There is already compelling evidence that these services are changing consumer behavior, with loyal subscribers spending as much as 13% of their food purchases on meal-kit services. While we believe meal-kit delivery services currently represent less than 1% of total food and beverage retail sales in the United States, their disruptive potential is magnified because their buyers are often some of the most lucrative and influential customers of traditional grocers, specialty grocers, and restaurants. ![]() While the category is on the verge of consolidation and many players will not survive, the economics behind leading meal-kit delivery services like Blue Apron, HelloFresh, and Home Chef indicate more disruptive longer-term potential as the industry consolidates. adults, we believe it would be a mistake for investors to dismiss meal-kit delivery services. Meal-Kit Services at the Intersection of Several Consumer Trendsĭespite relatively low penetration rates among U.S. We expect these services to play a big part in accelerating online grocery and CPG direct-to-consumer sales in the years to come. Instead of viewing these services only as immediate threats to our grocery store, CPG, online retail, and restaurant coverage, as many investors have assumed, we believe they’ve played a part in changing consumer behavior that investors can’t ignore. ![]() However, after digging deeper and speaking with several executives from leading meal-kit delivery services, we believe these platforms and other subscription-based companies may be thawing consumer perceptions of online grocery and restaurant delivery services while offering new growth avenues for consumer packaged goods, or CPG, companies and online retailers. When these services first hit the market, we viewed them as largely no-moat companies that represented only minimal threat to our consumer coverage. These services offer an attractive alternative that overlaps with consumers’ evolving views about fresh, healthy, and convenient dining options. ![]() If you’ve opened your browser or mailbox in the past year, chances are you’ve seen an advertisement for a meal-kit service like Blue Apron, HelloFresh, Home Chef, and others.
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