How To Start A Meal Prep Business

Companies now provide subscription services for meal kit delivery, which includes a small box containing partially cooked food, pre-prepped ingredients, and pre-portioned ingredients labeled with a recipe card. You can acquire raw materials, such as fruit and vegetable pieces, to cook a hot meal.

Ordering meal kits from a meal prep business online is the way to go if you want to save time in the kitchen and still eat healthy, delicious, and hot food. Young consumers who work away from home often choose meal kit delivery to enjoy the convenience and quality of home-cooked meals. Instead of going to the supermarket, they order meal kits online from a food prep service.

Market Stats for Meal Kit Delivery Business

Subscription-based meal kit services have experienced significant growth. In the United States, 17% of adults aged 25-44 use Meal kit delivery services. This opens a lucrative business opportunity for all those with an entrepreneurial mindset.

Here are numbers for those interested in the fresh-food meal kit delivery business.

• The Market Analysis Report predicts that the global meal kit delivery services market will grow at a CAGR (compound annual growth rate) of 17.4% between 2022 and 2030, expanding from its 2021 valuation of USD 15.21 billion.
• Meal kit delivery services generated 63.2% of their total revenue from online sales in 2021. The offline platform is forecasted to experience a CAGR of 17.8 percent growth in the meal kit delivery services market from 2022 to 2030.

People prefer home-cooked meals but need more time to shop for fresh ingredients. In this case, hiring a service that sends groceries and meal plans is more convenient for them.

Meal Prep Industry's Latest Trends

Check out some of the latest trends in the meal prep industry and why you should start this business too.

Organic Foods

More and more people are interested in eating purely organic foods because they have become more conscious about their health and the environment.

The companies that sell meal kits know this very well. Even though the rules for organic farming vary from country to country, there are a few things that all organic foods have in common such as GMO and healthier.

Protecting ecosystems, water supplies, and biodiversity is a part of it. Finding organic ingredients in grocery stores can take a lot of work. But this problem can be solved by services that deliver meal kits.

Catering to Lifestyle Choices

One new trend in the food industry is meal kits that are made to fit the needs of certain diets. For example, a vegan diet means you don't eat anything sourced from an animal.

So, even the simplest meals often require ingredients that are different from the norm. Meal kits make it easier to be vegan and give you a wide range of foods to choose from.

Competitive Pricing

Better logistics and automation cut down on operating costs, which makes meal kits more affordable for customers.

Meal kits used to be expensive, but companies like EveryPlate and Dinnerly have found ways to cut costs and make their options more affordable.

Because of the competition, more meal kit services will likely look into ways to lower prices to reach a wider audience.

Pre-Made Meal Choices

In this business, ease of use is a big selling point. In the past, meal kits only came with ingredients and a recipe. The customer had to do the rest.

Even though it was easy, it took a while to set up, cook, and clean up. Ready-to-eat meal kits have become more popular recently.

You don't have to cook or clean them up before eating them. You can be sure that the next generation of meal kits won't need you to cook or do any prep work.

Extended Delivery Services

Some customers are also interested in how easy it is to get a meal kit delivered to your home. Because of this, more and more meal-kit services are delivering meal kits for a long period during the day and night.

Some meal kits can be delivered at different times so you can prepare and eat them for breakfast, lunch, or dinner.

Meal Prep Delivery Business: Viable Business Models

Have you considered how meal kit delivery businesses will get paid? A meal-prep service is easy to start, so you might be fine deciding on a business model immediately. The types and quality of food they offer differ from the cloud kitchen model, but they are otherwise the same. You can move forward in whichever way makes the most sense to you. But to reach more people, you must develop good business plans. They can be:

• Subscription Based Business Model
• Health Goal-Oriented Business Model
• Pre-Cooked and Storable Meal Kit Business Model

Subscription Based Business Model

You might already know about Freshly and HelloFresh. These two companies deliver meal kits to your door with this business model. In the subscription-based business model, customers subscribe for services and the frequency of meal kit deliveries they want in a month. The meal prep business offers different subscription plans, and customers can also make custom plans based on their needs.

Health Goal-Oriented Business Model

Two successful companies that use this meal-kit delivery model are Magic Kitchen and Fresh n' Lean. In this business model, meal prep businesses deliver food made for people who have to stick to a strict diet for their health. Goal-oriented meals can be many, such as;

• Low carb meal
• Low sugar meals
• Diabetic food

Pre-Cooked and Storable Meal Kit Business Model

Extensively occupied people prefer a pre-cooked and storable meal kit business model. They are the ones who can't even cook one meal for themselves. They could be college students, adults who work, or anyone else.

We recommend starting with these three most successful meal-prep delivery business models. Then, if you need help coming up with good business ideas, you can talk to market researchers or business analysts who know the market.

How Does The Meal Prep Business Model Work?

Meal kit delivery services typically use subscription models. They deliver meal kits and recipe cards to the door regularly in exchange for a weekly, monthly, or annual subscription fee. The customer will decide whether or not to purchase the meal, its quantity, and size, but the shopkeeper will set the weekly menu.

For example, consider HelloFresh's business model.

HelloFresh charges a $7.49 shipping fee for meal kit delivery. You can purchase a year of five weekly recipes for two people for $89.90.

They entice potential buyers by providing discounts. The HelloFresh website offers a $22.01 discount to first-time visitors. After applying the discount, delivering five meals per week for two people will cost $67.89.

HelloFresh offers four types of weekly menus:

• Meal and Veggies
• Veggies
• Family and Friends
• Low Calories Menus

The company switches up the meals on the menu weekly to keep customers returning. They will send you new meals every week so the customer always has something new to look forward to.

The best part is that users can cancel your weekly subscription to skip a week of deliveries without any penalty.

Keeping this in mind, let's analyze some steps to launch your meal-kit delivery business.

Revenue Model: Money For Convenience

Meal kit delivery services charge customers for convenience and impart culinary know-how while generating income. We have already discussed the business model of meal kit delivery service.

The following gateways can supplement the cost of the meal kit:

Meal Cost: Business owners can set the price for individual meals or meal packages. The meal cost should cover the expenses of ingredients, preparation, packaging, and overhead costs, while also ensuring a profit margin.

Meal Commission: The business can earn a commission on each meal sold, acting as a middleman between the customers and the meal providers.

Multi Tier Subscriptions: Offering different subscription tiers can generate recurring revenue. For instance, customers can choose from various subscription levels (such as basic, premium, or deluxe) that provide different benefits, such as access to exclusive recipes or discounts on meal packages.

Featured Listings: Charging a fee for featuring certain meals or meal providers prominently on the website or app can generate additional revenue. This allows meal prep businesses to showcase popular or high-margin offerings, increasing their visibility and attracting more customers.

Paid Advertisements: Allowing other businesses, such as food suppliers or kitchen equipment manufacturers, to advertise on the meal prep platform can be a lucrative revenue stream. Advertisers pay to display their ads to the meal prep platform's user base, potentially generating significant income.

Affiliate Marketing: You promote the products of other companies in the food industry on your website through affiliate marketing.

Franchise Fee: The platform can charge chefs a franchise fee as its popularity increases for featuring their dishes on the menu.

Selling Cookware & Merchandise: Selling branded cooking utensils, tools, recipe books, and other merchandise is a mindful and profitable method.

Paid Deliveries: While some online meal prep businesses may offer free or included delivery, charging a fee for expedited or premium delivery options can generate additional revenue. Customers who require faster delivery or specific time slots can opt for paid delivery services, which contribute to the overall revenue.

Gift Cards: Selling gift cards allows customers to purchase meal prep services for themselves or as gifts for others. The revenue is generated upfront when customers buy the gift cards, and the meals are redeemed at a later date. This helps increase cash flow and attract new customers to the platform.

Benefits of Meal Kit Delivery Services

We've made a list of benefits to help you decide if a meal kit delivery service is right for you.

It Saves Time: Whether you are single, have a family, or are somewhere in between, it can take a lot of work to find the time to cook a home-cooked meal. But with meal kit delivery services, this is easy. All you have to do is place your order.

It Reduces Food Waste: If you use a meal kit delivery service, you won't have to throw away food you forgot in the fridge because it went bad. Each meal is already measured for you and your family, and you choose the menu. This way, you and your family can eat as much as you want without wasting food.

It Saves Money: Meal prep business offers low-cost meals that help you meet your budget.

Great Way to Try New Food: With the help of a meal kit delivery service, it's easy to try new foods. There are many kinds of food, like Argentinian steak, chimichurri potatoes, roasted vegetables, or Bibimbap.

It Ensures Better Nutrition: With the help of meal kit delivery services, you can add a wide range of vitamins and nutrients to your weekly menu.

Major Online Meal-Kit Service Providers

Hello Fresh: Hello Fresh delivers to the United States, Canada, Australia, the United Kingdom, and France. It is a European company.

Blue Apron: Blue Apron rapidly expanded across the United States as a meal-kit delivery service headquartered in New York City.

Plated: Plated, another New York City startup, gains popularity due to its flexible meal orders.

Forage: Forage operates a food delivery service in only two states: California and Nevada.

PeachDish: PeachDish focuses on serving customers in the South but offers nationwide delivery, taking its cues from the cuisines of the American South.

Hello Chef: Hello Chef, a meal-kit delivery service based in Dubai, is growing in the city.

Sun Basket: Sun Basket, a major player in the local market on the west coast of the United States, is headquartered in San Francisco.

How to Start a  Meal Prep Business

Developing a business model for your food prep services involves the following steps, but the general framework for creating a business model remains the same across industries.

Step 1: Get Legal Licenses

The first step in starting a meal kit delivery service is getting the necessary permits and paperwork from the government.

Below is a list of legal documents for U.S. citizens.

Business License: In the United States, you need a business license before starting and running a business. The fees for getting a business license vary from state to state. They can be a flat rate or a percentage of the business's annual income. Make sure to pay on time and renew your license every year.

Employer Identification Number (EIN): A tax ID number from the IRS (Internal Revenue Service) is called an Employer Identification Number (EIN). If you want to get an EIN, you should go to the IRS website. You can also send your application by mail, fax, or phone. But don't expect immediate results. The IRS only gives out one new EIN each day. It is helpful to have an EIN because it is free to use.

Food Service License: To get a license to serve food, you must go to the local health department. The health department will check the place where you plan to make meal kits to see if your company follows all the rules about food safety in restaurants.

Step 2: Analyze Competitors

With knowledge of the competition, you can make a business plan that can't fail. Analyzing competitors can help you make some informed decisions. For example, HelloFresh and Blue Apron are the biggest food kit services in the US.

Step 3: Build Your Brand

You need a USP if you want to do well in delivering meal kits. You need to answer what makes your meal kit different from the others.

We have compiled a list of ideas for standing out from the crowd.

Eco-friendly meals: To put this USP into action, you could sell vegetables grown on sustainable farms in your area, pack your meal kits in eco-friendly packaging made from recycled cardboard, and deliver them using only bicycles.

Recipes for any occasion: Meal kits are a great addition to your menu, especially if you plan to cater events like birthday parties or group camping trips.

Special diet meal kits: You can stand out from the competition by using cultural and food differences to your advantage. For example, you could add gluten-free options to your menu. Meal kits that are kosher, vegetarian, or halal could also help the local community.

Step 4. Gather Meal Kit Recipes And Find Suppliers

Once you clearly understand the main purpose of your meal kit business, it's time to collect recipes that align with your mission.

Remember that you'll need as many recipes as possible to change the menu weekly and keep your customers guessing.

You should also start thinking about where to get your ingredients. So, you must get your food and meat from farms and markets in your area.

Step 5. Develop A Meal Kit App Or A Website

To sell and deliver meal kits, you must have a mobile app or website that automatically bills customers for their subscriptions and sends their information.

Ask the chosen development team how much it will cost. If you choose to work with us on your project, this is how the software development process will go:

Pre-Sale

After you complete the form, one of our business development managers will contact you to discuss the project and send you an NDA. After that, a business analyst breaks down your needs into manageable pieces called modules and features. These are then sent to a developer to get an estimate of how much the project will cost.

If this price is okay, we can move on to the next stage, "Discovery."

Discovery Phase

Writing a technical specification for your project will take between one and three weeks. During the inspection stage, we suggest showing the app or website's structure, mockups, and even clickable prototypes of the project's main screens.

Project Initiation

Once you have a project specification in hand, we can give you more accurate estimates for project development. Once we agree on the budget and the most important parts of the project, we'll send you a contract to sign. The next step is to set up a short video call so that we can officially introduce you to our staff. Most teams comprise developers, project managers, quality assurance specialists, and designers.

Project Development

The next step in the project's development is for the team to divide the project's features into iterations and make a schedule. Most cycles last between one and two weeks.

Quality assurance (QA) experts check newly implemented features for bugs before telling project managers so that developers can fix them.

After that, the code is made public, along with the other parts of the project that have been finished.

We'll let you know how the project is progressing every two weeks. In these kinds of reports, we talk about the progress made and the features that are coming up.

Once all the features have been added, we'll give you a final demo and full control of the project.

Different Approaches To Building A Meal Prep Delivery App

Learning how to start a meal prep business can be a lot of work, but it can also be a very rewarding experience. Three ways exist to create an app for delivering pre-prepared meals. All three will require consulting with software engineers. Below, we rank methods in terms of money and time spent from least to most efficient.

Scratch Development

Software developers use agile or waterfall methodology to develop the meal prep delivery app according to the submitted Software Requirement Specification (SRS) document. Business owners can also hire software developers to aid them in preparing the SRS. The high price and extended development time required for the final product are the main drawbacks of this method.

SaaS Solutions

Customize a SaaS solution, which is a pre-built eCommerce platform, to get your meal-prep delivery app up and running. The solution provider may bill them monthly, quarterly, or semiannually depending on the chosen service plan for using their cloud server. The unlimited recurring costs of SaaS solutions make them extremely expensive in the long run, a major drawback. The high transaction fees, low number of transactions allowed, and low number of users allowed in the base package will eventually prompt businesses to switch to a different platform.

Readymade Meal Prep Delivery Solutions

Introducing your app for delivering prepared meals through this method is the most cost- and time-effective. Implementing a ready-made solution is simple, and you can pay the price in installments. Many ready-made solutions offer the feature of self-hosting, which allows companies to work with any hosting service provider they like. Entrepreneurs can also host the platform on their servers.

Conclusion

By using the data above to build a solid reputation for their brand, new entrants can get a leg up on the competition and begin making sales. Startups can achieve rapid expansion by confidently launching their meal prep delivery app based on facts and thorough investigation.

FAQs

Is starting a meal-prep business worthwhile?

Meal-kit delivery services around the world are worth more than $10 billion. Consequently, companies offering meal kits are expected to experience a growth in market share. Your company has a chance to succeed financially as a result.

What kind of customer typically uses meal kit services?

Young consumers, such as those in higher education or the workforce, primarily use the meal prep market.