Over recent years, demand for subscription boxes has grown exponentially, and it shows no signs of slowing down, with Juniper Research reporting, ‘the global market for physical goods subscriptions is set to surpass digital subscriptions in 2022.’
But what is driving this trend, and how can food and drink brands capitalise on it? Let’s explore the rise of the food subscription box.
According to Whistl, food is currently the most popular subscription box category in the UK, with 26% of UK shoppers signed up to food/meal and drink subscription boxes. Of those that use food subscription boxes, over a quarter (27%) rely on them for at least half of their meals.
Research shows that habits developed throughout lockdown, where access to stores and groceries was limited, are here to stay. During the pandemic, consumers became accustomed to the convenience and variety of options direct-to-door meal subscription boxes provide.
So much so that Barclaycard Payments – which processes nearly half of the nation’s credit and debit card transactions – has found that two in five consumers with subscriptions are planning to increase their reliance on the kits, because of the ease and practicality they offer.
To cater to this growing consumer demand, 44% of grocery food and drink businesses already provide a subscription service, while a further quarter are in the process of developing one.
Dominating the market are brands such as Gousto, Hello Fresh and Mindful Chef, each with a slightly different price point and angle on the menus they develop, but all battling for the attention of consumers interested in direct-to-door meal subscription services. When tried and tested by BBC GoodFood, the three were categorised as:
- Best overall recipe box: Gousto, from £24.99 for two meals
- Best healthy recipe box: Mindful Chef, from £22 for two meals
- Best recipe box for diverse recipe ranges: HelloFresh, from £31.98 for three meals
However, these aren’t the only brands finding success in the meal subscription market. Brands such as All Plants and Tastily are reaching thousands with their healthy ready meals, while Abel & Cole provide organic produce, and KBK deliver calorie controlled meal plans helping customers stay on track with their diets.
Additionally, there are a whole host of specialty food and drink suppliers helping customers discover local and independent brands. From wines and spirits, to cheeses with delicious pairings, there’s a wealth of options out there for those looking to discover something new or a little more nuanced.
But what differentiates the good from the best? All offer convenience, an opportunity to try something new, and work to reduce food waste – a major problem in the UK, with over 9.5 million tonnes of food waste produced in a single year.
Here are some of the key factors setting them apart:
The variety of the menu
Having a wide variety of dishes or products on offer is imperative to attracting and retaining customers who want to keep their weekly delivery interesting. All dishes must use good quality, fresh ingredients and should have an easy to follow recipe card as the delivery service is meant to take the faff out of cooking, not make it overly complicated. Dishes must also be developed to suit a range of diets, allergies and lifestyle choices, with vegan, vegetarian and gluten free options.
By rotating new recipes inline with current food trends into the mix alongside staple dishes, customers can continue to explore new flavours while also enjoying some familiar recipes they already know and love.
In their 2022 Food Trends Report, Gousto found that their most popular recipes were classic dishes like Smoky BBQ Chicken Fajitas, Extra Special Bangers ‘N’ Mash and Simply Perfect Beef Spag Bol – with the Fajitas ordered over 455,000 times last year. They also reported that inline with the ongoing popularity of Korean food, their Korean Fried Chicken recipe was ordered over 127,000 times, with customers loving to cook with hard-to-find ingredients such as kimchi, gochujang and gochugaru, which all give Korean food its distinctive flavour profile.
Campaigns promoting specific flavours or themes, such as street food staples or the recent Jubilee weekend, are a great way to introduce new dishes to consumers and test the popularity of certain recipes before introducing them into the roster long term.
The cost per meal
With many customers bouncing between brands making the most of initial offers for signing up, retaining customers can be difficult. As such, the cost per meal or product must be competitive and economical, especially with customers tightening their spending in the ongoing cost of living crisis.
The role of technology
Apps have proven to be a popular choice for customers to quickly and easily manage their chosen food subscription service, allowing them to select that week’s meals, apply any promotions and explore additional recipes they can create for days they don’t receive a set meal on.
Food and drink brands can also leverage personal data gathered through the sign up process, as well as ongoing insights into a customers’ preferences, to help tailor products or menus to each consumer, ensuring high customer retention rates. CheeseGeek, a popular cheese subscription box service, is a brilliant example of a food brand doing this well. As customers use the app and rate their cheese experiences, their data tool gathers and analyses that data to shape future cheese selections based on what they like and don’t like.
The future of food subscription services
Research by Whistl found that grocery retailers predict a further 35% increase in new sign-ups to subscriptions over the next 12 months, meaning there are plenty of opportunities for food and drink brands of all sizes to find success with a monthly food subscription box business model.
There’s huge scope for growth, whether you’re a large corporation or a small independent. It’s all about finding your niche and connecting with like minded customers, then keeping them interested and coming back for more delicious delights.
Are you a food subscription service looking to source any recipe ingredients such as ready made sauces, pastes or dressings? Get in touch, our team of experts over at The English Provender Company are on hand to help.