Not that long ago, “eating in” could only mean one of two things: buying groceries and cooking from scratch or ordering delivery or take out from a restaurant. Today “foodservice at home” (the topic of Datassential’s latest Keynote Report) means much more, encompassing third-party delivery services like Grubhub and EAT24, along with on-demand facilitators (UberEats, DoorDash) and subscription meal services (Blue Apron, Plated, HelloFresh) that bring fresh ingredients straight to customers’ kitchens, bridging the gap between scratch cooking and delivery. Media coverage of many of these services has skyrocketed recently as a number of traditional grocers and manufacturers have invested in similar concepts (Unilever is part of a $9 million investment in organic meal delivery company Sun Basket, while Kroger and Publix have both entered the meal kit market). Amidst all the buzz, Datassential has the scoop on what consumers and operators really think of delivery and meal services – here’s a sneak peek into our latest Topical Keynote Report: Foodservice @Home.
Delivery/pick-up ordering is on the rise
According to the report, the majority of consumers (60%) have ordered pick-up or delivery, or have subscribed to a meal delivery service. Consumers have reported an increase in all uses of delivery or pick-up services over the past year, with about 70% of consumers ordering pick-up or delivery directly from operators (versus third-party services like Grubhub). Though younger generations, namely millennials, are the least likely to use the phone to call in orders from restaurants, nearly 80% of consumers place orders via phone (over other methods, such as websites or mobile apps). While phone orders are declining as other technologies continue to rise, it’s still important for restaurants to communicate effectively over the phone – difficulty understanding the person taking the order is the main frustration for nearly half of consumers who order via phone.
Subscription media services are all over the media, but…
According to the Washington Post, the now well-known concept of meal kit services (those that deliver fresh ingredients, instructions, and all the fixings for making a home-cooked meal) didn’t even exist before 2012. It then “took off” with more than 100 meal kit companies in the U.S. now competing fiercely for a slice of the growing market that many industry sources value at around $1.5 billion. However, as a variety of businesses invest in delivery services (from HelloFresh expanding into wine delivery services to football player Tom Brady partnering with vegan meal kit start-up Purple Carrot, to Amazon ramping up its Amazon Fresh program), it may come as a surprise that, according to Datassential’s report, less than a quarter of the population has used a subscription service.
Of the 60% of consumers who have ordered food delivery, about 30% have subscribed to a meal kit service (or 18% of the total U.S. population). While about two-thirds of current customers of meal kit services say they love them and don’t plan to cancel, there’s quite a bit of fluctuation when it comes to retention rates – over 60% of consumers who started a subscription cancelled within the first year. As meal subscription companies continue to look for ways to retain membership, they might look to insights uncovered in our Keynote Report. For example, consumers can be attracted to meal kit subscriptions for several reasons, but top drivers are the ability to experiment and learn from new recipes (33% of consumers subscribe so they don’t have to purchase a long list of ingredients just for one recipe). For traditional grocery stores, leveraging opportunities like in-store demos and samples of unique ingredients can help drive business without having to introduce a formal meal kit program, which some have grocers have done.
Innovations and opportunities
Innovations and technologies designed to create better dining experiences at home are growing alongside at-home foodservice. While consumers are generally hesitant regarding more futuristic innovations, such as voice-recognition software for phone-placed orders, there are plenty of opportunities elsewhere. Some innovations consumers are most interested in include ways to deliver a fresher hot meal – at the top of the list are vehicles equipped with ovens to keep food warm (great news for Domino’s, whose DXP “ultimate pizza delivery vehicle” does just that). For many consumers, though, gadgets like food-preparing robots and drones used for delivery rank as the least-liked delivery methods.
Renee Lee is a senior publications specialist at Datassential, a supplier of trends, analysis and concept testing for the food industry. For more information and to purchase the Foodservice at Home Keynote Report, contact Datassential managing director Brian Darr at [email protected].
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