Meal kits went mainstream during COVID — but is it a food fad or the new normal?
CBC
Ready-to-make meal kits surged in popularity when COVID-19 hit, as more Canadians had to rely on their own cooking for sustenance. But it's unclear whether those new habits will stick.
Montreal-based meal-kit and grocery-delivery company Goodfood says it saw new customers pour in when the pandemic began.
"The pandemic was really just this big push, this huge tailwind behind the business," said Goodfood CEO and co-founder Jonathan Ferrari, at the company's micro-fulfilment centre in Toronto, where the company boxes and ships orders for customers in the city's downtown.
According to market research firm the NPD Group, before the pandemic, less than one out of every seven households had ordered a meal kit. But in 2020, that rose to nearly one in four — a 50 per cent increase.
The household penetration rate of online grocery orders increased even more, from about 11 per cent in 2019, to 26 per cent in 2020. And online orders of restaurant meals jumped from 39 per cent of households to 50 per cent.
"We've all gotten used to ordering food online, and I think that's a pandemic habit that's going to stick long after the pandemic has gone," said Vince Sgabellone, food service industry analyst for the NPD Group.
WATCH | Why summer takes a bite out of the meal-kit business:
But as COVID-19 public health restrictions were lifted in the summer, Goodfood reported a loss of 19,000 subscribers, going from 317,000 in the third quarter of 2021, to 298,000 in the fourth quarter.
Germany-based meal-kit company HelloFresh, which delivers in Canada and elsewhere in the world, also lost thousands of subscribers recently, dropping from 7.7 million in its second quarter this year, to 6.94 million — though that's still up nearly 40 per cent from the same period in 2020.
HelloFresh also owns Chefs Plate, which only delivers in Canada, but the company doesn't break down subscriber data by brand or by country.
"Within the meal-kit business, we've always had a seasonality that's the opposite of the restaurant business … as customers tend to go out to patios and spend more time outside [in the summer]," said Ferrari. He added that the company has already seen a rebound in business over the fall months.
Goodfood recently opened its first two micro-fulfilment centres, in Toronto and Montreal, to offer customers delivery of meal kits and grocery items in as little as 30 minutes. Its on-demand delivery service is free for a limited time, but will eventually have a fee of $5.99 per month.
One Toronto-based marketing firm questions whether fewer Canadians will find value in meal kits in the future — unless the marketing ultimately shifts.
"As the pandemic has gone on, the product of meal kits has gone from a necessity and a convenience item, to a luxury, to a treat," said Mo Dezyanian, president of Empathy.
