Western Grower & Shipper 2018 11Nov-Dec

Plant-Forward Concept Drives Meal Kit Firm

By Tim Linden T he philosophy that drives menu decisions for Sun Basket, one of the top three meal kit firms in a crowded field, appears to be a perfect fit for produce suppliers. Produce industry veteran Don Barnett, who is the company’s chief operating officer, recently told Western Grower &Shipper that from the very beginning Sun Basket’s point of differentiation has been its focus on creating healthy meals for its customers. He said the competition focuses on convenience while Sun Basket has centered on creating meals that are “healthy and delicious.” At the beginning, what Barnett called Sun Basket 1.0, the company offered a handful of different menus that featured low sodium, no saturated fats and low calorie items. It is now well into Sun Basket 2.0 with 10 different menu classification, including paleo, vegetarian, pescetarian, Mediterranean and gluten free. The company is growing at a very fast pace with customers all over the United States and three distribution centers to serve them. “We cover 98.6 percent of the zip codes in the country,” Barnett said.

He equates the company’s current produce buying size as that of a 150-store chain. They are not yet as big as the huge retailers in this country but Barnett has no doubt that the home-delivery meal kit industry will grow far beyond the tiny percentage it currently holds. Several years ago, the food marketing system, including foodservice and retail, was estimated at $1.5 trillion. Earlier this year, an online story on “Recode” estimated the current size of the American meal kit market at $5 billion. Barnett believes meal kits companies are disrupting food marketing in much the way Amazon disrupted book sales and a plethora of companies altered the apparel and office supply sectors. Twenty years into the book disruption equation, about 50 percent of books are now sold on line. Online office supplies have a similar growth curve. Online apparel sales started to take off a decade ago and already have a 20 percent market share. The Sun Basket executive predicts that the meal kit business will approach 15-20 percent market share in the next 10 years. He noted that 15 percent of $1.5 trillion ($225 billion) is a lot of business. Currently, Hello Chef

and Blue Apron are one and two in the industry (neither responded to requests for an interview), followed by Sun Basket. Barnett says those two companies rely on the convenience factor to attract, acquire and keep customers. He believes Sun Basket’s approach is more sustainable and will win out in the long run. “We are both a food company and a technology company,” he said. “You can’t be one or the other in this business, you have to be both.” As a food company specializing in meal kits, Sun Basket has built the infrastructure, including a

16   Western Grower & Shipper | www.wga.com   NOVEMBER | DECEMBER 2018

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