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Problem: The food subscription industry has been struggling recently, with Blue Apron reporting a record 27.4 million dollar loss in the first quarter of 2021. Coming down from their all-time high from the pandemic, many businesses in the industry have faced increasing competition and decreasing consumer interest. 


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Solution: Design a subscription food service model that carves out its own niche in this oversaturated market. First, start by specializing in veganism. It’s an investment in a growing market, with the global market being projected to experience a 13 compounded annual growth rate of 63.1 billion dollars by 2028. A quick Google search shows how this market is far less competitive, giving more breathing room for startups. Most lists that come up for just any old food subscription food service model feature more than 20 different businesses each vying for the attention of customers, however, most lists that feature vegan versions are usually shorter than 10 spots. On top of that, since the pandemic, HelloFresh expects some of the drivers of growth to be permanent, such as the rate of people working from home to permanently increase, as well as a renewed focus on sustainability and falling costs of food subscription services approaching that of traditional fast food services. According to QualiSights CEO Advani, meal kits have not only become cheaper throughout the years but also more creative.

“Meal kit creators are exploring different pairings and seasonal themed dishes that were not previously offered,” he said. “A major element that’s shifted is affordability. Before the pandemic, many consumers viewed the meal kit option as a luxury with a premium price tag. Now, meal kits are for everyone. They are cheaper per serving than you’d pay at many fast-food establishments.”

That’s good news for us since it means that we have yet another place to fill a niche. That brings me to my second point, hire local chefs responsible for creating regionally inspired vegan dishes. It fits the bill for the increasing demand for personalization from customers in the food subscription service industry by providing undeniable authentic appeal and community engagement. 

Finally, the third part that makes the business stand out is the fact that it’s dynamic and convenient. A partnership with delivery platforms like UberEats, GrubHub, DoorDash, and the like enables users to easily order it in an app instead of having to navigate a website, not to mention the built in marketing that comes along with putting yourself on a platform with more than a combined 50 million users. Additionally, it’ll employ a customizable time scale, meaning people won’t be limited by being forced to choose between a weekly or monthly delivery rate. People don’t need new food from subscription food services the same way you don’t really need new clothes on a set time scale. 

These three factors combine to form a potent combo that takes advantage of the asset-light business model that made ButcherMeats a success, and the ghost kitchen model that enables quick expansion without the need for warehouses. These eliminate what Phil Kafarakis, chief executive of the International Foodservice Manufacturers Association, says is the number one killer of profits for subscription food services, and logistics. 

“Then here comes COVID, and everyone is home and on the e-commerce kick. Still, their bottom lines were horrible and it costs a lot to source products, with transportation and logistics killing them. They couldn’t make any money, now along comes inflation and losses are mounting.”

In terms of the market, it’s not looking too shabby. Global meal kit delivery services are expected to grow at a 15.3% compound annual growth rate from now until 2030. As of now, 17 percent of Americans have subscribed to a meal delivery service at some point in time, and of those percentages, 90 percent referred others to the service. 

Source: https://www.grandviewresearch.com/industry-analysis/meal-kit-delivery-services-market

Monetization: A Consistent Subscription Fee 

Contributed by: David Salinas (Billion Dollar Startup Ideas)

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