{"id":338498,"date":"2017-04-16T23:00:35","date_gmt":"2017-04-16T15:00:35","guid":{"rendered":"http:\/\/techcrunch.com\/?p=1471138"},"modified":"2017-04-16T23:00:35","modified_gmt":"2017-04-16T15:00:35","slug":"the-winner-of-the-meal-kit-market-wont-be-a-meal-kit-company-at-all","status":"publish","type":"post","link":"https:\/\/people.utm.my\/asmawisham\/the-winner-of-the-meal-kit-market-wont-be-a-meal-kit-company-at-all\/","title":{"rendered":"The winner of the meal kit market won\u2019t be a meal kit company at all"},"content":{"rendered":"

When they started operating in the U.S. about five years ago, meal kit companies looked big, disruptor-sized, poised to transform the way people eat entirely. They were even seen as a potential thorn in the side of the massive U.S. grocery industry, which racks up about $650 billion in annual sales.<\/p>\n

Now,\u00a0meal kit companies are facing an\u00a0onslaught of competition from newcomers and big food brands alike. Turning a profit has proven elusive. And somewhat embarrassingly, it looks like meal kit companies need to emulate the brick-and-mortar groceries and online retailers they once criticized for overwhelming shoppers with choices. To go truly mainstream, they need to diversify their offerings.<\/p>\n

It\u2019s not a path that founders, or their investors, imagined at the outset.<\/p>\n

At the advent of meal kit services, the idea was to keep it simple\u2013 package up already measured ingredients with a recipe card, and ship these to subscribers\u2019 doors. Meal kits would spare customers\u00a0annoying lines at the grocery store, and teach\u00a0them\u00a0a few culinary skills\u00a0along the way. Meanwhile, the companies planned\u00a0to collect data about consumers\u2019 dining preferences.<\/p>\n

\"\"Sun Basket meal kit ingredients.<\/em><\/p>\n

Kevin Diestel of Sapphire Ventures<\/a> explains the appeal of his own portfolio company, Sun Basket,<\/a> and other meal kit makers by comparing them to earlier subscription services that used big data\u00a0to drive their business success. \u201cThey\u2019re riding the same wave in grocery that Netflix did in video and Amazon did in e-commerce,\u201d he said.<\/p>\n

Based on the number of meal kit delivery companies to receive meaningful rounds of funding, it\u2019s clear that other investors agree. Notable players in the space operating stateside include early pioneers Plated,<\/a> Blue Apron<\/a> and Hello Fresh<\/a>, along with Home Chef<\/a>, Peach Dish<\/a>, Purple Carrot<\/a>, Gobble,<\/a> Marley Spoon<\/a>, Green Chef\u00a0<\/a>and Chef\u2019d.<\/a><\/p>\n

Even e-grocers\u00a0like\u00a0Fresh Direct<\/a> and Good Eggs<\/a> are starting to offer\u00a0meal kits now. Meanwhile,\u00a0traditional\u00a0groceries or specialty food markets like Publix<\/a>, and Ahold\u2019s Giant-Carlisle<\/a> are selling meal kits in their brick-and-mortar stores.<\/p>\n

\"\"Purple Carrot\u2019s vegan \u201cTB12\u201d meal kits were created with\u00a0the\u00a0NFL\u2019s\u00a0Tom Brady.<\/em><\/p>\n

Each company puts a different spin on the meal kit. Chef\u2019d<\/a> sells them\u00a0a la carte while others require a subscription. Purple Carrot<\/a> offers vegan fare and \u201cperformance meals\u201d recommended by\u00a0pro-athletes, starting with Tom Brady<\/a>. Sun Basket<\/a> sells gluten-free meal kits and kits for adherents to paleo and vegetarian diets. Gobble\u2019s<\/a> meal kits can be prepared in 10 minutes.<\/p>\n

Altogether, U.S. meal kit delivery startups have raised more than $650 million in venture capital to date, according to research from Packaged Facts<\/a>.\u00a0Rumors are swirling that Blue Apron<\/a> is now\u00a0readying for a 2017 IPO.<\/p>\n