Top 500 spotlight: How meal-kit e-retailers are redefining food shopping
May 19, 2016 06:00 AM
Among the top five fastest-growing e-retailers in the newly released Internet Retailer 2016 Top 500 Guide and Second 500 Guide, three reside in the food category and two are part of the rapidly expanding list of subscription meal-kit delivery services. These merchants achieved rapid growth in 2015 by redefining how consumers shop for food online while reducing trips to the grocery store.
Established in 2012, Blue Apron Inc. (No. 231), was the first major player to launch online and offer shoppers fresh, preportioned ingredients for them to make meals at home. With a strong buzz on social networks—people love taking photos of the meals they’ve cooked—and an attractive referral program that gives free meals to new sign-ups, the merchant grew quickly. In 2015 Blue Apron increased sales an estimated 80.0% on the heels of 550.2% growth in 2014. It has the biggest market share—71.7% with estimated sales of $117 million annually—of the subscription meal merchants tracked by Internet Retailer.
Blue Apron’s success attracted competition from other well-funded startups of subscription meal-kit retailers, and some chalked up similar sales growth. Their results show that, at least for now, there’s room for multiple players.
Smaller merchants in this sector far outgrew their larger competitors in the Top 500, as the 23 merchants in the Second 500 food and drug category collectively increased web sales 39.3% in 2015, versus the 30 merchants in the Top 500 which grew 10.8% as a whole.
Second 500 merchants Home Chef (No. 813) and Green Chef Corp. (No. 831), for example, have a nearly identical business model to Blue Apron, though Green Chef ships only organic ingredients. In one year Home Chef’s and Green Chef’s web sales grew 2,500.0% and 900.0%, respectively, and accounted for 21.4% of the $88.7 million in growth among all retailers in the Second 500 food and drug category.
The full Top 500 Insider report on meal-kit e-retailers—plus dozens of others that provide a host of exclusive data and in-depth analysis on trends driving growth and change in e-commerce—is available to members of Internet Retailer’s database website, Top500Guide.com.
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