What meal kits are subscription service in which the customer gets food delivered to their door. No just take-aways or grocery shopping, but specific ingredients for recipes. Down to the amount of cloves of garlic or teaspoons of rosemary you need for your soup, the delivery contains nothing more and nothing less. Portioned up and ready to cook, all the customers have to do is pick their meals on the menu, wait a few days for delivery and then get cooking.

The meal kit industry has taken off in the past few years. Statista claims that meal kits generated worldwide revenues of $1 billion in 2015, but is set to hit $10 billion by 2020. Other reports suggest similar findings of the market revenue being around $5 billion in 2017. Most of this success is down to the market in the USA, although the UK is also not far behind.

With Amazon slowly incorporating meal kits into its ecosystem, the market doesn’t appear to be slowing down, and neither does the benefits and value that the service provides.

The reason why America took to meal kits:

● Saves time. Whilst you still have to cook the meals, browsing recipes online, finding out the portion sizes of each ingredient and going to the local store to find the product is very time-consuming. Delivery to the door is something that is becoming incorporated in most industries, and whilst grocery shopping delivery has been around for well over a decade, this is taking it to the next level.

● Healthy and organized. Having a menu of sorts, all of which includes fresh food and usually an appropriate amount of vegetables, meal kits lead us to naturally eat healthier. Having the fridge full of this week’s meals is a great way to avoid the need for last minute takeaways. The organization alone can reduce our stress, but it is a kryptonite to expensive impulse buys in shops too, where we resort to overpaying for unhealthy ready-made meals.

● Zero waste. The amount of food Americans throw away in waste is frightening. Meal kits are better for the environment in that you are given exact measurements of food and have zero waste (although we must factor in the carbon footprint of delivery). This also saves money, as you none of your products will go out of date because you couldn’t eat them in time.

● For those with no imagination. For many of us, deciding on a meal or finding a recipe is genuinely tiring. For inexperienced cooks particularly like students, trying to find a recipe that consists of food that you already own, or finding a recipe that isn’t too difficult where you don’t have to buy 10+ items for in your next food shop is a pain. Meal kits have a recipe book with the dietary and nutritional information already there.

● Experimenting. Experimenting with different meals is a clear benefit, but even more so, you can keep the recipe cards of your favourite meals you tried even after you have ended the subscription.

The Canadian challenge

Canadians are closely following this trend, with meal kits becoming increasingly popular in many areas. Whilst much of this might be student driven, it is clear that the benefits extend to families who live far from a grocery store or simply do not have much time. There are many companies operating in Canada, including the big three: Goodfood, HelloFresh and Chef’s Plate.

Meal kits are definitely a market that has much more potential growth all over the world, not just Canada. In fact, it is still a relatively young, untapped market that could be a good business opportunity. It is still relatively uncompetitive, and because it is young, formulas have not been perfected yet, thus there are no established monopolies.

The large space and uncompromising conditions pose some challenges to the delivery of meal kits in Canada. Delivery is difficult because perishable goods need to be delivered within a given time frame, as well as Canada Post experiencing many issues.

This is a big threat to companies, restricting their ability to expand across the whole country. Perhaps if Amazon really ramp up their efforts to conquer the market, then this would possibly be too much for other companies to compete with. Given Amazon's infrastructure and ecosystem in place, they would have the best chance proving a far-reaching service.

The big three companies may have to think about backwards integration too, if they are serious about conquering the Canadian market. This would give them a better chance, if they own their own logistics and delivery infrastructure.

How will companies like Hello Fresh manage to expand globally?

Firstly, different diets will of course need to be considered. Most countries do not eat remotely the same food as Americans or Canadians. Not only would the recipes need to be altered, but the ingredients themselves would need to be locally sourced to ensure they are the same as what the culture is used to (as well as being more fresh than imports).

Many countries have smaller portions, particularly in Asia. Having American portion sizes could lead to more waste - the exact opposite of the meal kit purpose and selling point.

Lastly, the organizational structure would need to be extremely decentralized in order to facilitate going global. For the above reasons, as well as having more specialist knowledge on local delivery companies, the departments that operate in given countries would need to have a large amount of autonomy.

Trying to run operations from America would lead to not just leadership difficulties, but a true misunderstanding of different cultures and their food habits. After all, food habits around the world are the most significantly different aspect of culture, and perhaps the most important to many.