery service over the next few years. The Heat&Eat segment is expected to register the fastest growth rate of 13.4% from 2021 to 2028.

Some experts believe the meal kit market’s gains from the past year-and-a-half will face new threats in an increasingly digitized food industry. According to Coresight’s report, meal kit makers are facing a sharp decline in business this year. The firm predicts industry sales will top $10 billion by 2024. Coresight is not alone with their gloomy predictions. In late 2020, Statista published predictions that meal kit sales would more than double from 2017 to 2022, hitting $11.6 billion in the U.S. (6)

The Meal Kit Delivery Services market in the U.S. is estimated at US$ 2.3 billion in the year 2020. China, the world's second largest economy, is forecast to reach a projected market size of US$ 3.8 billion by the year 2027 trailing a CAGR of 15% over the analysis period 2020 to 2027. Among the other noteworthy geographic markets are Japan and Canada, each forecast to grow at 8.1% and 9.9% respectively over the 2020-2027 period. Within Europe, Germany is forecast to grow at approximately 9% CAGR (7).

Who has captured the market?

HelloFresh and Sunbasket combined accounted for more than half of the U.S. meal kit market last year. Blue Apron accounted for roughly 34% of the market in 2017, fell to 8% market share in 2020 after a brief burst of profitability as its struggles continued (6). 

This year, HelloFresh, the market share leader, has recorded a record turnover of 1.56 billion euros in the second quarter even as pandemic-related restrictions eased in many countries. The company received almost 31 million orders between April and June, representing an increase of 71.2 % year-on-year (5). It also recorded 82.3% revenue increase in the United States, where its customer base surged by 88.6% annually (6). HelloFresh has also acquired companies like Green Chef and Factor75 to boost its standing (8).