7 Tips for Starting a Restaurant Meal Kit Delivery BusinessWant a slice of the meal kit pie? Consider this advice from restaurateurs who beat you to it.
Meal kits — think Blue Apron, Plated and HelloFresh — aim to fill the space between takeout and cooking from scratch. And it’s a big space: In 2016, meat kit sales were about $1.5 billion, according to market research firm Packaged Facts. Even Amazon is getting into the act, offering kits from Martha Stewart and Marley Spoon.
Meal kits are especially popular with millennials. One poll by research and consulting firm Technomic found they were twice as likely as older people to have used a meal kit service in the past three months.
This trend is having an effect on grocery stores and restaurants, as people spend less there after signing up for a meal kit subscription. But a few restaurants are starting to test the market themselves. They see an opportunity to leverage their brand and expertise as well as expand their customer base beyond their own tabletops.
Does it make sense to think about adding a meal kit offering to your business? NCR Silver talked to two restaurateurs who’ve made the leap to find out what’s involved. They offered this advice.
Choose a signature dish
A signature dish, along with an existing customer list, can be your biggest advantage. Chuck Sillari, owner of Boston Burger Co., had it in the bag. A lot of his business (the restaurant has three locations in or near Boston) comes from students but also from tourists from all over, and for years he’s heard them pine for a Boston Burger in their town. “So we knew there weren’t a lot of places creating the same product that were creating,” he said about his menu of over-the-top burgers, which has been featured on “Diners, Drive-Ins and Dives.”
He launched meal delivery kit business Burgabox in 2016 with six of the restaurant’s most popular burgers. Customers sign up online and the kit, which includes sides, is delivered to their door. One kit, which serves two people, sells for $65, and a kit for four its $75. Customers can also subscribe to the box of the month club.
If you don’t have a national following, start local
Katie Lee Collier, chef-owner of Katie’s Pizza and Pasta in St. Louis, decided to start local. That way, she could court her existing customers, and she didn’t have to deal with finding packaging that would keep pizza dough cold enough to ship across the country.
Collier launched her meal kit company, Vero Pizza and Pasta, in June and had 350 subscribers in three days. During launch week she and her family made personal deliveries. “We drove out, knocked on doors, delivered them and said thank you,” Collier said. “We wanted to tell them how much we appreciate them trying us out.” She switched to couriers after launch week and plans to start shipping out of town later in the year.
Get an e-commerce education
Make no mistake: Starting a meal kit delivery service means starting a new business, and an e-commerce business at that. So you’ll need to master new domains, such as SEO best practices for e-commerce sites and how to optimize the checkout experience. It has be easy to place orders on your website, and you’ll need to make sure those orders are tracked and delivered on time.
You’ll also need a way for customers to report problems and a process for addressing them quickly. Collier ticked off what she had to learn: “User experience, conversion rates, how to get your website in front of people,” she said, adding that she did everything from seeking out mentors to placing orders on meal kit websites to see how they worked.
Test, test, test
Are your cooking instructions simple enough for someone who’s kitchen-challenged to follow? How good do the simplified dishes look and taste?
When you start shipping out of town, will your packaging and delivery hold up — and deliver a good customer experience? Sillari spent six to eight months researching the best way to pack and ship ingredients with the proper insulation and ice pack.
“Do a lot of test shipments,” he said. “Ship it to you cousin, your sister, yourself. Put a thermometer in there and track the temperature.” Despite all that care, he said jars still get broken in transit and he has to send a replacement box.
Have a promotion plan
How are you going to get the word out about your new business? If you don’t have an advertising budget (and even if you do), promote the meal kits on your Facebook, Instagram and Twitter accounts. If you have an email list, send out a special discount for the first order. Tell your customers about your new service when they come in to the restaurant. Also go old school: Call your local news media (papers, magazines, TV and radio stations) and let them know about your new service.
“We’re new, so we haven’t started any paid advertising yet,” said Collier. “But we’ve got a ton of orders [through social media].” And she’s appeared on local TV and radio to talk about the launch.
Decide who’ll do what, and where
You’ll need to figure out staffing — you don’t want to take away from the restaurant while you launch a meal kit service. How much can you ask existing staff (or family) to do? What’s the point at which you would need to hire additional help? And where are the kits going to be prepped and assembled?
“We had a very busy restaurant, so it wasn’t feasible to do it there,” said Collier. “We didn’t invest too much money, but we built a modest fulfillment center so we could focus on the meal kits and not take anything away from the restaurant.”
Do your research and planning — then start
Listen to your customers to gauge their appetite for a meal kit service. Do your homework on packaging, etc., and create a budget. Then, if a meal kit delivery service still makes sense for your restaurant, go for it.
Both Collier and Sillari said they are constantly learning and tweaking their process. “I think people want to wait until they’ve developed the most perfect product with the most perfect branding,” Collier said. “That will take your entire life! Just go ahead and do it, and know that you’ll learn more than you will contemplating it.”