Nova Scotia Journal

Saturday, December 2, 2023

Meal kits became popular during COVID, but are they a fad or the new normal?

Meal kits became popular during COVID

Key Takeaways:

  • According to data, 50 percent more households ordered meal kits during the pandemic.
  • When COVID-19 struck, the popularity of ready-to-make meal kits skyrocketed as more Canadians were forced to rely on their cooking for sustenance.

When the pandemic began, Goodfood, a meal-kit, and grocery-delivery company based in Montreal, saw a surge in new customers.

“The pandemic was just this big push, this huge tailwind behind the business,” said Jonathan Ferrari, CEO, and co-founder of Goodfood, at the company’s micro-fulfillment center in Toronto, where the company boxes and ships orders for customers in the city’s downtown.

Household penetration of online grocery orders increased from about 11% in 2019 to 26% in 2020. In addition, online restaurant meal orders increased from 39% to 50% of households.

Meal kits; Image from CBC NEWS

“We’ve all gotten used to ordering food online, and I believe that’s a pandemic habit that will stick long after the pandemic has passed,” said Vince Sgabellone, food service industry analyst for the NPD Group.

However, as COVID-19 public health restrictions were lifted in the summer, Goodfood reported a 19,000 subscriber loss, falling from 317,000 in the third quarter of 2021 to 298,000 in the fourth quarter.

HelloFresh, a meal-kit company based in Germany that delivers in Canada and worldwide, has also lost thousands of subscribers recently, dropping from 7.7 million in the second quarter of this year to 6.94 million — though that’s still up nearly 40% from the same period in 2020.

HelloFresh also owns Chefs Plate, which only delivers in Canada but does not segment its subscribers by brand or country.

“Within the meal-kit business, we’ve always had a seasonality that is the inverse of the restaurant business… as customers tend to go out to patios and spend more time outside [in the summer],” Ferrari explained. However, he also stated that the company’s business has already begun to recover in the fall months.

Goodfood recently opened its first two micro-fulfillment centers in Toronto and Montreal, allowing customers to receive meal kits and groceries in as little as 30 minutes.

Source: CBC News

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