The explosion of the ‘kit economy’ and how you can be a part of it

The explosion of the ‘kit economy’ and how you can be a part of it
When Betty Crocker introduced its first cake mix in 1947, the company was sure it would be an instant success. Instead of spending hours making a cake from scratch, consumers only had to rip to the top off the Betty Crocker cake mix package, add water and bake. The research insight was that busy housewives were looking for time-saving devices and techniques. They were onto a winner.
But customers rejected the product. The management team at Betty Crocker’s parent company, General Mills, was perplexed. Why wasn’t the product selling?
After conducting more consumer research, the answer became clear — the mix made cake-baking too simple. There was no ‘pride of ownership’ in the cakes baked with the mix. They tasted great, but they weren’t ‘homemade.’ Part of the pleasure of presenting a homemade cake to your family was the knowledge that you’d done it yourself, and stirring mix and water together was clearly not enough.
The solution: General Mills modified the Betty Crocker cake mix recipe to require the addition of an egg. Sales of the cake mix soared.
This desirable combination of maximum feeling of accomplishment for minimal effort has seen the recent emergence and explosion of the home delivery meal kit industry.
If you’re not one of the estimated 1.6 million Australians that have tried home delivered meal kits such as Hello Fresh, Marley Spoon, Blue Apron or Dinnerly, here’s how it works: it’s a subscription-based service where you receive a weekly delivery of fresh food, packaged into complete kits of precise ingredients and easy step-by-step recipe cards. You simply open the box, choose a kit and within 20-30 minutes you’ve cooked a gourmet meal from scratch. It’s a virtually fool-proof result without the hassle, time and wastage associated with buying ingredients to cook dinner and without the feelings of ‘laziness guilt’ that comes from buying completely cooked meals. No matter how gourmet, there’s something about heating a meal in an oven or a microwave that feels like you’re cheating.
Hello Fresh, the biggest home delivery meal kit player globally, commenced operations in 2011 and is now estimated to be turning over $2 billion annually, $200 million of that in Australia.
I decided to try Hello Fresh soon after bringing my new baby Oliver home from hospital in July last year. I knew I would have zero time for grocery shopping and I also knew that the steady stream of home-cooked meals generously delivered by friends in the first week would soon run out and I would actually need to fend for myself. Hello Fresh was my prayers answered. I could still cook a decent meal with fresh ingredients but even when I was so sleep deprived I couldn’t think straight, Hello Fresh meant that I didn’t have to.
I initially thought my Hello Fresh experiment would last a few weeks … a month maybe. But the convenience of the cold Hello Fresh delivery with three meal kits for two each Tuesday morning became so addictive that here we are, over a year later, and I’m yet to cancel my subscription.
Like most people, I value convenience and simplicity more and more. Hello Fresh removes what would normally be a multitude of decisions about cooking dinner every night to just one – which of the three kits will I cook tonight? It makes life simple and saves me oodles of time.
It has got me thinking though, if the concept of a meal kit has resonated so strongly with consumers, how could this philosophy apply to other sectors? How could you save your customers’ time and deliver convenience en mass?
Could you tap your brand into the ‘kit’ economy and potentially repackage your products and services by occasion, need or benefit? Some examples might be:
  • a goal setting kit for clients of a financial planning firm including a book on goal setting, goal setting notepaper and motivational cards
  • a moving day kit of all the things you need to move house (I’m thinking some checklists, headache tablets, bottled water and a massage voucher).
  • A ‘preparing for your first half marathon’ kit with a training guide, towel, drink bottle, singlet, socks and shoe voucher’
  • A quarterly sample kit of beauty, fashion or health products or the ingredients for a home-made beauty remedy relevant to the season
  • A home inspiration design kit with everything you need to brainstorm ideas on your new home
You might even joint venture with other complimentary brands and businesses to produce complete kits that speak to a particular need, occasion or consumer segment — divorce, retirement, wedding preparation, weight loss, summer, winter … the opportunities are endless.
Start with your category or industry and brainstorm all the items that would ideally be in a kit.
Remember, Hello Fresh dispatched its first box in Australia just seven years ago and now the business is turning over $200 million annually.
Let me know what you come up with.

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