Meal kits have seen their ups and downs in recent years, from the highs of 2020 when the pandemic fuelled a new wave of customers, to the lows of the cost-of-living crisis when shoppers switched from prioritising convenience for value.
However, as inflation eases and shoppers gradually loosen their purse strings, it could be time for the sector to once again flourish.
A couple of supermarket titans are backing on it. In recent weeks, Waitrose has acquired meal-kit delivery service Dishpatch, which delivers pre-prepared meals designed to replicate a restaurant experience, with chef-designed dishes from the likes of Angela Hartnett, Michel Roux Jr, Rick Stein, and Sabrina Ghayour.
Meanwhile, Sainsbury’s has partnered with two big names: Gousto and Simply Cook.
But as they explore the world of recipe boxes, is it the right move for them and will it benefit the sector?
Signficant opportunities
Waitrose executive director James Bailey says that the retailer sees “significant opportunities” for Dispatch, which it says will build on its ambition to be the “trusted home for food lovers”.
The grocer’s immediate focus will be helping Dishpatch to grow its core meal kit business. However, it is not the first time that the retailer has ventured into the sector, having entered into a partnership with Mindful Chef in 2021, which at the time, made Waitrose the first supermarket to work with a recipe box service in the UK.
But the collaboration was fairly short lived, with the trial period ending the following year in what then director of commercial development and innovation Katie Papakonstantinou said gave the supermarket “really good insight into the recipe box market”.
Consumer champion and online retail expert Martin Newman says Waitrose’s decision to venture back into the sector with Dishpatch was most likely driven by the “strategic alignment with its brand values” that the business brings.
“After all, Dishpatch offers restaurant-quality meal kits, which align well with Waitrose’s upmarket and quality-focused brand proposition and the previous partnership with Mindful Chef will have provided valuable insights and data on customer preferences, which can be applied to this new venture.”
Retail Economics senior consultant Josh Holmes believes that Waitrose re-entering the meal kit market “reflects a strategic move to double down on its core customer base, increasing choice for affluent shoppers willing to pay for premium, convenient meal solutions”.
However, he believes its success will depend on its ability to “ensure regular availability and maintain quality standards in line with the expectations of Waitrose shoppers”.
Newman adds that effective marketing, seamless integration into Waitrose’s product range, and maintaining the high quality and uniqueness of the meal kits, will also help the brand to triumph.
Sainsbury’s partnerships
Sainsbury’s is also no stranger to the recipe kit market, having first partnered with Simply Cook in 2018.
However, it more recently harnessed this collaboration through an expanded product range under the ‘Simply Cook with Sainsbury’s’ branding.
SimplyCook Retail co-founder Sam Tierney says the partnership is “a new way for shoppers to get incredible flavour and new recipe inspiration from SimplyCook flavour pots, alongside great quality ingredients from Sainsburys”.
Even more recently, the supermarket giant launched a partnership with Gousto, offering six recipe kits in-store.
Gousto chief customer officer Sally Matthews says the collaboration looks to bring the recipe kit firm’s “leading dinnertime choice and variety to even more households across the country,” while Sainsbury’s director of fresh food Richard Crampton adds that it makes the grocer a “destination for innovation”.
Newman says that in-store meal kits “cater to current consumer trends” with demand “only likely to increase over-time”.
Holmes adds that by partnering with an established brand like Gousto, “lowers the risks attached for Sainsbury’s in terms of marketing and customer awareness”.
He notes that it will likely appeal to “busy professionals and families looking for convenient meal solutions without the financial commitment of a subscription”.
“There is a demand for convenience and immediate access to meal solutions, and providing meal kits in-store taps into this market. This enables consumers to try meal kits without the commitment of a subscription and can also lead to impulse purchases. It also will also potentially increase the size of the customer basket.”
Could this be a turning point for the sector?
The big supermarkets have made their pushes into meal kits after a difficult few years in the sector in the aftermath of the pandemic.
Market leader Hello Fresh warned earlier this year that its earnings would significantly miss analyst expectations, as it forecast between €350m (£298m) and €400m (£341m) this year, down from the €568m (£484m) estimate. It also scrapped its revenue and profit targets for next year.
However, Newman believes that the growing interest of supermarkets could represent a “positive turning point” for meal kit companies and provide “significant opportunities”.
“Supermarkets can help to increase visibility while gaining access to a broader customer base. So, it’s potentially a win-win for the supermarket and the brand.”
Holmes agrees that supermarkets’ “extensive distribution networks, established brand trust, and significant customer reach make meal kits more accessible and affordable.”
However, Newman says that while the sector could greatly benefit from supermarket support, it still has its issues, including the “risk of saturation” and the “risk of dilution of demand with the number of choices available to consumers”.
Holmes says that in order to remain competitive brands need to innovate continuously. “This includes offering unique recipes or exotic cuisines, while catering to niche dietary needs, and providing flexible subscription models,” he adds.
In May, Slimming World launched a new recipe box service, offering a selection of healthy dishes that are delivered to customers doors each week.
Despite the risk of an over-crowded market, Newman says that Slimming World has the opportunity to remain competitive “by focusing on differentiation and innovation, offering unique recipes, catering to specific dietary needs, and providing high-quality ingredients can help them to stand out”.
What is future of meal kits?
The key to winning in the recipe kit sector will be strong partnerships and a USP to stand out from the competitive market, experts agree.
Newman says that it’s “highly likely” that other retailers will look to expand into recipe boxes via acquisition or partnerships “as this sector aligns with the growing demand for convenience and high-quality home-cooked meals”.
This in turn can provide supermarkets with “a way to diversify their product range and attract new customers”, he adds.
Holmes agrees that it’s likely more retailers will explore the market as incorporating meal kits into their home delivery services will allow supermarkets to leverage their logistical expertise, enhancing operational efficiency and margins.
“This gives them a significant advantage over standalone meal kit subscription services, which often struggle with high delivery costs and customer retention,” he adds.
However, he notes that “not all will be successful” in this market.
“Supermarkets must still navigate supply chain complexities and ensure they don’t cannibalise their existing product lines. Balancing cost efficiency with differentiated, high-quality offerings that align with their core proposition will be crucial to success.”
While it’s certainly not a straight path ahead, supermarkets jumping into meal kits could be a key ingredient to attract new shoppers to the meal kit market.
