Given that Blue Apron hasn’t exactly hit it out of the IPO park, you be forgiven for thinking that the meal kit market has gotten a little overripe. However, it appears that companies in the space aren’t out of fresh ideas just yet with news that Marley Spoon, a startup that originally hails from Berlin but has since made its focus the U.S., is launching what it claims to be the “first affordable meal kit” offering.
Entirely separate from its premium brand ‘Martha & Marley Spoon’ (which is a partnership between household name Martha Stewart and Marley Spoon), the newly launched Dinnerly promises to work out at $5 per serving.
That’s roughly half the average headline price of other meal kits, including HelloFresh, Blue Apron, and Marley Spoon itself, but unlike the aforementioned, the price doesn’t include shipping. That said, Dinnerly is definitely still cheaper and undoubtedly targeted at a more mass market audience.
The new Dinnerly works like other recipe kits: the company sends you all the fresh ingredients based a number of set meals/portions, ready for you to get busy in the kitchen. Some of the cost has been reduced by moving recipe instructions online and printing the ingredient list on the box, rather than including glossy paper recipe cards, but otherwise Marley Spoon is talking up the quality of ingredients, citing the use of grass-fed ground beef and antibiotic-free chicken. I also understand that margins are similar for what is otherwise a lower basket price item.
“Dinnerly customers will receive a weekly menu of three picky-eater approved dishes designed to suit adults and kids alike, including classics like Spaghetti and Spicy Sausage Meatballs, Cheesy Chipotle Beef Tacos, Pan Roasted Chicken with Potatoes and Spinach, and Pepper Jack Turkey Burgers with Caramelized Onions and Sweet Potato Fries,” says the company.
In a call with Marley Spoon co-founder and CEO Fabian Siegel — who I’m told is relocating to the U.S. later this year — he said that until now meal kit services have really been “luxury meal kit services,” aimed at more affluent customers and with recipes that require more expensive ingredients. That has potentially held back adoption of what is supposed to be an alternative to your weekly fresh grocery shop.
To back this up, Fabian cites research by Nielson that was conducted in March 2017 and revealed that almost half (46 per cent) of U.S. consumers said they would be more likely to purchase a meal kit if it were less expensive.
Asked if he is expecting Dinnerly to outgrow Martha and Marley Spoon, Fabian said he didn’t know for sure but given that Dinnerly is targeting a much bigger market, it would be logical to believe so. He cautioned of course that Martha and Marley Spoon might still be more profitable, likening it to the iPhone’s smaller market share but high ticket price and corresponding profits compared to cheaper phones on the market.
Dinnerly will start with delivery on the U.S. West Coast, beginning with California, and will be followed by most of Washington, Oregon, Nevada, Utah and Idaho, with expansion to other regions expected by the end of 2017.