Rabobank assesses food delivery, meal kit services

MEAL KITS: Meal kit brands such as Plated, Chef’d, HelloFresh, Blue Apron, Sun Basket and One Potato appeal to shoppers that don’t have the time or energy for meal planning and shopping but still want to cook a meal with pre-portioned, prepped ingredients.

RESTAURANT DELIVERY APPS: Brands such as GrubHub, DoorDash and UberEats recruit armies of personal shoppers to pick/collect your food order (made via an app) from restaurants or other locations and deliver them to your door.

ONLINE GROCERY: There are different models, some involving picking from dedicated fulfilment centers/warehouses, and others from stores. All recipes oatmeal cookies Meanwhile, orders can be delivered to your door or you can pick them up yourself from local stores or collection points (eg. Oatmeal chocolate chip cookies chewy Walmart, Kroger).

Moist oatmeal cookies Some, like InstaCart, recuit personal shoppers to pick and deliver your order in their own vehicles, while AmazonFresh and FreshDirect do their own fulfilment. Chocolate chip oatmeal cookies martha stewart Stiff competition and a tightening funding environment

The first casualties are also beginning to appear, they point out. Quick oatmeal raisin cookies “ SpoonRocket , which launched in 2013, providing on-demand ready meals for less than $10, closed in March 2016, citing ‘stiff competition and a tightening funding environment’ as preventing them from covering the full cost of operations. Oatmeal chocolate chip cookies vegan In New York, UberEats cancelled its instant food delivery option after just one month, presumably because the economics weren’t working out.”

Amazon is planning to launch its first Taste Makers meal kit in the fall in partnership with Tyson Foods, while Campbell Soup and ConAgra Foods have been developing meal kit services with PeaPod

As for meal kits, a market forecast to reach $1bn to $1.5bn in 2016, companies have to expand and retain their customer base in order to reach a scale that will allow them to become profitable, they add.

However, as consumers are being bombarded with first time offers/discounts from all of the new players in the sector, churn rates are high, and if your business model relies on charging artificially low prices in order to attract and retain customers, it could be harder to achieve profitability in the long run, they observe.

As many of these firms are also so new, and privately held, it is not clear what retention rates are like, they add. Healthy oatmeal raisin cookies Are consumers trying them for a few weeks or months and losing interest or are they building them into their lifestyles now?

“They’re certainly attracting a lot of attention, and convenience is a big play today for sure, but the challenge with many of these models is that they have yet to sustain a relative degree of profitability, and customer acquisition costs can be significant and in some cases can increase over time. Oatmeal cookies simple There is also a high degree of churn.

“The challenge is that many of them haven’t been in operation long enough to really ascertain the lifetime value of a customer, so it may take time more time and additional capital to really determine how long you can keep a customer, and at what point do they actually pay back.

“We’re certainly open to looking at these kinds of business [as investment opportunities] but we’d need to really understand the path to profitability and the economics of the customer lifecycle.” Pierre LeComte, managing director, TSG Consumer Partners

Nick Fereday will be speaking at Food Vision USA in Chicago (November 9-11), which will also feature a panel of experts (L-R: Honest Tea co-founder Seth Goldman, General Mills 301 INC boss John Haugen, CircleUp head of funds Jason Starr and KRAVE and Sonoma Brands founder Jon Sebastiani).

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