Retail is expected to be key to the future of meal kits. (Photo by Ashley Nickle)
Market research firm Packaged Facts projects “healthy” but slower growth for meal kit sales in the years ahead.
The company estimates the U.S. meal kit market will have $3.1 billion in sales in 2018, up nearly 22% from 2017.
Packaged Facts foresees the industry continuing to grow through 2023, with the pace of growth declining steadily over the coming years, according to a news release.
“The meal kit market is highly dynamic and prone to fluctuations, with the top meal kit providers falling in and out of favor since their introduction in the past few years,” David Sprinkle, research director for Packaged Facts, said in the release. “Further complicating things, market expansion is expected to be much more reliant on alternative purchase venues than the traditional subscription delivery model due in part to the convenience and flexibility of online shopping.”
The company expects retail will be an increasingly important component of the business.
“It is unsurprising that many meal kit companies have been struggling to attract new customers and maintain existing ones under the subscription model,” Sprinkle said in the release. “Paired with the retention problem is the struggle with attaining profitability due to the high costs of shipping fresh ingredients directly to consumers. These challenges demand that meal kit companies tweak their business models and find alternative ways to reach customers, as the potential market for meal kits as a product is much larger than the interest in meal kit delivery services as they currently exist.”