What’s The Secret To Being A Successful Meal Kit Product Manager?

Meal kit product managers need to find new ways to be successful
Meal kit product managers need to find new ways to be successful
Image Credit: Alyson Hurt

The world that we live in is changing and what this means for product managers is that we need to find ways to change with it. One area that is undergoing dramatic changes is how we go about fixing dinner. It used to be that you and I would either eat out or we’d go to the grocery store, pick up some ingredients, and then come home and make a meal. However, that has all changed now. The arrival of companies that make meal kits have created a system where we now get the ingredients that we need to make dinner delivered to our house and then we just have to spend a few minutes whipping up a delicious meal. The challenge for the product managers at these meal kit companies is how to stay in business.

The Challenge Of Meal Kits

Creating a meal kit for time crunched consumers to use to make a quick and delicious home cooked dinner is a great business idea. In fact, it’s such a great idea that a number of different firms have jumped into this market. What that means for the product managers at these companies is that they now have a lot of competition to deal with. Where things can get even trickery is that that the business model for selling meal kits requires customers to sign up to a subscription service in order to get meals delivered to their house. A lot of people sign up, but then a lot of people also quickly cancel their subscriptions. It looks like it’s time for the meal kit product managers to make a change to their product development definition.

Over at the HelloFresh meal kit company, they have decided to take a different route. They are going to start to put their meal kits on supermarket shelves. The reason that they will be doing this is because their product managers believe that they need the retailers to increase their subscription business. Initially, the HelloFresh meal kits will be available on shelves at Giant Foods and Shop & Save stores. Other meal kit firms are doing the same thing. Blue Apron is selling its meal kits at Costco. Albertsons purchased the meal kit company Plated and is now offering their products on its shelves. Likewise, Kroger purchased meal kit company Home Chef and will be offering it’s meal kits along with their own in-house developed meal kits.

So why did HelloFresh decide to go the retail route? Their product managers believe that in the short term, subscriptions will continue to drive their sales. However, in order to acquire new customers, they believe that they need the help of the retailers. Their target customer is one who does not have the time or desire to pre-plan as much as perhaps they should. HelloFresh believes that their retail offerings will complement their subscription service offerings. HelloFresh is, of course, in discussions with other retailers to start to offer their meal kits in their stores.

The Strategy Going Forward

In the world of meal kits, it can be a real challenge to get new subscription customers and then keep them as customers. The people who study the meal kit market believe that the meal kit companies that will be successful in the long run are the ones who will be able to sell their products in stores in order to keep increasing sales. The belief is that a meal kit company has a much better chance of being profitable in a grocery store than they do by being a subscription only service.

It’s important to understand that in the world of meal kits, subscriptions are still the driving force behind sales. However, in store purchases grew by 27% last year and this generated US$155 million. All of this would look good on anyone’s product manager resume. What’s interesting is where the HelloFresh product managers decided to sell their meal kits. They chose Giant Good and Shop & Save because these two firms have a concentration of stores on the east coast of the United States. The consumers in this area are known to be the ones who seek out more convenient meals.

The market for meal kits is still relatively brand new. It’s growing fast, but nobody can claim to fully understand it. The retailers who are involved in meal kits are searching for the right partners in order to be successful. The HelloFresh product managers have done very well since the company first came to the U.S. in 2012. In one of its most recent quarters the company was able to report $215 million in sales and 1.2 million customers. Their closest competitor, Blue Apron, reported $197 million in sales and 786,000 customers. The HelloFresh product managers understand they they need to keep growing and evolving in order to remain a market leader. In order to make this happen, they recently purchased an organic meal kit maker called Green Chef.

What All Of This Means For You

In this crazy world of change that we all live in, how we make our dinners is yet one more thing that is undergoing change. The arrival of meal kits has changed how a fresh home cooked meal can be prepared. These subscription services allow people to receive kits that contain all of the necessary ingredients that will allow them to create a dinner meal. However, the market has become crowded and the product managers at the meal kit companies need to revisit their product manager job description and find ways to continue to be successful.

One of the biggest challenges of being a product manager at a meal kit company is that your business is a subscription business: people sign up and then they can drop their subscription. Over at the meal kit company HelloFresh they have decided to partner with the grocers Giant Foods and Shop & Save and put their meal kits on their retail shelves. The reason that they decided to this is to attract new customers and to complement their subscription service. It is believed that meal kit companies are going to have to be partnering with retailers in order to be successful in the future. In store purchases of meal kits is a growing market. HelloFresh has decided to partner with East Coast retailers because they believe that their customers are the ones who will most likely purchase meal kits. HelloFresh is doing well as a company; however, in order to continue to grow they have purchased an organic meal kit company.

It appears as though the meal kit companies have tapped into an under served market need. However, since this business is relatively easy to get into, there are now a lot of competitors in this area. The HelloFresh product managers appear to be doing the right thing in partnering with grocery retailers. In order to be successful in the long term, they are going to have to partner with more retailers and offer them a diverse set of meal kits. Let’s see what shows up for supper in the future!

– Dr. Jim Anderson
Blue Elephant Consulting –
Your Source For Real World Product Management Skills™

Question For You: What can meal kit product managers do toe make their products stand out when they are on retail grocery store shelves?

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What We’ll Be Talking About Next Time

Every product manager wants to be in charge of a product that customers want. However, it turns out that some of us have to deal with situations in which our customers want what we have, but they are also afraid to give us what we need in order to deliver our product to them. A great example of this happening in the health care market. Customers are very aware of the data privacy issues and so they are hesitant to use the health care products that the product managers are providing them with.