LEK: Creating a Winning Recipe for a Meal Kits Program

Check out a real LEK presentation on Creating a Winning Recipe for a Meal Kits Program.

LEK Presentation: Creating a Winning Recipe for a Meal Kits Program

Key Learnings from the Presentation

The L.E.K. Consulting presentation on “Creating a Winning Recipe for a Meal Kits Program,” presented at the National Grocers Association Show in 2019 by Rob Wilson, offers comprehensive insights into the evolving landscape of meal kits and the broader shift in consumer food purchasing habits. Below is a detailed summary that encapsulates the main insights and strategic considerations outlined in the presentation:

Overview and Industry Dynamics

• Evolving Consumer Preferences: Consumers are increasingly moving away from traditional center aisle grocery purchases towards options they perceive as fresher, including e-commerce grocery, meal kits, restaurant delivery, and prepared foods.
• Meal Kits Market: The meal kit delivery market, valued at approximately $3 billion, represents a significant portion of the food & beverage e-commerce market, with explosive growth driven by consumer demand for convenience, portion sizes, and innovative recipes.

Strategic Challenges and Opportunities

• High Customer Churn: Meal kit companies face challenges with profitability due to high customer acquisition costs, packaging, labor, delivery expenses, and particularly high customer churn rates. Price sensitivity remains a significant barrier to long-term customer retention.
• Retail and Online Grocery Shift: The presentation highlights the strategic shift towards omnichannel offerings, with significant partnerships and acquisitions noted between meal kit companies and grocery retailers. This shift indicates an industry-wide recognition of the need to address profitability and accessibility challenges inherent in the meal kit model.

Case Studies and Market Moves

• Retailer Strategies: Examples of successful integrations of meal kits into brick-and-mortar stores were showcased, such as Albertson’s acquisition of Plated and Ahold’s partnership with HelloFresh. These moves signify the grocery industry’s response to evolving consumer expectations for convenience and quality.
• Technological Innovations: Advances in technology, including the testing of self-driving vehicles for delivery, underscore the ongoing efforts to optimize the last mile of delivery, further blurring the lines between traditional grocery retail and food service.

Consumer Trends and Preferences

• The presentation draws from L.E.K.’s 2018 Consumer Food & Beverage Survey to underline key trends, including the growth of meal kits, the impact of Amazon/Whole Foods on consumer perceptions, and the rising importance of product claims for specialty foods.

Strategic Recommendations

• L.E.K. suggests that meal kit providers and retailers alike focus on flexibility, rapid adaptation to change, direct engagement with consumer trends, and the leveraging of partnerships to enhance the meal kit offering’s appeal and profitability.

About L.E.K. Consulting:

Specializing in strategy, mergers and acquisitions, and operations, L.E.K. Consulting offers deep expertise across a broad range of industries, including life sciences, healthcare, retail, and transportation. The firm is known for its rigorous analysis, strategic insights, and practical solutions that produce high-impact results. L.E.K.’s approach is to collaborate closely with clients, providing tailored advice that addresses complex business challenges and opportunities.

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