Making the most of meal kits
While the market is still in its infancy in Canada, meal kits serve up opportunities for grocers
FOR ON-THE-GO CONSUMERS with limited time, meal kits offer an alternative to take-out and having to come up with dinner solutions. Delivered directly to households or picked up at grocery stores, meal kits include portioned ingredients and easy-to-follow instructions.
In Canada, the meal kit market is still in its infancy. In fact, only 4% of households have purchased a meal kit in the past 12 months, compared to 25% of U.S. consumers. While 4% may seem small, it’s worth noting that 80% of Canadian households that have purchased a meal kit have continued making purchases after their initial trial period. The reason Canadian households are purchasing meal kits? Consumers are overwhelmingly looking to save time, whether it be on meal planning, meal prep or grocery shopping. Meal kits are a convenience item for today’s hectic lifestyles.
Meal kits present a clear opportunity to attract new customers. For example, 63% of consumers would consider purchasing a meal kit if they were less expensive. In addition, 30% would like to buy meal kits at their local grocery store, which creates a substantial opportunity for retailers in Canada to assemble the same meal components at an affordable price.
Canadians’ desire for a healthier lifestyle creates another growth opportunity for meal kits: Consider that 65% of consumers say eating healthy is a vital part of their lives, however, 64% agree that eating right presents a challenge. Meal solutions that offer better-for-you ingredients can help consumers conquer their nutrition conundrum and achieve their health goals. In fact, 54% of Canadians say they are willing to pay more for food and drinks that do not contain any undesirable ingredients.
So, who is the meal kit consumer? While Canadians across the shopper spectrum purchase meal kits, younger, higher-income families with children seem more attracted to the ease and convenience of meal kits. Take millennials, for example. These consumers are 182% more likely to purchase kits than their parents and grandparents. Busy families with children are also dissing the dinner planning process and benefitting from the convenience and healthy options meal kits have to offer, purchasing them 202% more than their counterparts without children. And not too far behind are families with higher income who are 143% more likely to purchase kits than lower-income families.
In-store pick-up as an option for meal kit purchases can also help boost trips to the store, which have been lagging in Canada. In 2017, for example, consumers made 2.3 billion shopping trips, which is down 7% from 2012 (175 million fewer trips). Millennials make the fewest trips, with 116 annual trips, compared with 193 by the Greatest Generation. Offering ready-to-go meal kits in store is one way retailers can provide a new shopping experience that encourages consumers to not only come into the store, butvalso spend money on additional items and take a bite out of out-of-home dinner options, such as quick-service and full-service restaurants.
As the Canadian grocery retail landscape continues to evolve, the road is filled with new, unique opportunities to align to consumers’ growing interest in new services and product offerings like meal kits. Companies that fail to innovate may be missing out on an opportunity to capture more shopper dollars and increased loyalty.