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meal kits

July 23, 2017

Coca-Cola Jumps On Meal Kit Bandwagon With Chef’d Beverage Pairing

Amazon entered the meal kit delivery game and Blue Apron’s stock doesn’t look great, but that hasn’t stopped other competitors from continuing to diversify their offerings and partner with big names. The newest brand to jump into the fray is Coca-Cola, partnering with self-described “online gourmet meal kit provider” Chef’d to send consumers meal kits that include pairings of Coke or another Coca-Cola owned product with the meal.

According to an interview with Beverage Daily, Coca-Cola has dipped its toes into the dinner space before but the partnership with Chef’d is the first official commercial activity. The meal kits, called “Daily Meal Inspirations” include meals like Beef Short Ribs paired with a bottle of Coke to roasted chicken with Dasani sparkling water. The meals range from $27-$42 for two people (not the cheapest meal kit offering out there) and can be ordered on the Chef’d site.

Given a number of meal kit companies trying to capture consumer mindshare, it’s not surprising to see brands like Coca-Cola try to capitalize. But this partnership isn’t the most robust in terms of delivering something truly unique – and do consumers want a can of soda sent with their meal for a premium price? Maybe. It seems like Coke and Chef’d are trying to recreate the convenience of a restaurant experience – a meal and a drink – but instead of being delivered, fully prepared and cooked, by a waiter, it’s being shipped in a box in ingredient form to your front door.

Chef’d’s big claim to meal kit fame is their lack of a subscription model, allowing consumers to choose from over 300 online recipes and have them shipped to their doorstep as soon as the next day. The meals come portioned for two or four people and the company has offerings from gluten-free to vegan.

They do offer a meal plan – aka a subscription service – for customers who want a regular box delivered, but the on-demand style gives people who don’t want the commitment but do like the convenience or variety a meal kit service offers. So the new Coke meals will be available to consumers without a subscription attached, which may be one of the reasons the brand chose Chef’d as its first meal kit partner.

Chef’d has attracted other name brands in Big Food, including receiving a recent Series B investment round from Campbell’s for $10 million. Their total funding raised to date is just over $27 million.

July 19, 2017

I Made Dinner With An Amazon Meal Kit. Here’s My Review

Amazon can be kinda cruel.

Think about it: Blue Apron, arguably the biggest name in meal kit delivery, works for years to create a new way for consumers to make dinner, eventually becoming the most successful meal kit company in a crowded field and, just after they have an initial public offering to pay back investors and employees for all their hard work, Amazon waltzes in with a meal kit service of their own the same exact month to send Blue Apron’s stock tumbling downward.

Brutal. But hey, this is Jeff Bezos we’re talking about.

Bezos Prime

Does that dude look like he means business? Yes. Yes he does.

But Blue Apron’s bad fortune is my luck since I live in the Seattle market, where Amazon tends to roll out new food initiatives first. When I read yesterday the company was already shipping its meal kits, I decided to order one.

So here is my review. Before I start, it’s worth noting I will be comparing my experience with Amazon’s meal kit to that of Blue Apron. Why? It’s what I know. I subscribed to Blue Apron for about seven months last year and, as a result, Blue Apron is my main point of reference when it comes to meal kits.

The Order Experience

When I learned that Amazon is already shipping their meal kits in the Seattle market, I went to the site and checked out the meals available. And while I didn’t expect to eat an Amazon meal kit for dinner last night, when I saw the company offered same day delivery on their meal kits, my dinner plans suddenly changed.

A few observations about the order experience. First, I counted a total of sixteen available meal kits. I liked having the choice of that many meals, something I didn’t get with Blue Apron in a specific week, which gave me the choice of four meals to choose from every week, two of which they would ship to my house.

Second, same day delivery is a big deal. With Blue Apron, I needed to pick my meals roughly a week in advance to give the company enough time buy, prepare and ship the meal to me by early the next week. With Amazon’s meal kits, I ordered that morning before 10 AM, and it was on my porch before 5 PM.

For those of us who often don’t plan that far in advance, this is a nice feature. It also gives me more flexibility since I can order one meal or five meals in a given week. Blue Apron subscriptions offered only two options: a two-person meal plan with three meals per week and the family plan, which is two meals a week.

One advantage of Blue Apron is they offer family meal kits (a serving of four). All of Amazon’s meal kits, at least currently, are portioned to serve two people. While this could be a problem if I want to cook for my family of four, I figure it’d also be easy enough to order two Amazon meal kits for one meal. But more packaging means more mess, so I suspect Amazon will offer more portion options in the future.

Pricing is similar to Blue Apron on a per-meal basis. Blue Apron advertises meals priced at less than ten bucks per person, and that in line with all of the Amazon meal kits, which came in at $8-9 per person.

The Unboxing

This is where things got exciting.

The meal kit arrived at my home in an Amazon Fresh bag, inside of which there was a package wrapped in an insulated bag.

The Amazon Fresh bag with insulated meal kit inside

When I opened the insulated bag, I saw a single box with multiple ice packs.

Inside the Amazon Meal Kit delivery bag

When I pulled the box out of the insulation bag, I was surprised at how small the package was. Granted, it was a serving for two, rather than the family meal four-person servings I would get from Blue Apron, but I was surprised nonetheless at the small size of food box.

Below is a video of my “unboxing” of the meal kit.

Let me emphasize that the packaging and presentation of the Amazon meal kit was probably the most impressive part of the whole experience. I liked that all the food was packed tightly in a well-designed box. Contrast this with Blue Apron, where ingredients are, for the most part, packed loose in the big insulation bags.

Another small observation, but possibly an important one. The chill packs in the insulated bag were fully recyclable. The plastic exterior of the chill packs had a giant recycle symbol. Verbiage below that said the contents inside is plain old water and that I could empty and recycle the bags. I like that idea because other meal kit services (not just Blue Apron) often have some chemical concoction inside that is not recyclable.

Amazon meal kit chill packs are filled with water and are recyclable

The Ingredients

Next, I assessed the ingredients. Much like Blue Apron, the number of ingredients I had to work with always surprises me. I guess this is in part because if left to my own devices, I often cook simple meals and when I do cook with recipes and a bigger meal plan, I find it it’s a lot of work to assemble everything I need. With a meal kit – whether it’s Amazon or Blue Apron – the hard work of shopping and assembling ingredients in the right portions is already done.

You can see below what my unpacked box looked like:

My meal kit ingredients

The main difference I noticed with my Amazon meal kit and a Blue Apron meal kit is Amazon has done more of the work by chopping the vegetables. Blue Apron kits come with whole vegetables, and you chop them according to the recipe instructions. Some meals had me chopping five or six vegetables to prepare a meal. For this meal, which included sweet potato fries, a bacon jam with onions and a cole slaw, all the vegetables with the exception of the pickle were already chopped.

Whether this is good or bad comes down to personal preference. If you prefer whole, fresh food or like doing more of the prep work for your meal, Blue Apron makes sense. If you want to save a little time or find chopping veggies tedious, then I would suggest Amazon’s meal kit service is better in this regard.

Time To Cook

With my ingredients ready to go, it was time to cook.

Much like Blue Apron, Amazon includes a good looking instructions and ingredient card with their kit. The card, with ingredients on one side and cooking instructions on the other, was smaller than the Blue Apron cards.

Here’s the Amazon instruction card for my Wagyu beef burger meal:

The Amazon meal kit recipe card

At first blush, the meal I chose looked really simple. After all, how hard can making a burger be?

And while it was straightforward, I found the extra flourishes Amazon put into the recipe to make this, as they put it, a “burger for a true gourmand,” enjoyable. They had me make a bacon jam with onions and maple balsamic, finish the burger in the oven, and toss the sweet potato fries in a delicious seasoning blend. In general, it wasn’t too much work, but enough to make me feel like I could say I cooked something.

Making bacon jam

And just like Blue Apron, I found the 30 minutes of promised cook time was action packed. Once I finished one thing, I was onto the next and, all along the way, I was using timers (Alexa, naturally) as I orchestrated the cook.

In 30 minutes or so, I had the meal ready to plate.

The Meal

Here’s the plated meal:

The finished meal

I was feeding my son, who isn’t a fan of onions or cole slaw, so his was more basic. Mine was, more or less, as pictured on the instruction card.

It was good. Wagyu is high-quality beef and, add in the artisanal bun, the bacon jam, and the premixed burger sauce, and it was one tasty burger.

It was also a very big burger. The meal kit included a full pound of ground beef for a two person meal. I normally don’t make half-pound burger patties, but I decided to go for it, and it resulted in a very fat burger that was hard to get my mouth around (that’s a good thing).

While I think one meal is too small a sample size to generalize about Amazon’s meal kit portion sizes, if my meal is any indication, Amazon is not scrimping. Blue Apron four-person portions sometimes felt a bit light when it came to the main course, but satisfying.  One thing I will be watching for as I sample other meal kits is if generous portions as part of Amazon’s overall strategy.

Despite the size of the meal, I will say it was good enough to finish the plate in its entirety.

Summary

Bottom line, I was happy with my Amazon meal kit and will be trying other meal combinations and recipes.

Last night’s experience tells me Amazon has put in a lot of time to fine-tune this product. The purchase experience, delivery time, packaging and presentation, cooking experience and quality of meal were all high-caliber.

Combine that with company’s strength in online commerce, customer loyalty, delivery infrastructure and – as of last month- their move into brick and mortar grocery delivery, and Amazon’s move into meal kits should be worrisome for Blue Apron and any other company in the meal kit space.

Join The Spoon editors and folks creating the future of the kitchen at the Smart Kitchen Summit. 

June 13, 2017

Blue Apron’s Biggest Problem Pre-IPO? Finding Loyal Customers

Blue Apron’s impending IPO has been the subject of much speculation and anticipation in the recent months, especially as the meal kit delivery market has experienced great fluctuation in the past few years.

The S-1 filing has been analyzed by hordes of financial analysts, but perhaps the most important deep dive into Blue Apron’s documents was around its customer acquisition costs and ongoing challenge to retain a core customer base.

Daniel McCarthy, a professor of marketing at Emory University, conducted an analysis of Blue Apron’s subscriber retention and churn rates using data found in the S-1 and financial modeling. The S-1 itself leaves out the raw data on the company’s retention and churn rates, but what McCarthy found using marketing costs and costs per customer, he could determine the number of customers they acquired in any given period.

So what did he find?

Blue Apron likely acquired around 2.9MM subscribers over its life and then lost 1.9MM subscribers to finish Q1 of this year with 1MM total. Using a customer-based corporate valuation model, McCarthy plugged in the customer numbers and found that close to two-thirds of Blue Apron’s customers leave within 6 months. The meal kit startup spends, on average $94 to acquire new customers but only makes $25 per month in gross profit off of that new customer – meaning it takes about four and a half months to break even. A problem when many new customers aren’t sticking around for that long.

Does Blue Apron have a problem, or does the problem lie with meal kit delivery in general?

It’s hard to say that the problem is inherently Blue Apron’s but rather that they have struggled with being an early leader in the market and enjoyed success before competition flooded the space. With an array of meal kit options to choose from and dozens of offers for a box of free meals to try new services, customers are harder to lure and even harder to keep. Marketing and customer acquisition is going to keep getting more expensive as more companies try to compete for dollars and as the novelty of meal kits begins to wear off.

“Blue Apron isn’t getting nearly as much out of its marketing spend as it once did. The company’s marketing expense more than doubled in the first quarter.”
– The Motley Fool

The other challenge that the entire meal kit industry faces is the stickiness of their basic product. Meal kits are often easy for consumers to try – companies make it simple to sign up and offer quick delivery and attractive new customer promotions. But they are a huge departure from the way we have been taught to shop for and purchase our food – and while they might be more convenient in some ways, they are inconvenient in others. If the kit doesn’t come in time, a last minute trip the grocery store is needed. Or if the meals that come all seem too complicated or involved, it might sit in the fridge and spoil while the customer picks up quick take-out. As much as we want to believe we’ll eat healthy and cook gourmet, fresh meals every day of the week, life often gets in the way.

Eating meal kit style is a behavior change. Some find it enjoyable and enlightening, introducing new flavors and methods of cooking in foolproof ways with ready to cut and cook ingredients. But ask anyone if they’ve tried Blue Apron or any of their competitors, and you’re likely to find many of them will say yes, but are no longer an active customer.

How might Blue Apron and the rest of the industry change this? The move to put meal kits into grocery stores for pickup is certainly one way, getting rid of the timing and delivery piece that may deter some from continuing with the service. It also fundamentally changes the subscription mode and doesn’t solve for that business model much except to change it entirely.

There’s no question that Blue Apron’s IPO will be watched by many and read as a sign of the future of meal kits as the convenient and healthy future of cooking.

June 2, 2017

ChefSteps Expands Further Into Food With Launch Of Pre-Cooked Meals

Back in February, I  wrote about ChefSteps’ plan to create a meat ‘marketplace’ that would connect “independent ranchers with ChefSteps users, offering them direct access to high-quality meat and ingredients at great prices.”

As it turns out, this effort was part of a larger initiative to expand into food sales that is starting to come into fuller focus. The most visible part of this foray into food sales is the company’s growing business selling meat and fish sourced from local food providers in the Seattle and Portland markets. In the Seattle market, the company offers fresh meat and fish from four local providers (three for meats, one provider of fresh fish). The kits for sale on the company’s website range in price from $79 to $239. And yes – one package, the ‘Mountain of Meat,’ includes 30 pounds of steaks. (Holy meat sweats).

And now, the company has started selling pre-cooked, frozen meals.The pre-cooked meals are sold as what ChefSteps is calling, ‘Joule On-Demand BBQ.’ The meals are all single-serve portions and range in price from $7 to $12. Unlike the fresh meat and seafood, the pre-cooked meals from ChefSteps offer local shipping as a fulfillment option.  Deliveries are fulfilled by PostMates.

The Mountain of Meat meal kit from ChefSteps

These pre-cooked meals appear similar to those announced by Nomiku in April. As with Nomiku’s new meal kits, the BBQ meals are intended to be prepared in a shorter amount of time than traditional sous vide, usually less than an hour.

This move into pre-cooked meals by both ChefSteps and Nomiku shows the growing effort by both companies to expand the appeal of sous video to a broader audience.  Sous vide has traditionally appealed to foodies who are willing to invest more time in preparing chef-like meals, but with pre-cooked meal offerings, the companies believe sous vide becomes more appealing to those home cooks who prioritize convenience.

Of course, pre-cooked meals aren’t the only way to make cooking with sous vide easier for the home cook. ChefSteps and Anova have both been busy launching hands-free voice interface integrations this year, and in February ChefSteps became the first cooking appliance company to launch a chatbot for cooking with their Facebook Messenger bot.

So what became of the meat marketplace teased by the company’s February job listing? According to ChefSteps CEO Chris Young, the idea was to create a nationwide marketplace for “sous vide ready ingredients during the holiday season last year in partnership with the Snake River Farms brand.” As part of the effort, they sell meats nationwide to help ChefSteps customers get, as Young put it, a “center-piece protein for their holiday meal.”

As they worked on the plan, ChefSteps realized that costs of setting up a nationwide delivery system would be too high at this time, so for now the company is content to work out the kinks while selling meat and delivering pre-cooked meals in the Seattle and Portland markets.

“We’re continuing to experiment based on the positive feedback we’re getting from our Seattle and Portland customers, and we’re very aware that we have customers across the United States,’ said Young. “We definitely want to be able to serve those customers asap, but only when we think our service will deliver the experience and value our customers expect from us.”

Make sure to subscribe to the Spoon newsletter to get it in your inbox. And don’t forget to check out the Smart Kitchen Summit, where ChefSteps CEO Chris Young and many others will speak at the first and only event about the future of food, cooking and the kitchen. 

April 24, 2017

Newcomers Try to Innovate and Deliver on the Lucrative Baby-Food Market

Baby food is big business. While it might not be an industry ripe for innovation, several startups feel they have the magic formula to grab marketshare and mindshare.

One of the latest to enter the fray is Little Spoon, a San Francisco baby food manufacturer and delivery company in its early “invite” stage.  The company believes it can provide our little ones with healthier meals offered with great convenience. According to Statista, the baby food market in the United States has more than seven billion in annual sales. To date, a few newcomers such as Caer (now Yumi) and Gather have tried and failed, or been forced to rebrand.

The biggest challenge to break into the baby food market is competing with giants, such as Gerber, as well as a growing number of organic brands. Many new baby food meal kit ventures, even with offering delivery, have yet to successfully crack the baby food market.

Little Spoon co-founder Michelle Muller does have a new angle which she believes will give her company a real shot at success. Little Spoon uses a technology known as HPP (High Pressure Processing) which is a cold pasteurization process that improves shelf life, while allowing the food to retain its natural nutritional value.

“Modern parents have been forced to choose between two options when it came to feeding their children: Either they can spend hours a day cooking fresh baby food themselves or they can buy highly processed, in-store options that are filled with sugar, low in nutrition, and in many cases are older than the baby eating it,” Muller told tech publication Snapmunk.

She continued, “It is crazy to us that parents have to make the tradeoff between their baby’s nutrition and their own time and sanity. Using the latest in HPP technology, we change all this by making fresh and homemade baby food available anywhere in the nation, direct to your door, and at an affordable cost.”

Little Spoon - Organic baby food, delivered.

In most ways, the Little Spoon service is similar to other subscription meal delivery providers. Choices range from one meal per day at $4.99 per meal through a three-a-day plan at $3.99 per. Customization includes selecting a child’s preferences such as flavor and texture. The company currently is accepting customer invites, with no start date set for delivery.

Even though the landscape is riddled with failures, Little Spoon is not alone in sensing opportunity in the baby food space. Thistle already is in market with traditional meal kits but has expanded to include Thistle Baby--prepackaged baby food meal kits. The difference for this San Francisco Company is that the meals are plant based and come flash frozen to customers in California and Nevada. Also a subscription service, the meals currently cost $2.15/each or $45 per box, including free local or overnight delivery. Each box includes enough food for 21 meals or one week’s worth of food.

Similar to Little Spoon, Chicago’s Nurture Life uses a process called MAP (modified atmospheric packaging) which allows food to stay cold and fresh without freezing.  The company says it sources locally whenever possible and also emphasizes organic ingredients. Nurture Life states that it uses a team of chefs skilled in appealing and customizing meals to meet a wide variety of young diets. The subscription plans offer food for babies up through 18-year-olds. An eight-meal-a-week plan for a baby is $45, while a 14-week plan clocks in at $75.

Then there is Raised Real, a startup by Orange Chef cofounder Santiago Merea (see our interview with Merea here). Raised Real, which offers subscription meal kits with raw ingredients, has its own baby food machine called the Meal Maker that steams, blends and purees the raw ingredients into finished baby food. The Meal Maker comes complimentary with a biweekly or monthly subscription plan or can be purchased for $99. A monthly plan runs $180, or $4.50 per meal.

March 22, 2017

Martha Stewart + Amazon Partner To Bring You Dinner Tonight

The best part about meal kits is that they take away the need to meal plan and decide what’s for dinner. Each week, a box arrives at your door and gives you 3-5 preplanned dinners with exactly the right ingredients to prepare and cook each. The worst part? The amount of planning it requires to get the kits in the first place.

The problem meal kits solve is the age old question – what’s for dinner in the future – but they don’t tackle the very common, end of the week and out of groceries question – what’s for dinner TONIGHT? If you’re like me, you have at least one night in the week where you’ve made all your meals, you haven’t grocery shopped yet, and take out just doesn’t sound appealing (or healthy). Martha Stewart (and Amazon) are here to help.

Martha Stewart partnered last year with Marley Spoon to create a branded meal kit, joining the 100+ other meal kits out there, many of them also backed by a celebrity name. But they recently announced a true stand-out feature – partnering with AmazonFresh, Stewart & Marley Spoon will now ship their meal kit the same day you order it.

According to Inc, who has the full scoop,

Users can now order a single meal for two adults in the morning, and find it on their doorsteps that evening.

The company hopes that the move will give them an edge in the meal kit market, and welcome new consumers into the fold. The typical meal kit consumer tends to be 25-44 – Marley Spoon hopes this move might appeal to older consumers as well who aren’t able to leave the home as much. It seems more likely that it will open them up to people who aren’t great at planning meals all the time – busy parents, or busy professionals in general – and want a quick, last minute solution that isn’t takeout.

The meals can be ordered in the morning and will run about $24/meal for the food and on demand service. Not cheap, but probably similar to what a restaurant-quality takeout meal would cost and with fresher, healthier ingredients.

Amazon, on the other hand, is clearly interested in all areas of food commerce – from the grocery store to fresh food delivery to meal kits, they’re putting their footprints in almost every area.

March 14, 2017

Want To Eat Like A Star Quarterback? There’s A Meal Kit For That

Tom Brady and the New England Patriots in general usually elicit one of two reactions: complete fanboy love or abject hatred. But if you’re in the love fan group or you’re just someone who wants to follow the diet plan of a superstar athlete, then meal kit delivery service Purple Carrot has a new product for you.

Called TB12 Performance Meals, a nod to the quarterback and his Patriot’s team jersey, they were designed to give consumers a super healthy, plant-based, gluten-free weekly meal plan that mimics Brady’s own regimen. According to Purple Carrot, the TB12 meals were designed around the needs of someone who requires fuel that promotes healing from intense physical workouts and fuels the body to encourage peak performance.

The TB12 philosophy is focused on preventing injury and promoting accelerated injury recovery through holistic, whole-body wellness, incorporating exercise, recovery, and hydration & nutrition concepts like those expressed in TB12 Performance Meals.

The meal kit comes with ready to prep ingredients, similar to competitive meal delivery kits like Blue Apron, Hello Fresh and Sunbasket but is higher priced at around $13 per plate or $78 for the week at only 3 meals a week. The meals are highly specialized and created to be high in protein and low in sugar, soy and processed ingredients. Purple Carrot points out in the FAQs that the TB12 meals are different from their traditional offerings, designed specifically for individuals that have a higher metabolism due to increased daily activity and are only available for 1-2 people in each box.

Brady’s diet and commitment to personal wellness are well known among fans and was chronicled in the Boston Globe extensively. Purple Carrot approached Brady last summer and the pair began to discuss the potential meal delivery partnership. They worked to identify meals that Brady regularly eats at home and on the road and crafted workable recipes that could be recreated in a meal kit.

In a statement to Fortune, Purple Carrot Founder & CEO Andy Levitt said about the opportunity, “The meal kit industry has grown significantly since I launched Purple Carrot two-and-a-half years ago. Partnerships with great organizations like Whole Foods Market, and incredible people like Tom Brady, enable us to elevate our brand even further.”

Brady isn’t the first celebrity to cash in on their personal brand and the meal kit boom – Martha Stewart partnered with the Marley Spoon to create one her own along with countless celebrity chefs like Michael Mina and Jamie Oliver. Athletes as food spokespeople is a well-known advertising tactic and it’s no surprise that companies will look to increasingly popular products like meal kits to continue that trend as the way we cook and consume food evolves.

The TB12 brand is something Brady has worked to build out with other offerings as well, partnering with Under Armour to offer apparel, creating a foundation to support elite athletes who become injured and creating a personal gym and fitness program. TB12 Performance Meals can be ordered today and boxes will start shipping on April 3rd.

December 9, 2016

DIY Food Kits Bringing Fundamentals Back To The Kitchen

A good deal of technology we see entering the kitchen involves helping us to be better at preparing food. Whether it’s guided cooking systems or pro-level tools that help average chefs make higher quality meals, the focus seems to be on helping people cook more, and more easily. But there’s another movement quietly taking shape – one we’ve talked about in the create your own beverage space, with products like PicoBrew’s at home brewing system – that involves DIYing food itself.

DIY food creation isn’t exactly a new concept; from things like cheese to yogurt and pasta to bread, purists and hobbyists alike have been making their own foods from raw ingredients since, well, the beginning of time. In fact, before the term DIY acronym existed, before we used artisanal to mean anything not made by a machine, there were people, without modern technology, churning butter and fermenting milk and rolling wheat and oil and water into dough.

But DIY food kits – easy-to-use and prepackaged kits that allow someone with little experience to create food from raw ingredients – are on the rise. Julie Feickert, CEO of DIY food kit company Cultures for Health, attributes the growth of mainstream attention on their products to the growing awareness and concern for healthy living. In an interview with Food Navigator, Feickert explained,

“More and more people have diet related conditions, gut health conditions that are pushing them to step back and say, ‘i need to control my food…I need to ultimately have a real handle on what my food is.”

The nostalgia for purer foods, ones that are less processed and locally sourced are often more appealing and the rise of things like farmer’s markets going digital with Amazon Fresh delivery and sales growth of DIY food kits are just a few examples that point to this growing consumer preference.

But raw materials, even when packaged together neatly with instructions to remove the guesswork, aren’t alone going to change consumer behavior when it comes to making foods from scratch. Today people are busier than ever and put a heavy value on convenience in addition to health and wellbeing. So while the DIY food kit market is experiencing a rise, the real magic will come when there’s technology to support it.

Read more about DIY food kits at Food Navigator.

November 17, 2016

Food Tech Investment Report: Fall 2016

Lighter fare with a hint of international flavor.

No, that’s not what’s on the menu today, but instead a summary of the latest funding, M&A and partnership report from Rosenheim Partners, a strategic and financial consulting firm focused on the food-related tech and media sectors. Led by consultant Brita Rosenheim (also a Smart Kitchen Summit 2016 speaker), the roundup looks at the sector overall and dives deep into a variety of deals.

We combed the last roundup in the latest report, published at FoodTech Connect, and found interesting pieces to highlight. As Rosenheim notes, the deals for the past few months have been pretty light, with a decent amount of activity abroad. Meal kit delivery and grocery delivery continue to pop up in the U.S. food tech sector, including recent funding announcements:

  • Home Chef, a Chicago-based meal kit delivery startup picks up $40 million in a Series B round. The investment brings Home Chef’s total to $50 million in 2016 alone, and the startup argues their big differentiator is its focus on home-cooking, friendly menu items (think: stuff your kids might actually eat) and the ability to customize your box from a deeper variety. The startup is growing rapidly, with 600 employees and a reported 1.5 million meal boxes delivered each month.
  • Fresh Direct, amidst rumors of an IPO or sale, announced an investment of $189 million to add to its manufacturing capabilities and move into new geographies. The company is currently focused on the east coast (NY, NJ, PA, CT) but has been cash positive since 2010 and runs FoodKick, its on-demand service that brings food in an hour to customers. Operating since 2002, the company has fought hard to stay alive alongside big competitors like AmazonFresh and more recently, the rise of meal kit delivery startups.
  • NYC home meal delivery startup Umi Kitchen raised its seed round, bringing in $1.4 million to grow its mobile app that connects home chefs in Brooklyn and Manhattan with hungry customers. The idea of making prepared food delivery easier and more ubiquitous isn’t new, but Umi’s differentiator comes in the kind of food they’re offering – home cooking, straight from someone’s actual home. Umi’s also not trying to reinvent or invest in a delivery infrastructure – they’re taking advantage of Postmates presence in NYC to bring meals to their customers.
  • We recently wrote a piece about Brava, the stealth smart kitchen startup led by former media execs at Disney and the former hardware lead at smart home company August. What exactly they’re working on remains a bit of a mystery, but it will be a smart kitchen appliance – maybe even a smart oven. They’ve just picked up $12 million A round investment led by True Ventures and plan to launch their product sometime in 2017.
  • The last interesting one comes in the form of a partnership rather than an investment – one that has implications not just for consumers but food brands as well. Hershey’s has announced its intention to partner with Chef’d, an online meal kit store, to create branded dessert meal kits. The idea of a meal kit with chocolate dessert recipes and ingredients sounds pretty yummy, but what Chef’d is doing is even more intriguing. Partnering with content companies like Allrecipes and Good Housekeeping and now food brands like Hershey’s, Chef’d is not just delivering meal kits. They’re taking recipes from familiar consumer brands, recipes that home cooks are likely to be preparing in their homes, and bringing them to life using the convenient form factor of a meal kit. And for brands, Chef’d meal kits are in many ways branded content – a less sales-y way to build awareness and cultivate loyalty.

While the food tech investment roundups continue to demonstrate the popularity of meal kits and food delivery, we’re starting to see the connected kitchen emerge regularly as well. Startups like June and Juicero have picked up sizable investments in within the past few years and we believe 2017 is where we’ll start to see even more break throughs in the space.

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