In the meal kit segment, regional and ethnic flavor trends have yet to be fully explored, because traditional flavors such as beef stroganoff or garlic chicken remain the norm.


Although the meal kits segment has experienced declines in the past few years, the reasons are nothing that manufacturers cannot overcome. The smallest market drop for meal kits in the past five years was seen in 2007. While whole grains were adopted by the pizza dough and kit segment, meal kits instead stayed focused on flavor trends and sidestepped the health trends that have grown rapidly following low-carb’s demise. In addition to losing to other convenient meal options, another factor contributing to the declining meal kits numbers could be the missed opportunities from diet trends.

Pizza crust and dough have been gaining market share since 2005, though from a very small base. Meanwhile, both pizza sauce and pizza crust/dough have benefited from the appetizer phenomenon among consumers, which started in 2003. Pizza dough and crusts are serving as a basis for both appetizers and inventive main dishes, while pizza sauce gains from having an aura of “freshness.”

The declines experienced by meal kits are due, in part, to significant convenience trends within the category. The refrigerated segment is ahead of the shelf-stable area in terms of development; however, even this segment tends to launch conservative flavors, positioning and packaging. Alternatively, the segment’s competition comes from meal assembly establishments, curbside pick-up at fast-casual restaurants and expanded deli services/in-store dining in supermarkets. The categories outpacing meal kits are active in the fast-growing arena of organic, whole grain, fresh, artisanal, healthy, allergen-free and specific ingredient trends. Meal kits largely ignore most of these, despite the fact that several of them seem to be a natural fit. However, the green, fresh and local trends that have been infiltrating consumers’ shopping baskets (particularly since 2006) have emerged as a competing trend, as meal kits appear to be more processed compared to freshly prepared options.

Other factors contributing to the declining meal kit numbers include diet trends and missed opportunities. Dieting itself is not the issue; it is the form the new diet products have taken that has bypassed meal kit players. The diet industry is launching products in the frozen category as complete meals, not as meal kits. Alternatively, they introduce shelf-stable bars which require no prep at all. Meal kits that have been successful with dieters include the South Beach line by Kraft (in the refrigerator section, not the shelf-stable variety).

Market Trends

New product launches can be an indicator of market activity. Consumers’ moves toward fresh vs. processed foods could help explain the increase in chilled products in 2007. Chilled items primarily are comprised of pizza and sandwich kits. Shelf-stable has always been the largest category and is convenient for stocking cupboards at home. Chilled lines translate best to the on-the-go activities of children and adults who take their lunch to work. In terms of the number of claims made by each new product, meal kits average only a little more than two claims per product. This demonstrates how meal kits are too one-dimensional. Mintel believes claim numbers should increase so that meal kits have a chance of gaining the power that substantiated claims have in marketing to consumers. Products need to be recreated to gain consumers’ attention, using more organic, gluten-free, all-natural and free of additives claims.

Time Poverty

Despite the convenience of restaurant eating, the majority of meals are still eaten at home. According to Mintel’s “Attitudes to Food: Weight and Diet--U.S., March 2007,” time pressures remain a major factor in consumer meal choices. This survey revealed the draw to convenient meal options: The share of respondents who agree they are too busy to take care of themselves is highest for respondents aged 25-54. This is likely due to the family and work commitments that are at their peak during these adult years. Meal kits serve a convenient solution for those who are juggling family and work.

The age data for preparing food at home is striking. All age groups report they enjoy preparing food at home very near the average of 86%. However, adults aged 18-44 cook less than older adults because of time pressures, and they are far more likely to say they do not have the skills. The short-term missed opportunity appears to be with those aged 55 and older. This group has the time and skills to cook at home, yet hardly ever chooses meal kits. Once again, development with this group in mind is important, if the category is to grow.

Category players may want to focus a bit less completely on single moms and slightly toward the increasing number of single dads. Developing healthier, smaller servings is a prospect that could attract the Baby Boomer generation and seniors. Meal kit consumers prove to be above-average users of all convenience-oriented meal solutions, suggesting cross-marketing opportunities. However, the fact that meal kit users are less health-conscious than most consumers could very well be a reflection of the products currently available, rather than a caution against developing products with a strong health positioning.

People have many options when deciding what to have for dinner, but by far the most likely type of dinner is cooking from scratch. Mintel has extensively surveyed what “cooking from scratch” means to consumers, and preparing a meal from a meal kit counts as scratch cooking for most people. This is where meal kits can play a role in the evening meal--by marketing that they are the fastest, and possibly least expensive, route to preparing a home-cooked meal.

Long-term Trends

The decline in sales of meal kits could partly be due to significant convenience trends bypassing the meal kits segments. Meal kits are either not keeping pace with or are sidestepping the health and wellness trends enveloping the entire food industry, as are packaging trends and preparation methods. For instance, Kraft dominates the refrigerated segment with its Lunchables and South Beach lines. Consumers regard refrigerated foods as healthier and fresher than shelf-stable counterparts, due to their perceived shorter shelflife--though not necessarily their content. However, not all companies are taking advantage of this delivery system. Combine health positioning with fresh appeal, and a company could have a new positioning for a line.

In the meal kit segment, regional and ethnic flavor trends have yet to be fully explored. South American flavors, for instance, have taken hold in America, and these flavor profiles are easily found among deli and frozen meals, but not among new meal kit launches. The refrigerated segment is more in touch than shelf-stable offerings; however, even this segment tends toward conservative launches, betting on existing trends such as Hispanic flavors or past trends such as Caribbean. The most innovative companies are not the leaders: case in point, the soup kits from Simply Asian or Annie Chung’s Noodle bowls. These products are three-dimensional, taking advantage of perceived health benefits of their positioning (minimal processing), trendy packaging and flavor position banking on the burgeoning Asian flavor wave. Single grains and flatbreads are among the newest trends, yet it is the frozen food segment capitalizing upon them, not meal kits.

Long-term Health Trends

A meal kit may have a healthy profile, but the communication to consumers is not clear. Calling out health benefits of some or all of the components of a meal kit on the packaging is one way to reposition a product. A product line could switch to organic sourcing or investigate whether components of the meal kits warrant an FDA health claim, for example.

Meal kits wholly ignore breakfast, while the frozen meal segment capitalized upon the mealtime. If the gap is technological, then this is a barrier to be explored by companies. If the gap is simply overlooking this trend (fast-casual has capitalized upon the trend, with Jack in the Box and others launching new products), then it is prime territory for meal kit manufacturers. Breakfast meal kits could be as simple as a bagel and spread kit, which includes a knife, or a yogurt and fruit kit with granola. More complex microwave versions could offer hot breakfast sandwiches.

Forecast Factors

Actual sales for the meal kits category will depend on the following factors:
* New product development: Mintel’s upbeat forecast assumes that new products launched in 2007 and those in development will increase consumer penetration and cause sales to rise. Simply taking part in trends driving other convenience food categories, such as fresh, organic, allergen-free, indulgent and no additives/preservatives, would greatly benefit meal kits.
* Successfully targeting ethnic populations: A diversifying population will create new demands for meal kits. Manufacturers should find success with products developed specifically for blacks, Hispanics and Asians.
* Competition in the marketplace: Meal kits have experienced increasing competition in the marketplace, as consumers seek even more accessible convenience meal options.
* Diet trends: Meal kits have found only modest success with dieters. Mintel thinks Kraft’s new South Beach line in the refrigerator section has potential to better address the needs and wants of dieters. pf

This article contains information from the Mintel report “Meal Kits, U.S., October 2007.” Please visit http://reports.mintel.com for more information or call Mintel at 312-932-0400.