Sun Basket introduces new quick-prep meal kits
- San Francisco-based Sun Basket announced a new line of meal kits designed to be prepared in 20 minutes or less. Customers can prepare the kits in one pan, and some of the meals are made for the grill instead of the stovetop.
- Sun Basket’s health-focused meal kits are personalized to users' dietary needs and include diabetes-friendly, gluten-free, paleo, vegan and vegetarian options. New recipes include steak with bagna cauda anchovy sauce, broccoli and radishes, one-pan seared salmon with chimichurri and summer vegetables and miso tempeh burgers with garden salad and dijon vinagrette.
- The company recently opened new distribution centers on the East Coast and Midwest. It currently delivers to 98% of the continental U.S. and has the capacity to take in more than $1 billion in annual sales.
There has been a recent boom in meal kit companies producing “quick” healthy meals to serve time-pressed consumers. Competitors have labored to cut down on prep times from 30 minutes to as little as 5 minutes. Late last year, Home Chef created “5 minute lunches” that requires no cooking and sold for $8. Around the same time, HelloFresh launched 20 minute meals that include pre-cut, fast-cook ingredients.
Sun Basket’s new meal kits look to tap into this trend. Although the company catered to a large variety of consumers with its tailored, health-focused meal plans, these new kits could bring in new consumers that are turned off by long prep times.
The ultra-competitive meal kit market requires a unique selling point, and Sun Basket has that as a leading purveyor of healthy meals. Earlier this year, the company raised $57.8 million in funding headlined by $42.8 Series D investment from August Capital. This is in addition to the $9.2 million invested by Unilever last year. But as the recent shuttering of Chef'd shows, investments, partnerships, and funding can sustain a company for so long.
Chef’d shut down its operations Tuesday after blowing through its cash and failing to secure more funding, according to the Wall Street Journal. In the past, the meal kit company had secured $35 million in funding from Coca-Cola, Campbell Soup, and Smithfield Foods. It was one of the first companies to put meal kits in grocery stores, with Tops Friendly Markets, Harris Teeter and Costco among those that stocked the brand.
As meal kit companies continue to struggle with profitability, venture capitalists and partners are passing on the opportunity to invest as companies battle with high marketing costs, low customer retention and an oversaturated industry.
Sun Basket’s approach to unique dietary needs and steady innovation gives it an edge over other meal kit brands. The company also has higher price tags for these specialty meal kits, helping it bring in higher profit margins. So although Sun Basket has fewer customers than some of its competitors, the company is bringing in $150 to $200 per customer on average every month.
Although the company does have more high-value consumers, it is still not profitable, mostly thanks to high marketing costs. If the company can secure a partnership with a grocer to feature its meal kits in store, it could reach more customers and eventually catch up to top players like HelloFresh and Blue Apron.
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