British Columbia

Meal kit makers jostle for a slice of Canada's market in growing, competitive industry

In Canada, the industry has roughly tripled in five years and is expected to exceed $400 million in 2020, according to a report by The NDP Group. But it's an incredibly competitive and saturated market. There are over 150 companies globally, forcing Canadian-start ups to find a way to stand out.

Some offer less packaging in response to consumer complaints

Fresh Prep co-CEO Becky Brauer believes success in the competitive meal kit industry comes down to offering fresh ingredients and less packaging. (Tina Lovgreen/CBC)

It's the dreaded question: "What do you want for dinner?" And a growing number of meal preparation businesses promise to lessen that dread by doing the planning, shopping and even portioning out of meals ahead of time. 

In Canada, the industry has roughly tripled in five years and is expected to exceed $400 million in 2020, according to a report by The NPD Group, a market research firm. But it's an incredibly competitive and saturated market. There are over 150 companies globally, forcing Canadian start-ups to find a way to stand out.

"It comes down to how fast you can innovate in the industry," said Becky Brauer co-CEO of Fresh Prep, a Vancouver-based company that launched five years ago and now has tens of thousands of subscribers.

Brauer said they focus on providing local ingredients as much as possible to get a competitive edge and drop off the food in re-usable coolers instead of cardboard boxes in an effort to reduce waste. Over-packaging is one of the reasons consumers say they don't use meal kit services, price is another. 

The concept of meal kits is simple. Customers go online and pick the meals they'd like and how many. They then receive a box filled with the recipe sheet and all the ingredients necessary for the meal — each item individually packed and portioned, including spices and sauces. 

Becky Brauer, the co-CEO of Fresh Prep, says they're tackling the problem of over-packaging. 1:31

The average meal starts at $10 per serving and takes about 30 minutes to prepare. A report prepared by Mintel Group found Canadians view meal kits as expensive and that's the main reason consumers they don't subscribe. 

"Just over half (54 per cent) cite them as being "too expensive," says the report. 

But loyal customers like Alana Lewis, who runs her own yoga studio and has two kids, says it saves her time and is more cost efficient because she doesn't end up throwing out any food.

"I'm not buying a bunch of food and wasting it. I just have exactly what I need. I don't have a huge bag of cilantro and half of it goes stale by the end of the week," she explained.

She orders three to five meals a week. 

"I love efficiency. So I can make the meal and because I'm not doing all the prep, the kitchen is less messy and I can almost have the kitchen clean by the time the meal is done which for me was like bonus points because I can just relax with the family after dinner," she said. 

Concerns over packaging

Another concern about meal kits is the packaging with each item individually wrapped in plastic. While it may look wasteful, a study out of the University of Michigan found home-delivered meal kits were actually better for the environment than buying food from a grocery store because they created less food waste and emissions from transportation. 

Fresh Prep is trying to set itself apart not only by using re-usable cooler bags, but by offering to take back plastic packaging. 

"About two years ago now, we started a recycling program where we actually take back the soft plastics for our customers that can't be recycled at curbside," said Bauer.

In 2018, she said they recycled 40,000 kilos of plastic after about 25 per cent of customers returned the packaging.

They're now aiming to create a reusable container that would eliminate all packaging. 

Competitive industry

While meal kit providers continue to increase the number of subscribers in what is a cut-throat industry, they're also going up against grocery stores, which are now also offering to deliver groceries straight to your door, as well as restaurants that use food delivery apps like Skip The Dishes, UberEats and Foodora. 

HelloFresh Canada is a branch of an established food prep company based in Berlin and Corby-Sue Neumann is its Toronto-based culinary lead. She says the industry offers more than just groceries.  

"We're empowering people to learn how to feed themselves, not only removing the roadblock of going into the grocery store — what do I buy? — we've done the planning and literally holding your hand through the use of the recipe card," she said. 

A customer squeezes lime juice on cajun fish tacos prepared from a Hello Fresh meal kit at her home in Vancouver. (Darryl Dyck/The Canadian Press)

The company used to send their kits from Edmonton to Vancouver, but because of recent growth has opened up a distribution centre in Abbotsford. 

"I think that speaks to the strength of meal kit adopters in Vancouver," said Neumann. 

Shop Talk is a CBC British Columbia series which looks at the changing business of shopping for food. 

If you have a story about how you purchase food, please email tina.lovgreen@cbc.ca.

 

About the Author

Tina Lovgreen

Video Journalist

Tina is a Video Journalist with CBC Vancouver. Send her an email at tina.lovgreen@cbc.ca

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