The COVID-19 pandemic has truly changed the way we live, shop, work, travel, socialize and even eat. Social distancing and uncertain lockdowns have given a big boost to online shopping of essentials and retail products. Work-from-home, stay-at-home lifestyles may have become the new norm, but people still have busy schedules and always seek more convenience.
Although the world has now somewhat returned to normalcy, these pandemic-induced lifestyle habits and shopping behaviors are still trending, and are most likely to stick around even when the pandemic fades away. And, to meet these changing customer demands, numerous convenience-driven home services and e-commerce delivery businesses have come to the spotlight.
One such emergent e-commerce business model is the ‘prepared meal-kit’ or ‘ready-to-eat meal’ delivery business.
What is a meal delivery business?
There is a general consensus that home-cooked meals are healthier and more nutritious compared to fast food or restaurant food. But quite often, busy schedules restrict people from cooking their meals from scratch.
A meal delivery business works on the similar ground rules of a restaurant delivery or Cloud kitchen business, only the food is either home-cooked or prepped for easy cooking. While ready-to-eat meal businesses deliver healthy homemade food within minutes to customers, prepped meal-kit businesses deliver ready-to-cook ingredients and recipes for meals that the customers can cook at their homes.
Why are meal delivery businesses gaining popularity?
Ready-to-eat and prepped meal-kit delivery services are gaining huge popularity among consumers, especially young and urban customer groups for several reasons.
- Home-cooked meals are made with healthier ingredients with good hygiene standards
- Meals prepared at home are fresh and usually cost lesser than restaurant food
- Prepped meal-kits save customers a lot of cooking time as ingredients and recipes are thoughtfully curated
- Meal-kits are customizable based on diet or health preferences and required number of servings
- Ordering ready-to-eat or ready-to-cook meals saves time-consuming visits to grocery stores and supermarkets
- Customized meal kits allow customers to try out different recipes and cuisines at the comfort of their homes
For e-commerce players too, the meal delivery model is quite lucrative as it brings some remarkable business advantages.
- It allows entrepreneurs to start a business right from their homes without investing in an office space or professional kitchen
- The meal delivery model is quite flexible and scalable as it enables businesses to either offer part-time or full-time services and scale up or down based on order volumes
- It gives aspiring chefs and skilled home cooks a great chance to start a rewarding business
With the growing popularity of the meal-kit delivery model, the competition in this space has risen substantially over a very short time. According to Statista, revenue from the meal kit service market is forecast to grow to around 24.14 billion U.S. dollars by 2027. This is an expected increase of more than double the value of 2020.
Home Chef, Amazon Fresh Meal Kits, Green Chef, Blue Apron, Dinnerly, Daily Harvest, HelloFresh, EveryPlate, Sun Basket, and Gobble are currently the top meal kit delivery players in the US.
Supply chain complexities of a meal delivery business
Having said that, the supply chain of a meal kit delivery business is a tricky one.
- Brands have to source their ingredients and cooking essentials strategically and cost-effectively, keeping in mind their freshness and perishable nature.
- Once the ingredients are sourced, they must be stored at the right temperatures and in the right conditions to maintain their quality for a reasonable time.
- Prepped meal kits and home-cooked food must be packaged with care so that they travel well and reach customers in the best shape.
- And not to forget, the final mile of the meal kit supply chain is ‘hyperlocal’ and highly time-sensitive, as every order should be delivered within a crunched time-frame of just a couple of hours.
Logistics is undoubtedly the most crucial element for the success of a meal delivery business. Fast, well-planned and efficient logistics enables businesses in the meal delivery space to streamline their end-to-end supply chain, reach their customers faster, build a strong market presence and stand out among competitors.
Businesses are therefore embracing technology to optimize their logistics operations and stay ahead of the curve.
Optimize your meal delivery logistics with Locus
Locus is a logistics planning and optimization platform that uses AI, Machine Learning and Data Science algorithms to streamline end-to-end logistics for e-commerce and delivery businesses. We help enterprises in the meal delivery space speed up their final mile deliveries by adding intelligence in decision-making and bringing more transparency across the supply chain.
- Accurate Geocoding — Locus’ proprietary geocoding engine converts physical addresses into precise lat-long coordinates on a virtual map, validating and verifying even the fuzziest addresses accurately. This helps delivery agents in locating addresses effortlessly, and reaching customers faster.
- Network Optimization — Our supply chain network design solution, backed with digital twin technology, allows you to identify the most optimal sourcing and distribution network, thereby saving costs and reducing transportation times.
- Advanced Route Optimization — Locus’ route planning and optimization software plans daily and hourly dispatches efficiently, saving you plenty of time spent on logistical planning. Our routing software generates the shortest, most fuel efficient delivery routes, while taking into account on-ground constraints such as traffic, road restrictions, delivery time preferences and so on.
- Smart Rider Allocation — Our data-driven logistics planning solutions consider rider preferences, area familiarity and proximity to customer locations to allocate delivery duties to best-suited field executives.
- Real-time Visibility — Locus’ control tower application provides end-to-end visibility through the meal delivery supply chain right from the point of sourcing to last-mile delivery. Greater visibility improves real-time decision making and fosters trust among customers by sharing important order details like ETAs and rider information with them.
Today’s supply chains are becoming increasingly complex, and the best way to simplify them is by leveraging technology in the right places. Implementing logistics tech in your meal delivery supply chain can boost your last-mile efficiency significantly and help you serve your customers better.
Now optimize your meal delivery business with Locus’ suite of logistics optimization solutions. Get in touch with our experts for a quick tour of our services.