Dive Brief:
- Austin, Texas-based Snap Kitchen is the one of the newest companies to sell prepared meals online, according to the Houston Chronicle. The company, which began as a brick-and-mortar food retailer in 2010, recently expanded delivery of its prepared meals to 15 cities including Washington, D.C.; San Antonio; New York City and Oklahoma City.
- Customers can order boxes of six to 12 meals online or through an app, and can choose a subscription or on-demand delivery. Products are priced between $3.99 and $12.99 per meal depending on the size of the order, with deliveries arriving in a day or two. Snap Kitchen produces as many as 60,000 meals a day.
- The company offers options to meet specialty diets including vegan and vegetarian, Whole30, Paleo and Keto. Meals are chilled, not frozen, and don't contain gluten, antibiotics, hormones or artificial colors or preservatives. Dietitians design the meals, which are prepared in Philadelphia and Forth Worth, Texas.
Dive Insight:
Snap Kitchen operates 34 retail stores in Texas and Pennsylvania, but moving forward it doesn't plan to open additional locations, CEO Jon Carter told the Chronicle. The company consolidated its Houston and Austin operations into one central kitchen in Fort Worth a couple years ago, and is now fully focused on e-commerce.
Specifically, Snap wants to grow its subscriptions and increase production by 50% to 100%, Carter said.
The prepared food industry is bustling, and dedicated companies like Snap Kitchen, Freshly and Territory Foods are giving grocers and traditional meal kit players a run for their money. Prepared meals have generated more than $65 million this year, and the category is expected to grow 2.6% annually for the next five years.
Not only are Snap and its closest competitors focused on health and dietary preferences, but they cater to a few of the biggest trending convenience factors among consumers today: delivery, pre-made meals and meal prep substitution. Restaurants, in-store prepared foods, meal kits and frozen meals don't usually meet all those requirements on their own.
Some grocers have responded by adding their own prepared foods to their e-commerce and delivery platforms. Publix recently began delivering its famous pub subs to customers in select locations in Florida, while Wegmans rolled out a Wegmans Meals 2 Go app that partners with DoorDash to deliver foods like wings, pizza, salads and sushi. Grocery delivery company Shipt told Grocery Dive that many of its clients are adding foodservice meals online, and some including Costco, H-E-B and Meijer already do.
Like most companies in the space, Snap Kitchen has some hurdles ahead. Snap can expect to see some of the same challenges that meal kit companies do with gaining and retaining subscribers, and it could also face the profitability issue that many food delivery companies have encountered.
