If you’ve opened your browser or mailbox in the past year, chances are you’ve seen an advertisement for a meal-kit service like Blue Apron, HelloFresh, Home Chef, and others. These services offer an attractive alternative that overlaps with consumers’ evolving views about fresh, healthy, and convenient dining options. When these services first hit the market, we viewed them as largely no-moat companies that represented only minimal threat to our consumer coverage. However, after digging deeper and speaking with several executives from leading meal-kit delivery services, we believe these platforms and other subscription-based companies may be thawing consumer perceptions of online grocery and restaurant delivery services while offering new growth avenues for consumer packaged goods, or CPG, companies and online retailers.
Instead of viewing these services only as immediate threats to our grocery store, CPG, online retail, and restaurant coverage, as many investors have assumed, we believe they’ve played a part in changing consumer behavior that investors can’t ignore. We expect these services to play a big part in accelerating online grocery and CPG direct-to-consumer sales in the years to come.
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R.J. Hottovy does not own shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.