A meal kit contains the ingredients necessary to prepare a meal, and many are intended to be balanced and healthy. Meal kits are being marketed for all occasions to provide freshly prepared meal options. Kits answer not only the question of “What is for dinner,” but also, “Do I have everything I need?” These kits also provide a solution to those who want to eat healthy, allowing them to customize their order.

The growth rate is staggering. From 2018 to 2019, the meal kit market has grown by 36%. Most of the customers have incomes of $100,000 or more, and tend to be between 25 and 44 years of age. Many meal kits are ordered on a subscription basis, for a week, primarily for the 35-44 year old demographic. But that is changing rapidly. Only 12% of consumers bought meal kits last year, but 23% say they will buy meal kits in the future. Sales are shifting from solely on-line ordering to also in-store sales. Combine that with third party meal deliveries on demand, expect exponential growth because of increased convenience.

In fact, in 2018, Chick-fil-A test marketed “Mealtime Kits” at 150 restaurants across the Atlanta-area. The pitch was that it makes it easy to cook your own meal at home in 30 minutes using a recipe card and fresh, pre-measured ingredients. The Mealtime Kits are picked up at any participating Atlanta restaurant. These kits do not include freezer or ice packs, however, so they must be refrigerated. Each Mealtime Kit serves two people, so additional kits are needed for any additional people. The Mealtime Kit recipes take approximately 30 minutes to prepare, and Chick-fil-A tested five different Mealtime Kit recipes.

Customers were able to choose two of the following options: (1) Chicken Parmesan; (2) Chicken Enchiladas; (3) Dijon Chicken; (4) Pan-Roasted Chicken; or (5) Chicken Flatbread.  Mealtime Kits cost $15.89 each, and all featured Chick-fil-A chicken. The Mealtime Kit recipes are not considered vegetarian, vegan, or gluten-free but each ingredient is individually packaged so a customer could customize the meals at home to exclude any unwanted ingredients. Consumers could order a Mealtime Kit at a local restaurant using the drive-thru, inside at the counter, or via the Chick-fil-A mobile app, Chick-fil-A One, and consumers are not required to call ahead to place an order. The Mealtime Kits do not replicate Chick-fil-A menu items, though they do include some ingredients you’d find in a restaurant, including the chicken.

According to their SEC filings, operating only six days a week, Chick-fil-A reported $3.0 billion in revenue in 2018, more than a 13% increase over 2017. With system wide sales increasing over 16% to $10 billion in 2018, the average mall store reported over $2.2 million in sales and non-mall stores reported over $5.7 million on average.

Chick-fil-A has a catering program that will bring ready to eat Chick-fil-A products to customers. The Mealtime Kits, however, fulfill a different need as they are convenient to prepare and as convenient as visiting the drive thru. Given that the best part of the day for Chick-fil-A is lunch, picking up a Mealtime Kit for dinner seems even more convenient.

Availability of meal kits is shifting from a subscription model ordered on-line to in-store supermarket space. Online subscription companies have partnered with brick-and-motor groceries and supermarkets to offer their own packaged options. You will see supermarkets making space or “stations” of in-store meal kits. The next step is like to be franchise branded kiosks offering franchise branded meal kits.

Market leaders in food delivery, DoorDash, Postmates, and UberEats, often partner with restaurants, and the restaurants have incremental sales increases, although the fees of the food delivery services continue to erode restaurant margins. Today, the restaurants pay the majority of the expense of third party deliveries, but this is likely to shift to the consumers as the costs are not sustainable for restaurants. With a likely increase in competition, this delivery expense could be driven lower. There also may be some savings or revenue opportunities through customer data-sharing and point of sale system integration that will make delivery even more ubiquitous.

Those under 45 are all about taste and convenience. They not only want their MTV, but also fresh, customized meals now, delivered to their kitchens. Look for franchise companies once again to fill that need.