There seems to be a paradox developing in American eating habits that tends to alarm or comfort restaurateurs, depending on which half of the equation they believe.
On one hand, Americans are still consistently spending more on food from non-grocery establishments (including restaurants and bars) than on groceries for the second year running, with no indication that this cultural shift will subside.
There are a lot of potential factors to that shift, including a greater influx of work moving into metropolitan areas with more access to restaurants (and perhaps more difficult access to grocery stores), as well as longer working hours, more dual-employed households, and stronger marketing across the board for restaurants.
On the flipside of this statistic, we are also seeing an increase in meals being eaten at home, up to five per week, which feels like an inherent contradiction to the previous claim. However, eating at home doesn’t necessarily mean home-cooked meals. In a recent study conducted by the NPD Group, consumers reported that less than 60 percent of dinners eaten at home are actually cooked there. This points to a rapid increase in take-out and delivery from the growing fast casual sector, as well as quick service and casual establishments.
But restaurants aren’t the only delivery option, nor are they the only factor in the difference between grocery and non-grocery food establishments. Home delivery meal-kit programs like Blue Apron, Plated, and Marley Spoon (the Martha Stewart branded company) are included in statistics that we normally attribute solely to the restaurant industry.
Consumers can sign up for the service, which will deliver all the uncooked, but pre-measured ingredients one needs to easily prepare an easy, “home-cooked” meal. Each company requires a slightly different level of competency in the kitchen, but none rely on the purchaser to be an accomplished chef — or indeed have any of the ingredients in their pantry or refrigerator prior to cooking.
The rise in popularity of these home delivery meal-kit programs could be one of the x-factors in this shift away from grocery purchases. Are they a threat to the restaurant industry as a whole?
Taken in its whole, the restaurant industry is an almost $800 billion sector of the U.S. economy. Its expansive diversity and easy accessibility to the average consumer puts it in a unique position in everyday American life. And while food-consulting firm Technomic predicts that the meal-kit service market will grow to between $3 billion – $5 billion over the next 10 years (based on current adoption rates), that’s a drop in the bucket compared to other forces that could threaten the restaurant industry — namely, an overall dragging economy, unpredictable politics, or Federally mandated wage increases.
In reality, home delivery meal-kit programs could be more of a threat to grocery store purchases than dining decisions.
“Our hope is that people never have a reason to go the grocery store,” says Matt Salzberg, co-founder and CEO of Blue Apron.
Pricing is the key, according to Salzberg, who calculates that a single serving at Blue Apron costs $9.99, which he presumes is 60 percent less than if you shopped for the ingredients yourself. That, of course, assumes one does not already have a stock on hand of the ingredients necessary for any one dish.
Consumers who cook frequently will more likely have a reserve of staples in their pantry. But on the other hand, the allure of the home delivery meal-kit — that ability to cook without knowing how to cook — may be lost on the amateur chef anyway.
That being said, these programs do help home cooks push out of their comfort zones and try new cuisines and new ingredients they might not have picked out if they were searching for recipes online. And the “only what you need” portions that come with each delivery mean that, unlike for grocery store trips, customers won’t be stuck with a big jar of an ingredient they used for one dish but don’t see using again.
What home delivery meal-kits can’t do, of course, is replicate the dining experience, from atmosphere to service, that consumers find themselves drawn to, often more than the food itself. But there are things your establishment can do to both capitalize on the popularity of home delivery meal-kits and stave off any incursion into your market.
1. Get interactive.
Think about capitalizing on the excitement and novelty of preparing your own food by emphasizing the cooking experience in your restaurant. Opportunities to either assemble ingredients (like pizza toppings or stir-fly components) prior to cooking or watch a chef work their magic up close (on an open grill or central pizza oven) could fulfill that curiosity about the culinary process.
Offering to-go kits of your own can be a viable option for any restaurant that already has a pick-up or delivery component to their service. It takes a little more thinking to be able to deconstruct your meals in a way that can be easily completed — and taste comparatively to that of the in-restaurant experience — but in terms of infrastructure, you’re already there. A container of sauce, pizza dough, and pre-cut toppings. Uncooked pasta, fresh vegetables, and containers of oil and pesto. The options are only limited by your imagination.
2. Emphasize healthy choices.
Many diners today, particularly millennials, are choosing options like home meal-kit delivery because it feels healthier than your standard take-out fare. But that doesn’t have to be the case for your take-out fare. Restaurants that emphasize healthy options with fresh, locally-procured ingredients are attracting more diners than ever before. The idea of farm-to-table dining reflects the clean, healthy eating that customers of home meal-kit delivery are looking for — without even the little work required at the stove.
3. Refocus on breakfast and lunch.
One aspect of meal choice that companies selling meal-kits haven’t quite cornered is serving customers who want healthy, fresh choices for a meal other than dinner. By boosting up your menu on breakfast and (particularly) business lunch options, you’re cornering a market that other segments of the non-grocery food category can’t touch.
Plus, customers who frequent your restaurant for breakfast or lunch are prime subjects for advertising your dinner menu. If they like you enough to pop in for a bite, they are much easier to convince to return for a full service dinner with drinks and dessert.
4. Know your market.
Of course, price is always a consideration for consumers, no matter what their particular taste or interest. While it’s important to judge customer tolerance for your prices, it is never a good idea to discount or undervalue your service strictly to compete.
Think about your core audience. Are they couples or very small families that might be inclined to prepare meal-kits (which tend to be packaged for 2 or 4 servings)? Are you located in a metropolitan area that makes grocery shopping a chore? Or do you tend to cater to other size orders – larger families or singles for whom restaurant service (dine in or take-out) is already a more attractive option?
Designing opportunities for customers to choose you over staying home (or frequenting another restaurant) can only happen if you pay attention to who they are and what they really want. Never assume and lose out on a great opportunity to serve your customers. After all, who doesn’t strive to be the easy and uncomplicated answer to “What’s for dinner?”
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