The meal kit business model and food delivery packaging solutions

Danielle Ohl

cooking-ingredients-food-packaging.jpgWhen it comes to meal time, today's consumer values both convenience and healthy ingredients.

In the past, the two ideas did not go hand-in-hand. Convenience foods were usually processed and not as nutritionally balanced as health-conscious consumers desired, but creating meals from fresh ingredients meant going to the store, searching the perimeter for sometimes hard to find items, finding it next to impossible to purchase small enough portions so as to reduce food spoilage and waste, bringing those ingredients home, and spending a fair amount of time preparing a meal.

Innovative companies have married the ideas of convenience and fresh, nutritional meals with the advent of meal delivery services. This market is prime for growth. According to Statista, the meal kit delivery industry in the US was worth about $5 billion in 2017. It's expected to more than double to nearly $12 billion by 2022.

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Young(ish), urban consumers a driving force behind meal kit model

According to Packaged Facts, "age - between 25 and 44 years old - is the strongest indicator of who uses fresh meal kit subscription services." Subscribers are also likely to be partnered parents in urban areas.

Fast Company agrees. "In the U.S., boxed-meal delivery services were first adopted by Millennial urbanites. These individuals are largely college-educated, dual-income households." Raised in an era of convenience, many Millennial consumers would rather order take-out after a long day at work than spend time shopping for ingredients to prepare, especially if they are only cooking for one or two people. At the same time, this demographic is very aware of and concerned with the ingredients and healthfulness of what they eat and drink.

Meal kit home delivery companies have found an eager market in these discerning young professionals, also capitalizing on those that live in and around major metro areas. This particular subset is less likely to have a car, which can cause hardship when trying to stock up on groceries. Lugging full grocery bags through public transit and up to a tenth-floor apartment is not anyone's idea of fun. Younger consumers who live in metro areas also are used to paying a premium for food and value their time above all, so they are much more eager to part with their money for convenience and quality ingredients delivered to their door.

Packaging considerations for meal kit companies

To bring fresh ingredients across the country to the end consumer requires complex supply chain logistics. Certain foods prone to spoilage like meat and fresh vegetables must be packaged in a manner that preserves freshness and reduces the risk of cross-contamination or infection with foodborne illness. Attention also must be paid to minimizing the risk of cross-contamination of certain allergens like nuts and gluten.

Other ingredients like spice blends and sauces necessitate their own kind of packaging to ensure product leakage does not occur while in transport. All of these items must be carefully measured, weighed, and packaged in exact amounts to ensure that when the meal is finally assembled and served in a consumer's home, it is delicious and nutritious.

Meal kit delivery packaging challenges

Most meal kit delivery companies either package their ingredients by hand with manual labor or outsource the packaging to contract packagers. But when these companies have a ton of volume, hand packing quickly becomes inefficient and outsourcing costs only rise.

So meal kit companies are increasingly looking to packaging automation as a solution to bring down labor and outsourcing costs, control their own supply chain, and streamline the packaging process to maximize efficiencies and profits.

But here's the thing: The feature that makes meal kits so beloved by consumers (a wide variety of pre-packaged ingredients) is the very thing that can make meal kit packaging automation a challenge. There is no such thing as a one-size-fits-all machine for such a wide breadth of ingredients. Each food product has its own properties that require different packing machine configurations and components. For the meal kit company, this likely means investing a substantial amount of resources into multiple packaging lines. And sure, different products and bag sizes can be packaged on a single machine, but equipment operators must change out components each time a new ingredient is up for packaging, which can be a technical and time-consuming process. 

Luckily the packaging automation industry loves a challenge.

Automated solutions for meal kit packaging

So how can meal kit delivery services possibly standardize and automate their packaging when they require a ton of different ingredients in many different serving sizes? The short answer is: They don't, at least not yet.

Instead, top meal kit delivery services are assessing their data to find out which ingredients and serving sizes are most in demand. Using those parameters, they can then automate high-use segments of their meal kit packaging process.

Here are a few of the most-requested food delivery packaging automation solutions:

  • Meat and fresh-cut fruits and vegetables: Vertical form fill seal (VFFS) machines with washdown upgrades ensure maximum packaging speed and accuracy while also allowing for maximum access to machine parts for proper sanitation and cleaning.
  • Dry ingredients like rice and garlic cloves: VFFS machines are a great choice for dry ingredients because this equipment can package these products relatively easily and quickly with little customization. Less customization equals lower costs and quicker delivery.
  • Spices and sauces: Stick packaging machinery quickly and accurately form, fill, and seal small packets of ingredients like spices and sauces.
  • Cold packs: Another growing packaging application that has emerged with the advent of meal kit delivery services is the packaging of cold packs for shipment of the ingredients to consumers' homes. Previously something that was outsourced, some meal kit companies are finding it more advantageous to bring the packaging of cold packs in-house with VFFS machines.

What about meal kit packaging waste?

So we arrive at the inevitable question: Does packaging individual pre-measured ingredients hurt the environment? Is the meal kit delivery model sustainable in a packaging sense?

We admit that as a packaging equipment manufacturer we obviously have a bias. We champion all the ways in which flexible packaging is a sustainable option, but at the same time recognize that waste is unavoidable and needs to be addressed when utilizing any food packaging solution.

But consider this: Generally, more packaging means less food waste. And we waste tons of food, literally. It's estimated that of the 4 billion tons of food produced each year, 1.3 billion tons, or 33%, is wasted. Packaging food items in smaller portions result in a higher likelihood of using the entire package contents in one sitting, leading to much less food waste overall. This also means properly packaged food results in a smaller carbon footprint over its lifecycle.

Additionally, technologies like modified atmosphere packaging (MAP) can play a huge role in reducing food waste. MAP creates or maintains an ideal mix of gases inside of a package to extend shelf life and reduce product degradation.

So it really comes down to a question of which is more important to combat - food waste or packaging waste? 

Are there any sustainable packaging solutions for meal kits?

Fast Company explains that the challenge with a meal delivery service is that customers want fresh, preservative-free, perfect looking ingredients with no packaging. Unfortunately, this is not (yet) technologically possible. One must be sacrificed for the other, but there are happily new middle grounds emerging.

Many meal delivery services are listening to consumer concerns about packaging waste. Here are some innovative and sustainable ways these companies have responded:

  • Creating outer shipping boxes and packing materials that are fully recyclable and compostable, made from sustainable materials
  • Partnering with packaging suppliers that use renewable energy
  • Sourcing green packaging for meal components that is recyclable or compostable
  • Creating freezer packs that contain mostly water and no toxic fluids
  • Pre-labeling and pre-paying for shipping containers to be returned to the company for reuse
  • Optimizing supply chains with packaging automation to keep food fresher longer
  • Cutting out the middle man when sourcing to reduce energy, water, and labor waste

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Originally published 8/19/16, updated 9/3/19.