Crazy for meal kits

How the red-hot meal kit market is impacting poultry producers.
Treena Hein
March 08, 2019
By Treena Hein
HelloFresh Canada, the country’s largest meal kit player, offers many poultry-based options like this turkey scallopini dish.
HelloFresh Canada, the country’s largest meal kit player, offers many poultry-based options like this turkey scallopini dish. PHOTO CREDIT: HelloFresh
It’s hard for some to believe that the meal kit sector is booming. It’s strange to think that people would buy a kit with all the ingredients for a meal (or have it delivered) and cook it when they could just buy the ingredients themselves for a substantially lower price.

But today’s consumers are busier than ever – and let’s remember that a wide range of convenience foods has already been available for decades, from frozen pizza and boxed mac-and-cheese to taco kits and ready-to-BBQ skewers.

Meal kits are similar or cost less than restaurant meals, and they are also healthy, fresh and come with proportioned servings. And they allow Mom and Dad to cook with each other and the kids, creating some quality time with family, or even allow older kids to make a meal themselves (step-by-step instructions are provided), getting their cooking skills off the ground.

In terms of packaging and food safety, meal kits are a unique challenge, with various options containing just about everything from fresh meat, pasta and vegetables to sauces and herbs. Because ingredients must be protected against both cold and heat, the packaging needs to be well insulated. Meal kit companies are now exploring recyclable or compostable container options to replace Styrofoam, to both reduce environmental impact and please their customer base.

Meal kits are also flexible. Not only can consumers get them delivered several nights a week, they can also pick them up at the grocery store. Indeed, various meal kit firms are selling their products in stores, while some grocers are acquiring meal kit companies and still others are creating meal kit lines of their own (see sidebar).

Riding the demand wave
Partly because of meal kit demand, Hayter’s Turkey Products in Dashwood, Ont., bought a processing machine in 2017 just for supplying meal kit firms and other food service customers. The machine allows for exact consistency in turkey breast meat portions.

Hayter’s sales and operations manager Sean Maguire notes that their meal kit customers use a lot of ethnic recipes, which helps consumers see the flexibility of turkey. Indeed, in October 2018, Canadian meal kit firm Chefs Plate (now owned by HelloFresh) announced a partnership with Turkey Farmers of Canada (TFC) to use only Canadian turkey year-round.

For example, some menu options include spiced turkey with roasted red pepper fajitas and turkey penne with rosé sauce on the menu.

“Chefs Plate delivers hundreds of thousands of meal kits across the country, so this partnership has a measurable impact on our industry,” states Janice Height, TFC director of corporate services, in a press release.

Echoing Maguire, Height adds that, “The partnership also represents an exciting new frontier for us to educate new consumers about the quality and integrity of our delicious product on a mass scale that goes well beyond the traditional grocery aisle.”

In the U.S., HelloFresh offered two box kit options this past November to feed Thanksgiving crowds, one which included enough roast turkey to feed up to 10 people. While the company’s Canadian brand didn’t offer the same box kits, it did offer some Thanksgiving-related turkey meal kit choices.

Chicken use
For its part, Chicken Farmers of Canada (CFC) is hoping to explore consumer interest in meal kits in early 2019 within its Usage and Attitudes Study. “My understanding is that it’s a $120 million-plus industry in Canada and it’s going to grow more and more,” says CFC communications manager Lisa Bishop-Spencer, citing 2017 research from consulting firm The NPD Group.

“We have been approached by a few companies offering this service to Canadians, we can’t divulge which, and we are working with them to deliver the Raised by a Canadian Farmer logo to help consumers understand that the chicken in their dishes is local and raised to a set of national standards.”

Meal kits also make consumers feel as though they’re playing a bigger role in their food choices, Bishop-Spencer adds. “That’s important,” the communications rep says. “It’s also important for these companies to deliver on their consumers’ expectations for Canadian goods – which is where the Raised by a Canadian Farmer logo comes in.”

The processor’s perspective
From a processor’s perspective, it’s not easy to provide details on the meal kit market, as the demands of these firms are not easily apparent to most primary and further processors, notes Robin Horel, president of the Canadian Poultry and Egg Processors Council (CPEPC).

“Frozen meals are often manufactured for retail sale by our further processing member companies, while fresh meat kits are made with separate ingredients purchased by the meal kit provider,” Horel explains.

“As processors, we often do not know if the purchased poultry part is going into a meal kit…We suspect some small meal kit makers may be buying their poultry and meat ingredients from supermarkets or retail stores.”

However, while CPEPC can report that consumer demand for meal kits appears to be growing, Horel notes that consumers who buy meal kits on a regular basis are likely visiting the supermarket less often. “Therefore, we are not sure we can count on this niche to increase chicken and turkey demand,” he says.

“To the extent that major retailers are getting into this segment, any growth would be reflected in their purchases and again, would not show up as a special request since they already buy portioned breast meat.

As some retailers or retail concepts such as Amazon are successful, market shares for chicken and turkey sales can fluctuate, but overall chicken and turkey demand may not change much.”

The other factor in trying to piece out the impact of meal kits, Horel says, is the constant battle between food retail and food service.

“Are meal kits drawing customers from the restaurant sector or only those that normally cook at home anyway?” he asks.

“Too soon to tell, but no doubt the fresh meal kits delivered at home will find a permanent place in the food market and perhaps replace some of the frozen dinners stored in the freezer.”

Horel also makes the point, however, that meal kits may not be as common if the economy takes a downturn.

Meal kit front line
All poultry and eggs in HelloFresh Canada and Chef’s Plate recipes are fresh and produced in Canada, notes the firm’s public relations specialist Jonathan Motha-Pollock. Currently, three out of the 12 HelloFresh weekly menu options feature poultry. Chef’s Plate offers at least one poultry option in each of its classic, family and 15-minute meal plans every week; eggs are also often included in its vegetarian plan.

While the company can’t get into specifics in terms of the demand for meal kits with poultry compared to other options, Motha-Pollock says he “can share that our customers love our chicken and turkey offerings.

For example, right now, Canada’s top-rated meal is our baked parmesan chicken.” He also notes that the cost of a HelloFresh or Chef’s Plate meal kit containing meat protein remains the same regardless of protein type.

“We expect to add more poultry meals as we expand choice for Canadians,” Motha-Pollock says. “Chicken is a staple protein for Canadians, and we’re always striving to provide our customers what they love.”

Key meal kit industry developments

When major food firms get into the meal kit game, you know there’s more growth ahead. Here are some of the latest North American developments:
  • Amazon now sells meal kits on its platform.
  • In Canada, the Metro grocery chain now has a majority interest in Montreal-based meal kit company MissFresh and is selling  its kits in Ontario and Quebec stores.
  • MissFresh online customers now have the option of picking up their orders in a Metro store, and receive a small discount on their total grocery store bill for doing so.
  • Blue Apron, HelloFresh and Plated are all moving to make their meal kits available in grocery stores.
  • Walmart is already rolling out its own meal kits in thousand of stores this year.
  • Longo’s has already done so – its new Impress gourmet meal kits come in eight options.
  • In late November, HelloFresh Canada (following its recent acquisition of Chefs Plate) announced that it expects to own 60 per cent of the Canadian meal kit market share in 2019. It delivers in every province.
  • HelloFresh delivered 46.5 million meals to 1.84 million customers worldwide between July 1, 2018 and September 30, 2018.
  • HelloFresh Canada will be instituting “a significant price drop” for its Chefs Plate meal kits, “which will make our kits more accessible for Canadians. Prices will start as low as $8.99 per serving as of early December 2018.”

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