Present and Future of Meal Kits in India: Can This Be The Next Big Thing?

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The joy of cooking and proclaiming own sous-chef genius – “I made it myself” – is precious. And this is something the food industry is preparing to bet on as the world suits up to deal with the new normal.

COVID-19 and lockdown have hit food business owners the hardest. While the economy prepares to cautiously be back on track, the recovery phase for these businesses is expected to be a long process. Even when the restrictions are eased, restaurants and fine-dine hotels are unlikely to see a swarming crowd. It would take people some time to be confident about their health safety before eating outside. In fact, per a survey, 60 percent of Britons said they would be uncomfortable or very uncomfortable to have a sit-in meal in an establishment during the pandemic. Assumingly, the citizens of other countries, including India’s, toe the same line.

This puts the concept of DIY meal kit in a very favorable position. And it’s something the restaurant owners are steering towards owing to the evident opportunities that are on display in this niche.

Meal Kits And How Popular Are They?

Meal kits bring forth the efficiency of professional chefs through pre-portioned – or partially prepared – food ingredients and recipes. It mixes this with the personalized touch of cooking per your own preference. The result is a delicious, quickly-prepared, home-cooked meal without the hassle of grocery shopping and the preparation that goes before cooking. This is a big respite for those who are already bored with ready-to-eat take-outs or ordering foods from food services.

No wonder the global meal kit delivery service market was expected to be worth a whopping $8.94 billion by 2025. “Was expected” because the dated research is a year old and never imagined the circumstances a pandemic might bring that would put this model at the very center of the map in the F&B industry. In the coming months, this niche would expectedly see a big surge as restaurant business owners progressively adapt and find new ways. A report a few weeks back mentioned that even Swiggy was piloting DIY food kits in Bengaluru and Gurugram. Similarly, the cloud kitchen firm Rebel Foods, which is known for brands like Faasos, has forayed on this path, offering personalized meal kits. For such big players to jump in, it could mean an even bigger boom for the DIY meal kit market.

The (Practical) Challenges

But that said, just because things look brighter doesn’t mean there’s no challenge. For a country like India, the concept of meal kits remain novel. Those who can cook will cook. Those who can’t, they’ll place online orders from foodservice apps. And this reflects well in how the online grocery shopping and food ordering has surged in this pandemic.

In addition, for anyone to venture into the DIY meal kit model, they will have to deal with numerous logistic and infrastructural trials. Especially those offering several options in dishes, keeping track of a kit end-to-end can pose a challenge. The shelve life of the kit is another one of the challenges that should be addressed; perishable goods can go bad pretty quickly. The kits that go waste can add to the cost, further burgeoning restaurants and other food businesses that are already under a lot of pressure.

Matching customers’ expectations is another monumental task at hand. People would opt for DIY meal kit for the convenience it provides, along with the experience of eating home-cooked foods. Delivering them both might sound theoretically appealing, but not so easy. Besides, consumers’ needs and preferences are ever-evolving. And when you’re targeting a wider segment, catering them all with your meal kits won’t be very simple.

Putting the Pieces Together to Move Forward

So, while the DIY meals model is a clear go-to for restaurant owners who once relied extensively on dine-in setup, they must stay prepped to effectively tackle the challenges. The need of the now is to not go back to business “as usual” but instead discover newer opportunities and adopt newer models that are aligned to what we face today – and what we could possibly face tomorrow.

Plenty could be learned from the local players like Indian Meal Kit, Out of the Box, and GetFresh, who, as early market players, continue to grow and thrive. They offer unique menus, have plenty of options, ensure quick cooking experience for the customers, and have various key elements that have people keep coming back.

In the end, a large part of starting and growing a business that’s centric to the DIY meal kit model is strategy. Alongside the adequate infrastructure, human capital, marketing, and, most importantly, the quality of the product, it comes to what kind of strategy the business owner is working along with. Undoubtedly, a business that offers personalized recipes, kits with fresh ingredients, and various dishes that are custom to days and occasions – and offer them in a seamless manner – they are inevitably positioned to ride this emerging wave of meal kits and win big in the long-run.

The Fall (And Falling) of Businesses in Food Industry

Due to coronavirus, Zomato laid off 520 people a few weeks back. Swiggy followed suit by laying off 1,100 employees.

“The number of restaurants is expected to shrink by 40-50 percent over the next 6-12 months. The layoffs by Zomato are just the tip of the iceberg as the worst is yet to be experienced for the food delivery companies. With the continued impact on revenues and bottom line, the food delivery companies have already started looking at the alternate business model of grocery and liquor distribution,” said Rajiv Ranjan, the Founder of Paisa Dukan, as quoted by The Week.

In 2018-19, India’s foodservice industry, sizing at INR 4 lakh crore, employed 7.3 million people. Market pundits believe a significant portion of this workforce may have lost their job due to this pandemic.

In short, the situation is murkier. And this is just as true for the collective F&B industry around the world. What’s worse is there remains to see a positive forecast in the traditional ecosystem. For business owners in this industry to weather this storm, innovation and adaption are the two key fixings that should be deployed in the fundamental part of their operations. They must figure out newer ways.

Fighting the Challenges Ahead

Large restaurant chains, QSRs, and other food establishments should invest in newer kitchen automation and food tech equipment to bring more efficacy in the kitchen and quality in output. The small and local restaurants should expand the menu and elevate the quality of the food. In the end, they all should preferably follow the writings on the wall. Which is? One, DIY meal kits is a good and fast-emerging niche to venture soon. Two, safety and hygiene should be maintained in priority – and this should well be communicated to the customers. Three, customers want not just delicious foods now but also an excellent experience. Four, invest more in topical marketing with attention to hyper-personalized campaigns.

As the world continues its battle with COVID-19 (and recession), businesses in the food industry are expected to stay in the foggier water in the months ahead. But on the brighter side, there exist several opportunities for them too. Prompt planning and execution can serve their purpose of not just keep their establishment afloat but even growing it in these difficult times. DIY meal kit is among those opportunities that seem to look brighter by the passing weeks.