This year’s PROCESS EXPO will feature an extensive education program aimed at keeping processors and suppliers up-to-date with the latest research, innovations, and ideas in the food industry. To get the conversation started early, we asked some of the speakers for a sneak peek at their presentations.
Topic: Tremendous Growth in Meal Kit Delivery
Speaker: Judith Winfrey, PeachDish
Date and Time: Wednesday, Sept. 20th, 3:15-4:15
Meal kits — just a few years ago, no one had heard of them. That’s because prior to 2012 they didn’t exist.
But a lot can change in 5 years. Today, the meal kit industry is booming. A recent Harris poll found that 25% of adults have purchased a meal kit and 70% of those who’ve tried them keep buying them. Despite the highly publicized problems at Blue Apron, the first meal kit provider to IPO, the market is expected to grow, hitting $10 billion by 2020.
Meal kits have carved out a brand new niche in the food industry. They’re not grocery stores or restaurants, but in many ways they resemble a little bit of both.
To learn more about meal kits, as well as the challenges providers face and how processors and suppliers can help, we spoke with Judith Winfrey, the president of PeachDish, a boutique Atlanta-based meal kit service that ships more than 200,000 meals a year. Their mission is “working with great Southern chefs and great Southern suppliers to share great Southern food with the rest of the country.”
Winfrey initially resisted the idea of meal kits. She had spent more than a decade working in the Good Food Movement, and she and her husband run a certified organic vegetable farm that supplies food directly to eaters through a Community Supported Agriculture (CSA) program.
She had spent five years as the chief operating officer of a farm-to-table restaurant group in Atlanta and was ready for a new challenge. In 2012, she found herself at a dinner party honoring Chef Alice Waters, seated next to Hadi Irvani, who was planning to start a meal kit company. “I told him, “You’re crazy. That’s a terrible idea. Food in the mail is not going to work,’” Winfrey said.
But then she thought about it some more and realized that “food may be the last e-commerce frontier, but it’s coming.” A year later, she ran into Irvani again, this time with a different perspective. She joined PeachDish as an owner, and for the last three years, she’s been “working on really understanding and developing operations and processes to make meal kits possible for as many people as possible.”
Operational challenges facing meal kit providers
As mentioned above, meal kit services fall somewhere between grocery stores and restaurants. “We’re like a small farm-to-table restaurant that changes its menu weekly,” Winfrey explains.
Here’s how it works:
“We start with an inspiration, and then we come up with a recipe. At PeachDish, we operate under very tight parameters. Our goal is to create a meal for two that can be cooked in 30 minutes, is accessible to someone with no cooking experience but interesting enough for someone who knows food to enjoy preparing and eating, and requires only minimal cooking equipment.” They assume the customer has nothing more than a range, an oven, a pan, a knife, and a cutting board, so all of the ingredients need to be manageable with just these tools.
The PeachDish model is more challenging than most. With other services, you typically sign up for a subscription and then kits are delivered on a weekly basis — you don’t buy specific meals.
With PeachDish, you do buy specific meals (current offerings include flank steak with mushroom-tomato gravy and andouille rice grits). The service operates on a very tight cut-off as customers have until Sunday night to order meals that they start shipping the next day. “This gives us supply chain challenges,” Winfrey says, “because we don’t know exactly what we need until less than 24 hours before we start manufacturing. We could be making four, or sometimes even eight or twelve, unique products every week.”
To make this model feasible, PeachDish works directly with local food producers — like farmers, ranchers, and condiment makers — to help them prepare in advance. For example, they collaborate with farmers at the beginning of the growing season to make sure they’ll have what they need later on.
Winfrey also tries to standardize recipes as much as possible so that they require constant increments of products that can be stored, like spices, condiments, and proteins.
How processors and suppliers can help
The operational challenges of running a meal kit service leave the door open for processors and suppliers to meet these unique needs.
In particular, Winfrey says, “anything we can get that’s already individually packaged is best for us.” She notes the improvements she’s seen in the condiment market just in the last three years. “Three years ago, we could only get one ketchup, a couple of mustards, and one mayonnaise in individual portions. Today, there’s much more variety. We can even get Sriracha in individual serving sizes.”
They’ve also managed to solve the challenge for proteins. “We receive proteins that are individually portioned, frozen, and vacuum sealed — they come into and leave our facility frozen.”
But for other items, like spices, they currently buy in bulk and use a vertical form-fill machine to pack some liquids and dry goods, which, Winfrey notes, adds more steps to production.
“Ideally everything would come individually portioned and ready to drop in a kit. It would be wonderful if we could dial up a supplier and order 10,000 portions of cumin in 1-tbsp increments. What we’re looking for is more modularity, more flexibility. For example, instead of a 1-lb bag of rice, we need a 1-cup bag of rice. Or instead of a 1-lb bag of sugar, we need a 2-tbsp bag of sugar.”
One area that Winfrey identifies as being particularly challenge is produce, which is tricky because it’s not standard. Unlike some of the other meal kit providers, PeachDish sends whole produce. “We don’t chop anything,” she says. “We don’t want to degrade the produce or use chemicals to extend its life.”
As a result, if they have a recipe that calls for, say, 4 or 8 oz of lettuce, they must hand pack it. “It would be wonderful to have a processor that we could give specs to, for example, ‘We need 6 oz of summer squash whole, prepackaged,’ so we could just drop it in a kit.”
She notes that produce presents an added challenge because it’s time sensitive, which means the facility needs to be close to the farms and there currently aren’t many options available for companies of PeachDish’s size. “There are solutions available for larger businesses,” she says, “but not as many for small ones. However, as we move into the digital world where people want to buy food and meal kits on demand, we’ll need solutions for businesses of all sizes.”
She suggests a solution, one based on the idea of the food hub — a food aggregator and distributor that helps local producers access markets like school systems, hospitals, and foodservice operations. Food hubs are popping up all over the country, like the Redd in Portland, OR.
Winfrey thinks something like this could work on the processing side as well. “What would be really hot is to have processing hubs in or near major markets. We have regional processors, but they can’t respond quickly enough to local needs. A processing hub would be a place where local producers could take their products to be aggregated and provided in increments. If I had somewhere I could send my artisanal pasta maker or pickle maker to get products in 3-oz increments, for example, that would be great for me and also great for them.”
The future of meal kits
There have been some corporate fumbles (e.g., the Blue Apron IPO), and there are plenty of operational details that still need to be worked out. But one thing is likely certain: meal kits aren’t just a flash in the pan.
“I feel certain that meal kits are here to stay,” Winfrey says. “People like them, they’re convenient, they’re an experience, and they take you away from your computer for a minute so you can be with your family and friends and do something that feels like an accomplishment.”
She acknowledges that the market is already getting crowded (even Amazon has meal kits now), but she believes that there’s room for providers to carve out their own niches, like PeachDish has done. “Grocery is going to grow as a sector of e-commerce, and food isn’t a winner-take-all market. It’s a personal expression — people want to be able to exercise their personality in their food choices.”
To learn more about meal kits and discover ways processors and packagers can help meet the needs of this growing market, be sure to check out Winfrey’s talk (you can add it to your custom show schedule using the PROCESS EXPO 2017 mobile app). And, if your personality includes enjoying high-quality, locally sourced Southern food, give PeachDish a try. You can also visit PeachDish in Booth 2712.