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WSj on Food Delivery Companies


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in todays WSJ there is a n interesting article on food delivery companies :

 

http://www.wsj.com/articles/meal-delivery-company-sprig-goes-lean-1465257256?mod=LS1

 

this may or may not be behind a paywall  I can't tell :

 

a few excerpts :

 

"';From shipping boxes of ingredients to mailing meals and delivering hot meals on-demand, these companies are betting consumers are willing to pay for convenient alternatives to grocery stores and restaurants, but ingredients, preparation and delivery costs yield tight margins.""

 

"" Blue Apron Inc., which also sells boxes of ingredients customers can cook at home and was valued at $2 billion last year, has shortened the list of ingredients in its recipes to make them simpler for home chefs. Rather than list three or four spices in a recipe, for example, the startup combines them into one bag.""

 

"" Venture capital’s appetite for meal startups has shrunk, putting pressure on the startups to become more lean. In the first quarter, firms forked over $609 million in funding for food startups—including on-demand meals and grocery delivery—less than half of the $1.42 billion they invested in the same period last year, according to venture-capital research firm CB Insights.""

 

"" 

By last year, however, ratings on their most popular meals had started to decline. Mr. Biyani says high-end chefs can only make 100 meals at a time without sacrificing consistency—a threshold that Sprig had passed.

""

 

""  To make the food more consistent and bring costs down, they organized the kitchen—a former Chevys restaurant—into an assembly line. For example, the eight steps in making a meatball marinara—including cutting vegetables, mixing ingredients and cooking the meatballs—were broken up among eight different cooks. ""

 

 

Edited by Smithy
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12 minutes ago, rotuts said:

 

in todays WSJ there is a n interesting article on food delivery companies :

 

http://www.wsj.com/articles/meal-delivery-company-sprig-goes-lean-1465257256?mod=LS1

 

this may or may not be behind a paywall  I can't tell :

 

 

Thanks for posting that.

It is behind a paywall, but as usual, you can google the article title (Meal-Delivery Company Sprig Goes Lean) and get the full article.

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 Perhaps he was offered free reign to use his talents to create tasty meals until the bottom line required a rethink.

 I still think there is a narrow demographic that could support such a service. But I do not think it will be supported by people who love to cook. Those people know that a good meal begins in the market and must often evolve on the fly when the planned fava beans look sad but the asparagus is fresh. 

 I noticed that any meal involving steak from the company I dealt with used flat iron steak.  Nothing wrong with a good flat iron but it certainly isn't the steak of choice in too many dishes.  Kale appears frequently -- it may be healthy but it's also cheap. 

While I could purchase the ingredients for any of the meals for far less than I was being charged, the labour, overhead, packaging and shipping would quickly put me out of business if I was attempting to sell them for $10-$12 a meal. 

 

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Anna Nielsen aka "Anna N"

...I just let people know about something I made for supper that they might enjoy, too. That's all it is. (Nigel Slater)

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I have been known to take on some crazy culinary adventures in my time and even in my prime I would never have considered trying to open/run/hoping to make a bundle of $ on a 'kit' meal delivery service. Even in today's world - ruled by the internet (and especially social media), 'trends', and overly scheduled 'dink' lives, I just can't see long term viability with that kind of venture.

 

I agree with everything Anna said. Aside from the limited audience (and the difficulties of retaining a tenuous customer base for any length of time), the obvious need for necessary bottom line frugalities - you can't serve filet without charging for filet so menus have to be limited by cost/price and that may lead quickly to lack of variety which leads to eventual customer boredom/disinterest, etc. - seem to preclude the idea that this would be a 'good business' to invest in. Even if such a company does not actually cook the food and run a 'restaurant' per se, there are health concerns and associated regulations to comply with (added costs). Additionally, economies of scale are required to turn a buck long term (and employing x number of prep chefs costs money and probably leads to turn over issues - which means one begins to consider 'robots' as line 'cooks' or outsourcing the cutting job to China and injecting possible consistency/quality/safety issues as a result) - and whether one asks for people to 'contract' for weekly deliveries or not, the likelihood of retaining customers long term is very slim so one cannot count on needing exactly x # of meals to be shipped each week. How do you accurately predict profit based on that volatility in demand?. Add in ingredient acquisition and cost variability problems and shipping/environment/perishability issues and all these seem likely to kill this kind of business sooner than later unless you are only catering to celebrities with unlimited expense accounts - but then most of them probably have personal chefs.

 

I don't get why the well known chefs are even attracted to attach their names, much less actually 'work for' these businesses - unless there is a BIG money being shelled out. Money laundering? I doubt these guys are naïve - maybe it is ego? Something other than smart business practice has to be going on here.

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  • 1 month later...

@Deryn Agreed. I look at what is shown in the boxes and cannot see where the profit is.  I also look at the concept and don't get how the VCs are putting this much money into the things. Their market is a sliver of the whole. Its people who would cook if somebody shopped for them and have enough money for this... yet dont want to eat out. And who don't have a big family.

 

What was the pet food company...pets.com? that had a sock puppet? Well-capitalized then gone in a flash because it just wasn't a viable concept.

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seems to be one of those great ideas that has more than a few 'outlandish' claims and details hanging on to it....

 

if you eat out 100% of the time, could work.

the lack of spices and x and y and z . . . really?  this is only true if you never cook at home....

 

can't shop . . . really?  these folks are spending way too much time thumbing on their phones.

if you live in the wilds of Alaska, mega-mart shopping can be tricky.

if you live in suburbia, you probably drive past three or four stores coming home from to work.

if you live in the city, you probably walk past dozens of stores coming home from work.

if one can't spare 10 minutes to drop in and shop for dinner, one should probably re-examine one's priorities.  might be an app for that . . .

 

our daughter lives in the city.  standard operating procedure:  bring home take out. 

because the kitchen is so small and so unequipped,,,,, that's why.

so how's a body going to cook the stuff in a box?

 

mehinks it's a fad.  time to sell one's stock in Slinky and HulaHoop.....

 

 

Edited by AlaMoi (log)
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To be a fad it has to have wide acceptance. I wonder if this qualifies. But yes....

 

Our son in grad school has a tiny kitchen. My bathroom is bigger. But he manages to shop for himself and cook stuff with his crappy stove and excellent Breville Smart Oven that he finds satisfying and is pleasing to his friends. He sees this ingredient delivery service as silly.

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16 hours ago, gfweb said:

I look at what is shown in the boxes and cannot see where the profit is.  I also look at the concept and don't get how the VCs are putting this much money into the things. Their market is a sliver of the whole. Its people who would cook if somebody shopped for them and have enough money for this... yet dont want to eat out. And who don't have a big family.

I agree on the profit question.  But I know quite a few people who fit that criteria and have been using these services for 3-4 years and have no plans to stop.  They continue to find it worth the cost to have the planning and shopping component done for them so that a few nights a week, they can just come home and start cooking.   

 

8 hours ago, AlaMoi said:

if you live in suburbia, you probably drive past three or four stores coming home from to work....

...if one can't spare 10 minutes to drop in and shop for dinner, one should probably re-examine one's priorities

I live in a suburban area and while there are markets where these folks shop for their non-box meals, I can't imagine getting in and out of them in 10 minutes during that super busy 5:30-7 PM time, especially with a couple of hangry kids in tow.   Of course, they could do a better job of planning and do those grocery runs at 5 AM on Saturday before they pack everyone into the car at 6 AM to drive to soccer/hockey/academic decathlon/whatever practice but instead they choose to outsource planning and shopping for a few meals.  Perhaps not the priorities you would choose, but it doesn't seem that unreasonable to me.

I suppose they may shift gears and choose other options at some point, but I've been surprised how long many of them have stuck with it.

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During our careers in DC-Metro, I worked 9 to 10 hour days, plus a 1 hour commute.  My husband was self-employed and his clients were spread out over a very wide area throughout DC, VA and MD.  

 

If we were still in that situation (we retired in 2003), I'd certainly have tried these food options.  

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  • 2 months later...

Here's another meal delivery system I ran across today. This is aimed at seniors. The meals are frozen and only require re-heating. I might be tempted to give it a try for those days when I have nothing left to give but still need a meal. Of course the answer is to prepare my own frozen meals but that rarely happens.   I see much more of a market here as children of an ageing population look for ways to support their parents. 

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Anna Nielsen aka "Anna N"

...I just let people know about something I made for supper that they might enjoy, too. That's all it is. (Nigel Slater)

"Cooking is about doing the best with what you have . . . and succeeding." John Thorne

Our 2012 (Kerry Beal and me) Blog

My 2004 eG Blog

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in my area    E of BOS , two of the chain markets   ( RocheBros  and Market Basket ) have meals that their kitchens have made in the refrigerated section.

 

this is in addition to the regular deli stuff and a higher end prepared dishes section where fresh food is scooped up to order , some of it changing day to day and already hot.

 

the prepared refrigerated meals are completed meals.   Ive had the Turkey dinner several times.  single portion and double portion.

 

its quite good , and the turkey is from a roasted bird not a cryovac's bird.  stuffing is good as are the mashed potatoes and squash.  there is a small container of gravy 

 

and one of cranberry sauce.  except for the gravy  and the fact there is celery in the stuffing  ( very finely diced , Thank God ) its almost as good as home made.

 

if they included a spritzer of " roasting Turkey aroma for the kitchen "  it would be even better.

 

MarketBasket is a less expensive store, but has the same quality as RB.  their generous single portion turkey dinner is 5.99   RB single is 7.99  , the double  ( not quite )

 

is 11.99      they also have the general standards :  meat loaf , chicken parma w pasta  etc  pork chops  , even fish at RB.   Ive only had the Turkey

 

Ive been surprised at how good it is.  no dark meat though   just turkey breast  but cut very thick.

 

a PS :  in my area a BigMac is 4.87   and a BigMac  meal [sic] is 7.89.

Edited by rotuts (log)
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15 hours ago, Anna N said:

Here's another meal delivery system I ran across today. This is aimed at seniors. The meals are frozen and only require re-heating. I might be tempted to give it a try for those days when I have nothing left to give but still need a meal. Of course the answer is to prepare my own frozen meals but that rarely happens.   I see much more of a market here as children of an ageing population look for ways to support their parents. 

 

My late wife provided a website and operational advice (her mother had been a successful chef and caterer) to a similar service in California years ago. They eventually folded when the proprietor got cocky -- after my wife had moved on -- and sunk too much of their operating capital into a refrigerated delivery truck, just as the 2008 recession hit. 

 

They'd been delivering just fine with Cambros and picnic coolers in a random assortment of SUVs and pickups, but the proprietor had her heart set on the big truck...which, of course, was hard-pressed to meet the delivery schedule in their far-flung area of the Sierras. 

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"Not knowing the scope of your own ignorance is part of the human condition...The first rule of the Dunning-Kruger club is you don’t know you’re a member of the Dunning-Kruger club.” - psychologist David Dunning

 

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just to finish up.  I was by MarketBasket so picked up this :

 

T1.jpg

 

I had wood to stack , things to do , WS # 7 to watch so .....

 

plated up w a pat of butter in the potatoes and the squash , window green onions for color.

 

T2.jpg

 

 

worth every penny.

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1 hour ago, NWKate said:

In one word- YUCH- I am not to the point that having others pick my menu and ingredients appeals to me- good luck to you all.

 

 

 

 

 

 That is a choice you are obviously still able to make.   It is not necessarily a choice that all of us can still make.   I do hope life does not send you any curveballs you were not prepared to catch.

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Anna Nielsen aka "Anna N"

...I just let people know about something I made for supper that they might enjoy, too. That's all it is. (Nigel Slater)

"Cooking is about doing the best with what you have . . . and succeeding." John Thorne

Our 2012 (Kerry Beal and me) Blog

My 2004 eG Blog

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2 hours ago, rotuts said:

just to finish up.  I was by MarketBasket so picked up this :

 

.........

 

I had wood to stack , things to do , WS # 7 to watch so .....

 

plated up w a pat of butter in the potatoes and the squash , window green onions for color.

 

 

 

 

worth every penny.

 I would not have chosen the turkey (dreadful stuff) but replace that sad bird with some roasted pork or even chicken and there are days when I would be grateful for such a meal. 

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Anna Nielsen aka "Anna N"

...I just let people know about something I made for supper that they might enjoy, too. That's all it is. (Nigel Slater)

"Cooking is about doing the best with what you have . . . and succeeding." John Thorne

Our 2012 (Kerry Beal and me) Blog

My 2004 eG Blog

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well:

 

I looked over what they had.  they had a few meatball items w some pasta and such.  they did have a very thick cut pork chop that looked smoked  and some salmon

 

and the usual beef meat loaf.  the was also a 1/2 small roasted chicken with similar veg   this is food made in their kitchens ...    I really do like  ' a turkey dinner ' so this is the only items Ive tried.  for the record , I picked it myself 

 

no others involved.  Id say it was B + to A -  dinner food.  not that different.  it was far better than any frozen items they ferried , from ConAgra etc.

 

it beet any fast food Ive ever had.   I pointed this out to suggest that --  Supermarket-Kitchen made food made fresh  is around and can be satisfying in its own way.

 

the squash was identical to the kind I make , and the potatoes close :  I leave the skin on and use more butter.  there was nothing  ' institutional ' about either

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It's ironic that the Fresh & Easy chain went bust here in the States. Half of the store, I kid you not, consisted of pre-made meals/dishes. They'd make a killing in today's cuisine-to-go culture.

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