4 reasons delivery is replacing cooking at home
- Affordable and efficient food delivery services may soon edge out cooking at home as the preferred way to get a meal on the table, according to research from Rabobank.com.
- Four indicators influenced research to reach this conclusion: increased ease of delivery, more personalization offered in ordering, an influx of virtual restaurants that only cook for take out orders, and improved data usage by eateries.
- Rabobank also suggests that more expensive 'white table cloth' restaurants that typically cater to in-house diners, rather than delivery, offer one or two meals for an online platform to become more accessible to the average customer.
As lives get busier, one of the first daily tasks to fall by the wayside is making a home-cooked meal from scratch. The emergence of meal-kits and a laundry list of restaurant delivery services make this switch easier. Many consumers say they're able to eat well, even when someone else is doing the cooking.
As expected, these same convenience industries are the ones that are benefiting from this shift in priorities. Conversely, this is not good news for Food Giants like Campbell's Soup and Kraft Heinz, which depend on consumers buying their products from a retailer. Grocery chains, for their part, also stand to be hurt by consumers' preference for delivery.
Both groups are taking a proactive approach to meeting evolving customer needs.
Campbell Soup announced in December it would purchase Snyder's-Lance for $4.87 billion. Campbell said the combination of brands will create a "snacking platform with approximately $4.7 billion net sales on a pro forma basis." Considering many consumers are turning to snacks as meals, this was a smart move on Campbell’s part to stay relevant.
Some large CPG companies are also adopting the "if you can’t beat them, join them" adage when it comes to meal kit services. Last June, Nestle USA announced that it would be the main investor in the $77 million round of new funding in Freshly, a meal kit startup.
Grocery stores are also getting in on the meal-kit game. Kroger and Publix entered the crowded field by offering branded kits in 2017. Albertsons made an even greater investment by outright buying established meal-kit company Plated for an undisclosed amount.
Consumer demand for healthier, fresh products has also cut into sales for food manufacturers. CPG sales in the first half of 2017 were down for many of the biggest companies. Because of this, many major food companies are reformulating mainstay products to contain less sugar, salt and preservatives, as well as creating entirely new health-focused items.
This strategy is a prudent one, but only if they're able to offer a product that tastes and looks the same as the less healthy original. As General Mills can attest with consumer demand to bring back original recipe Trix, artificial colors and all, consumers are picky when it comes to better-for-you upgrades.
Retailers are also bulking up on ready-to-eat prepared foods sections to appeal to busy shoppers. This option is often less expensive than ordering in, and gives the consumer a meal that tastes home made. Expect to see this sector only grow, perhaps with the addition of partnerships with delivery services. If grocery stores can maintain a cheaper price point than restaurants, consumers would likely be receptive to having a supermarket rotisserie chicken brought to their door.
The one consistency in consumer preferences is that they are constantly changing. If food manufacturers and retailers listen and respond quickly, there is no reason for them to be edged out by food delivery services.