• by Blake Crist , Eric Pakurar , July 27, 2015

As more and more Americans are turning to delivered kits for their meal planning needs, you’ve probably seen some news coverage featuring one of the many fresh meal kits or prepared meal delivery options such as Blue Apron, Plated, Hello Fresh and similarly, celebrity chef David Chang’s “Maple” service. The number of providers and subscribers of such services has steadily been on the rise in recent years, and, if it continues, it could mean trouble for CPG brands. 

Some, like Maple, deliver fully prepared gourmet dinners for a set price within a set location range. Others, like Blue Apron, send subscribers a weekly box of raw pre-portioned ingredients and a recipe that they can use to prepare their own meal without having to get creative and take a trip to the grocery store. It’s the latter group that has the largest reach in the U.S. and, therefore, poses the biggest threat or potential reward for CPG brands. 

Blue Apron and Plated appear to be the clear leaders, in a category that was born out of the chasm between the desire to prepare inspired fresh, home-cooked meals that simplify the task for busy young adults. However, despite the abundance of press and growing number of fans, neither company has perfected the experience and therein lies the opportunity for CPG brands. 

There are two clearly identifiable weaknesses of the category leaders – cost and convenience. A week of dinners from either player will set you back about $84 per person, which is more than half of what the average American spends on food each week, according to a Gallup poll. This leaves the service feeling more like a splurge than a life-changing necessity. Other weaknesses include time commitment and level of difficulty. Blue Apron and Plated are intended to be ordinary weeknight solutions to the age-old struggle of putting a fresh, healthy dinner the table, but while innovative and exciting, many of the recipes are extremely complicated and some demand a decent amount of prep time as well as clean up. If these services are to go mainstream, they must simplify their model to offer customers an uncomplicated, time-efficient weeknight meal solution at an unbeatable price. 

Winning the box

Thanks to their affordability and ease of use, CPG brands have a running start in this competition. To appeal to a wide range of consumer tastes and lifestyles, this category can create customizable solutions that are based in a deep-rooted understanding of their consumers and shoppers while also tapping into an organization’s archive of recipes. A potential hurdle for brands would be the need to include non-CPG products, such as fruits and vegetables — a staple of most recipes — in the box. Solving for this would require incorporating fresh ingredients, overcoming limitations of their product line, determining the right balance of their products and potential partners, as well as figuring out an efficient way to deliver kits. But how? 

The simplest solutions may be found via partnerships with retailers, preferably ones that have shown an interest in building same-day delivery into their businesses like Walmart or Target (via Google Express). Just imagine: Kraft partners with Walmart. They offer in-store pickup or delivery (for a nominal fee) of complete meal solutions. The solutions can be customized based upon dietary restrictions, time limitations, calorie count, and recipes could be delivered via a mobile app.

CPG brands can handle production, marketing, and the user experience while letting retailers handle distribution. Since shoppers will likely still need to go to the grocery store as kits don’t eliminate the need for shopping entirely, CPG brands are adding incremental value in the form of pre-packaged bundling (which frees up valuable shelf space) and, at the same time, creating loyalty among stores. In instances where delivery is possible, retailers can charge a premium and unlock a previously untapped revenue stream.

In both instances, by incorporating incremental non-CPG purchases into the box, it is also a win for retailers. The key to CPG success will be playing to its strengths to win against niche competitors by appealing to a broad audience, at an attractive price, and relying on its strong partnerships and existing relationships with major retailers.