Looking for fresh meals delivered to your home? No problem. Innovative entrepreneurs are responding, as the Wall Street Journal reports. As is the case when the free market is unleashed, you and I are the winners as we enjoy a new service and more people are hired. This story is a really fun read, giving us all a peek at what it takes to start and operate a business that’s breaking new ground.
By staying focused and keeping a close eye on details and customer experience, the meal-kit companies and their investors are hoping to avoid the fate of dot.com era food industry failures such as Webvan and Kozmo.com and more recent fizzles, like gourmet food delivery startup Pop-Up Pantry.
Survival depends on more than just avoiding spoiled tofu. The businesses must also manage their growth ahead and fend off competition from online grocers such as Fresh Direct and AmazonFresh, both of which offer meal kits.
The businesses are positioning themselves to capitalize on Americans’ willingness to order even fresh food online. Each meal kit includes a dinner recipe and all the premeasured ingredients needed, from chicken to thyme to miniature red and yellow peppers. Customers prepare the dinners, typically at a price of $10 to $12 a person a meal. Delivery is handled mainly by a third party, a move that reduces capital investment, but puts a key part of the customer’s experience in outside hands.
And, here’s a really interesting tidbit.
Some key aspects of the businesses don’t easily lend themselves to technology: Blue Apron’s data team labored fruitlessly to create an algorithm that would predict a recipe’s popularity based on the underlying ingredients, but found they couldn’t quantify the magic of how those ingredients come together.
Now let’s hope government bureaucrats stay out of it and let these creative risk-takers thrive.
