How Fresh Produce Plays Key Role In New Generation Of Delivery Services

By Maeve Webster, Senior Director; Mike Kostyo, Publications Manager, Datassential

Late last year, Datassential asked consumers which factors were most important to them when choosing a meal delivery service. Topping the list was fresh ingredients. Forty-eight percent of consumers said fresh ingredients were very important to them, beating factors such as healthy meals, the use of local ingredients, and options for special diets (gluten-free or vegetarian).

In fact, fresh produce is one of the most important differentiators for a whole new generation of meal and grocery delivery services that are growing fast and earning lots of attention. These services often make claims of “disrupting” traditional industries and becoming the “Uber” of meal delivery. And those claims may not be far off.

For Datassential’s Creative Concepts TrendSpotting Report on meal delivery services, we took a comprehensive look at these services, from the ingredients and flavors you’ll find on the menu to the technologies making these services possible. We also surveyed consumers for their thoughts on these companies, from their interest in the types of dishes being offered to the concept’s overall appeal. In particular, we looked at three types of services: prepared meal delivery, meal kit delivery, and grocery/packaged goods delivery.

Freshness & Produce Is Key

“From kale to baby bok choy, we’re choosy about what goes into your box,” proclaims. “Great meals start with fresh ingredients,” says Blue Apron promises produce that is “fresher than the supermarket.” For companies focused on prepared meal delivery (such as Plated, Sprig and Blue Apron), this focus on freshness is designed to de-stigmatize pre-made dinners. These aren’t your typical frozen dishes. Many of these companies hire renowned chefs or partner with local restaurants to deliver hot, on-demand, restaurant-quality dishes. Berkeley, California-based SpoonRocket uses algorithms to position delivery drivers around the city before customers even order, using specially-designed delivery vehicles with built-in hot and cold compartments.

For those consumers using meal kit delivery services, which deliver pre-portioned ingredients to customers to be prepared on the customer’s schedule, novelty and reducing food waste are key factors. Many note that these boxes allow any customer, anywhere in the country, to find ingredients that are typically only available in specialty grocers or urban areas — for example, daikon radishes, escarole, or Calabrian chili peppers. A mix of healthy dishes, customer favorites, and on-trend produce is also key for many services. Almost everyone offers a variation on a kale salad. Because the ingredients are portioned out for each dish, these services noted that customers don’t have to buy entire bunches of cilantro or even an entire lemon if a dish only calls for a sprinkling or a squeeze.

While grocery delivery may be the most mature segment of the delivery market (Peapod launched in 1989), fresh produce is sometimes a pain point to try and convince customers that a surrogate shopper will choose produce that’s up to the customer’s standards. Almost every company goes to great lengths to reassure customers that the company’s standards are exceptionally high and that it will return, replace, or reimburse any produce that isn’t up-to-par. It seems to be working. Grocery delivery services are one of the fastest-growing segments of the meal delivery market. Last year the New York Times reported Instacart’s gross revenue grew more than 10 times last year, to more than $100 million annually. Now the company is expanding into suburban markets and directly partnering with supermarket chains after showing that a majority of Instacart orders do not replace traditional shopping trips, they augment them.

Customers & Companies Are Responding

According to Datassential’s research, one-fifth of consumers tried an online or mobile-based delivery service, and more than a third love the idea. Now everyone is getting into the game. In addition to Amazon, Google Express partnered with brands like Costco, while Wal-Mart expanded both its pickup and delivery services this year. In April, Chipotle announced it would begin offering delivery in 67 cities through a partnership with Postmates on-demand delivery service. Celebrity chef David Chang announced he is curating the menu for Maple, a recently-launched, Manhattan-based delivery-only restaurant.

Even Uber is aiming to be the “meta-Uber” of meal delivery with its UberEats platform, leveraging the company’s drivers to deliver meals from local restaurants. Investment capital continues to flow into the delivery startup space, as investors make bets that technology usage (most delivery services are web or app-based), urban population growth, and an on-demand economy will continue to drive interest and growth in these services.

In the near future, customers may only have to go as far as their doorstep for fresh produce.

45% of consumers said meal choice was important in choosing a delivery service.

31% of consumers said healthy meals were an important factor in choosing a meal delivery service.

14% of consumers used a supermarket/local grocery delivery service (Instacart, Peapod) in the past.