Specialty food makers are forging mutually beneficial relationships with meal kit makers.
Sales of meal kits in the United States in 2017 totaled $2.6 billion, a figure that was estimated to reach $3.1 billion by the end of last year—a 22 percent jump, according to the report, “Meal Kits: Trends and Opportunities in the U.S.,” from Packaged Facts.
Customers continue to turn to meal kits for the ease and innovation they offer. According to a study by Datassential, 39 percent of respondents like discovering new ingredients through using meal kits. These are often supplied by small, specialty food companies for which providing their products can be a boon.
Brooklyn Delhi founder Chitra Agrawal, whose Tomato Achaar Indian Chile-Tomato Sauce won the 2018 Winter Fancy Food Show’s Front Burner Foodservice Pitch Competition, was introduced through a friend to New York City-based Blue Apron in 2017.
Today, the company uses her Tomato Achaar in several meal kits. “They’d initially looked to include it in Indian-style meal kits but their culinary team put it in all types of recipes. We saw it as being a crossover product that didn’t need to just live in an Indian meal,” Agrawal says. “Their chefs really ran with it.”
While working with Blue Apron has meant a steady income for Agrawal, who provides about one million 1.5-ounce cups of achaar to the company annually, it’s also helped get Brooklyn Delhi’s name out there, which is beneficial because Brooklyn Delhi can’t afford demos at this point.
Scaling Up
Agrawal has scaled up production since working with Blue Apron but has not made any changes to her recipe—she simply provides her product in 1.5-ounce cups.
Kenshiro Uki and his sister, Hisae, have been working with Blue Apron since 2014 and until then mostly sold their Sun Noodle ramen to New York City restaurants. But thanks to Blue Apron, “families we couldn’t reach have heard of us,” says Uki, vice president of operations at the Honolulu, Hawaii, company. “Blue Apron educated them about fresh ramen and our retail ramen is now in parts of the country that we’ve never been to. It’s made it much more approachable and helped consumers understand what fresh ramen is.”
Meeting Blue Apron’s demand was difficult at first, so the company ramped up production in its New Jersey facility for two years before it came on board. Last year, it sold roughly two million ramen servings to the meal kit company, and though the number fluctuates depending on the recipes Blue Apron creates, the quantity has increased annually.
Blue Apron did extensive R&D testing of Sun Noodle’s products, and in the end, asked the company to create a bespoke noodle. “It’s much more manageable for them,” Uki says, and worth it for him, given the volume the meal kit company purchases. The custom-made noodle is versatile enough for brothy and brothless dishes.
The Zen of Slow Cooking is another specialty food business that has gotten involved with meal kits. In 2016, Chicago-based Peapod approached Meg Barnhart, the company’s owner, because it was interested in using her spice blend products in meal kits.
“They loved that we’re small and local and have clean products. And we love them—Peapod really took the time to figure out how to work with us,” Barnhart says.
Recipe Development
The Zen of Slow Cooking just launched its third spice blend with Peapod. The specialty food maker does all its own recipe development, then Peapod tests the recipes in its kitchens “to make sure they can follow them and that they come out the same,” says Barnhart.
The partnership has been so beneficial to Barnhart that she needed to outsource production. She ran a successful Kickstarter campaign, then started working with a co-packer. In 2018, Peapod meal kits contributed 8 percent to Barnhart’s bottom line.
She doesn’t see expanding to other meal kit companies any time soon because most have low budgets for seasonings and her high-quality products are not cheap.
Working with small, specialty food companies is essential, says John Adler, vice president of culinary with Blue Apron. Not only does Blue Apron want to provide great meal kits, but also wants to introduce its customers to new, niche companies with excellent products. “Our No. 1 goal and mission is to make home cooking accessible for everyone and that means you start with incredible ingredients,” he points out.
Other important factors to Blue Apron when considering specialty companies to work with, are food safety and the ability to provide portioned amounts. “We aim to partner with suppliers that have the highest level of certification and all documentation in order.
Additionally, their ability to pack in small prepackaged amounts, and showcase this, is always attractive to us,” Adler says.
Specialty Sustenance
HelloFresh takes it a step further. “We include a lot of snacks and samples in our boxes, that people can try while they’re cooking the meal kit,” says Matt Fitzgerald, senior vice president of marketing. “At HelloFresh we love finding new vendors and it leads to a fun experience for the customer.”
Working with specialty food companies benefits everyone. By showcasing them, Adler says Blue Apron gains customer trust through its savvy sourcing; the brand’s image and reputation are boosted; and customers get to eat well. “These niche companies bring an integrity to our products,” Adler says.
New York City-based Marley Spoon, which distributes Martha + Marley Spoon and Dinnerly meal kits in the U.S., prefers working with specialty food manufacturers because “they’re more nimble, flexible, and can do something more custom,” says Tom
O’Brien, head of U.S. procurement. “It means we’re often talking directly to the decision maker. They can make things happen, often quickly.”
Plus, it reflects the quality that Marley Spoon provides, though O’Brien admits the company soft-sells these small purveyors “because we don’t do it for marketing reasons.” He’s always on the lookout for specialty food companies, and typically finds them, he says, through trade shows and trade publications, but many come through cold calls to the company.
It can take a while to onboard a new company—up to 90 days, according to O’Brien. Agrawal says it took around a year to have her achaar introduced to Blue Apron’s kits but as part of her arrangement, Blue Apron took care of everything. “They’re a really dialed in group,” she says.
Blue Apron tends to recognize its small suppliers on packages. Most feature the name of the company “to highlight our artisanal suppliers whenever possible.” Marley Spoon does most of its recognition via its website.
The biggest challenge with the small suppliers is whether they can provide product in the volume needed, Adler says. It’s the same at Marley Spoon. “It’s a problem if they can’t keep up with our demand,” says O’Brien, adding that if they can’t, the company might make them a regional supplier instead of national.
Amanda Baltazar is a freelance writer based in Anacortes, Wash.
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