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A Summary of the Food Meal Kit Market

The meal kit industry is challenging. Since building this market in the late 2010s, Blue Apron has struggled to be profitable and was recently sold. The leader in the market today is Hello Fresh. Meal kit companies are now expanding their product lines with pre-prepared options, although there are questions about whether new competitors might do this better.

This 8:34 video gives a great overview of the product market. As you might have experienced, these companies use a lot of sales promotion to get people to try their product. Unfortunately, they are not as good at customer retention. The video offers a platform to discuss customer lifetime value and customer equity (Chapter 2) as well as sales promotion (Chapter 15) and product line management (C08) and distribution (Chapters 10, 11, and 12).

Using this video in your marketing class

An instructor might show this video in class or assign it to their students before class. As noted above, the product-market ties to a lot of concepts in Essentials of Marketing.

  1. Introduction to the Session: Start by showing the video as an introduction to the meal kit industry, setting the stage for subsequent discussions or lectures.
  2. Discussion Points: After the video, facilitate a group discussion. Ask students about their initial thoughts, what surprised them, and their personal experiences with meal kits.
  3. Customer Lifetime Value (CLV):
    • Lecture: Dive deeper into the concept of CLV, explaining its importance in subscription-based models like meal kits. How do companies acquire customers? How do they retain them? How do they cross-sell?
    • Activity: Provide students with fictional data and guide them through calculating CLV for a hypothetical meal kit company.
    • Discussion: Explore how meal kit companies can increase CLV, such as through product diversification, loyalty programs, or personalized offerings.
  4. Promotion Strategies:
    • Brainstorming Session: Ask students to brainstorm innovative promotional strategies for a new meal kit startup. Discuss various channels – influencers, social media ads, content marketing, and more.
    • Role-Playing: Simulate a marketing team meeting where students must pitch their promotional ideas to “company executives” (could be fellow students or the professor).
  5. Retention: What can firms in this market do to increase customer retention?

By integrating the video into various activities and discussions, the professor can offer a holistic view of the meal kit industry and its marketing intricacies, making the learning process both engaging and informative.

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