Meal kit business is booming. Among a variety of other benefits, consumers love meal kits for their convenience and time-savings. After all, with these offerings, there’s no need to brainstorm dinner options or go to grocery stores to get fresh ingredients. Some kits even provide pre-prepped ingredients or ready-to-eat meals.
Meanwhile, there’s huge value to be found for meal kit companies. Meal kit delivery services like Blue Apron, Hellofresh, Home Chef, and Sun Basket have become so popular, they’re now household names. And according to Statista, worldwide, meal kit revenue is estimated to grow to over $17 billion USD this year, and to over $25 million by 2027.
Of course, this value doesn’t come without its challenges. For merchants looking to succeed in the meal kit industry, it’s key to have the right tools and solutions in place to meet your goals—and your subscribers’ needs.
In this post, we’ll cover four common goals that meal kit services face. Then, we’ll explore the technological features and actionable tactics they can use to meet those goals and stand apart from the competition.
Key takeaways
- In recent years, the meal kit delivery industry has skyrocketed in popularity for the value it can bring to both merchants and consumers.
- For brands, meal delivery kits can be a powerful tool to increase AOV, boost customer satisfaction, allow for customization, and understand business growth opportunities.
- To achieve these goals, businesses can focus on strategies like choosing the right subscription management platform, cross-selling, upselling, and selling product bundles.
- Additionally, they can optimize the customer portal, leverage transactional SMS, and make the most of analytics tools to attract and retain customers.
4 priority goals & solutions for meal kit businesses
1. Increase AOV
When it comes to average order value, Food & Beverage businesses have an enormous edge. In fact, our research found that in both 2021 and 2022, Food & Beverage merchants held the highest overall AOV of any product vertical.
For meal kit companies, it’s key to capitalize on this advantage. Their challenge is to make it easy—and enticing—for customers to spend more with every order, whether that means purchasing additional meals or snacks, more servings, upgrade options, or something else.
Solution: Cross-selling & upselling tools
Targeted product recommendations via cross-selling and upselling are a key way to get customers to spend more in a single order. When brands become a trustworthy source of product recommendations, customers are more likely to take advantage of add-on or upgrade opportunities.
To succeed with cross-selling and upselling, it’s crucial to personalize and make your recommendations as relevant as possible for your customers. To do this at scale, ensure that your subscription solution has the capabilities you need, like cross-selling and upselling in the customer portal, via integrations, and more.
Solution: Product bundling tools
By nature, most meal kit services involve customers choosing the items that go into their box in every delivery. This makes product bundles a natural fit for build-a-box offerings like meal kit delivery systems.
Meal kit delivery services can also offer curated product bundles of select items. These can be based around different themes, meal types, or flavor profiles, and can work well as add-on items to complement an existing subscription. For example, you might offer a Mother’s Day bundle with the ingredients and recipes for a special brunch entrée, side dish, dessert, and beverage, all packaged together as a single purchase.
By bundling several products together, or allowing customers to bundle their own selection of products, you not only increase value for them, but also for your business.
2. Increase customer satisfaction
With so many providers available to customers today, meal kit companies are increasingly competing with each other for the highest levels of customer satisfaction. Meal kit customers don’t just want to receive their orders on the promised timeline. They also want to be able to easily make changes to their orders while on the go and make any adjustments they need, whether their budgets change or they need to skip a delivery when they go on vacation.
To meet these high customer expectations, it’s crucial to have a few key ecommerce tools in place—namely, the customer portal and transactional SMS.
Solution: An optimized customer portal
The customer portal is a critical element for all subscription businesses, but particularly for meal kits. After all, meals typically vary with each order, and customers may need to make selections each week based on the time they have for preparing meals, the proteins offered in each recipe, and the flavors of each dish.
Therefore, it’s crucial to make sure that your tech stack supports flexibility in your customer portal. You’ll not only want to be able to choose the various actions your customers can take within the portal, such as updating their address or swapping a product. You’ll also want to be sure that you can tailor the look and feel of the portal to match the rest of your brand.
Solution: Transactional SMS tools
Another key area for subscription management, transactional SMS allows your customers to update their orders without even having to log on to their account. Instead, right from their mobile device, they can make changes to their subscription like swapping an item, skipping an order, or adding a one-time purchase.
By having the proper tools in place, you can ensure your customers have the freedom to make changes to their orders wherever they are. This saves both them and your Support team time and effort, and can go a long way in increasing customer satisfaction.
3. Allow complete customization
When it comes to food, many shoppers are extremely particular. For meal kits, this makes it especially important to focus on customization. Your customers don’t want to feel locked into meals they aren’t excited about or can’t change—and if they do, they may churn from your business.
Solution: An effective subscription management platform
You should be equipped to empower your customers to make whatever changes to their orders they want. This doesn’t just mean selecting specific recipes within an order. It also means offering multiple options for delivery frequencies, box sizes, and other variables so they can choose what works best for them.
Choosing the right subscription management platform for your products and services can enable you to offer this type of robust flexibility. It can even allow you to go beyond subscriptions and let customers add one-time products and other offerings to their orders.
4. Gain deep insights on your performance to grow & scale effectively
To grow and scale to your full potential, it’s key to gather deep insights about your performance. Knowing how your service is performing both currently and over time can help you identify trends in customer behavior and pivot your strategy as needed.
Being able to track your performance is especially important for meal kit companies, who are often highly operationally complex. Meal kits often contain multiple ingredients in a recipe, and multiple recipes in an order, all packaged together in a single box. Because of this, these companies have a particularly high need to understand how different products tend to perform.
Solution: Analytics tools
Gaining a baseline for your business requires having the proper analytics tools. You might require dashboards to track your revenue, various customer actions, customer lifecycle patterns, and the interactions subscribers take with their orders. Depending on your business, you may even need a provider that allows you to customize dashboards with various filters and alerts.
By tracking the analytics that matter most to your business over time, you can more effectively hone your marketing strategies, approach to product development, forecasting, and more. All of this can help you serve your subscribers more effectively and increase your bottom line.
Setting meal kits up for future success
While the market for meal kits remains extremely competitive, there’s enormous value to be found for both merchants and consumers. And with the right tools and solutions in place, meal kit services enable themselves to meet their customers’ expectations and capture a highly valuable segment.
