Exporting Pre-prepped Meal kits to Australia
Where’s the opportunity?
Pre-prepped meal kits, an industry worth $1.5 billion, entails ready-made meals that require only heating for consumption. The concept while not new, has been gaining increasingly popularity in Australia over the last 5 years, particularly among time poor consumers. The industry is projected to experience a steady annual growth rate of around 1.7 percent. The industry has benefited from a rising workforce and desire for convenient lifestyles. There are moderate levels of market share concentration and currently the four largest operators account for around 60 percent of market share. We see some solid opportunities within the industry particularly for businesses that target niche markets, particularly health-conscious consumers, adventurous foodies and those that cater for a wider variety of dietary needs.
Think about how you can cater for specific demographics of people. Fast growing brand, my muscle chef, caters specifically for fitness conscious and gym junkies. They offer high protein meals that fuel training and other options to assist with healthy weight loss. Other unique approaches include brands like Providoor that are challenging the preconceived ideas of pre-prepped meals being fast and cheap, by offering gourmet restaurant quality food. They partner with local restaurants and delivery quality meals that require only quick preparation. Rising health consciousness in Australia means that gluten-free, vegan, and non-diary recipes are projected to become more popular. It’s good to have diverse options that customers can choose from on rotation every week. Subscription models are rising in popularity and new entrants may consider this over traditional supermarket retailing.
My muscle chef offers meals starting from $9.99 per serving while one of its largest competitors YouFoodz offers meals from $9.95. Note that firms that compete directly with these brands have limited price negotiation, particularly as competition in is highly saturated. More gourmet brands such as Deli door offer prices starting from $35. Providoor offers restaurant gourmet meal sets starting from $39.50 per person.
Promo and referral codes are extremely popular and effective way of attracting new customers. For example, my muscle chef offers $20 off one’s first order. Many brands also offer referral discounts, which is a good way to leverage word-of-mouth marketing. Think about creative ways to engage audiences on social media. For example, you may like to promote cooking challenges and use hashtags to gain widespread traction.
Stringent inventory control systems must be in place, particularly as inventory are highly perishable. Recent extreme weather situations have resulted in supply chain shortages, and this reiterates the importance of having key contacts with local suppliers across Australia. Brands may consider having a completing online presence or selling in supermarket chains such as Coles and Woolworths.
Our Strategic Takeaways
Pre-prepped meal kit services are a promising industry to enter. Despite being a saturated industry, there are many opportunities for new market entrants to target niche demographics rather than competing with existing dominating brands.