Meal kits are a small category with the potential to have a significant impact on the traditional and online grocery retail market, according to research from Nielsen.
Meal kits contain pre-portioned ingredients and recipe instructions for a complete meal that shoppers prepare and cook themselves.
During the past eight months, the number of Australian households that have made a purchase from meal kit brands HelloFresh and Marley Spoon was 1.5 per cent of total households (around 150,000).
Nielsen Retail Industry Group Associate Director Aline de Sena says if the Australian market follows the trend of the US, this could represent one million Australian homes buying meal kits in the next 12 months.
“Understanding who this meal kit shopper is and their reasons for choosing this emerging consumption model is key to unlocking future opportunities for both retailers and brands,” she said.
According to Nielsen, HelloFresh and Marley Spoon customers tend to be affluent shoppers, with nearly eight-in-10 having a higher wealth than Australian shoppers. They are also more likely to be younger (primary household shopper aged less than 45) and to be families and young transitionals.
But what makes HelloFresh and Marley Spoon shoppers so unique, according to Ms de Sena, is their loyalty and willingness to spend for the convenience and delivery of groceries to their front door.
“HelloFresh and Marley Spoon customers are high spenders, less likely to shop in-store ⎼ heavy fresh-produce focused customers have a high repurchase rate,” she said.
“Over the past eight months, HelloFresh and Marley Spoon customers spent, on average, $78 per purchase, which is $28 more than the average supermarket total spend. For retailers, meal kits could potentially be used to increase basket sizes, as shoppers are demonstrating a willingness to pay more for convenience.
“For example, Woolworths recently launched the ‘Ready-to-Create-Bag’, a new initiative to offer a convenient solution to customers who want to cook from scratch without the hassle of shopping for all the ingredients. And recently, Coles launched a convenient fresh offering, ‘combo boxes’, which contain a mixture of fruit and vegetables, eliminating the need for shoppers to choose healthy ingredients.”
Ms de Sena says meal kits tick a lot of boxes for Australian shoppers, as they resonate through their convenience of delivery to the front door, healthy eating through their fresh ingredients, reduction of food waste, and portion control.
“Meal kits are a powerful source of growth for retailers and manufacturers,” she said. “Harnessing this will help businesses be part of the success in this growing online grocery landscape.”