Crafty and Creative D2C Food Businesses Chip Away at Grocer’s Holiday Haul

Consumers may continue to shop for the staples of their holiday meal from their go-to grocers and food producers, but meal kit companies and other direct-to-consumer (D2C) food companies have the opportunity to gain share of stomach when it comes to the smattering of side dishes expected at every festive gathering.

“Our side dishes have done really well over the holidays,” Audrey Fisher, head of marketing and growth at meal kit company Marley Spoon, told PYMNTS in an interview. “We found that turkeys, for example, don’t do as well as a side dish and that they’re much more operationally complex, so we don’t sell turkeys anymore, but we do sell the sides that go with the turkey—everything but the turkey.”

Fisher cited the example of baking kits for cookies, which performed well with subscribers during the holiday season. This week, the company’s menu includes a holiday charcuterie board and a Thanksgiving shepherd’s pie.

While Marley Spoon may have noticed that customers are not especially interested in turning to meal kit providers for their main courses, other meal kit companies are still aiming to capture that full-meal spending. Blue Apron’s Thanksgiving box, for instance, includes turkey breast in addition to side dishes, as does Kroger subsidiary Home Chef’s Turkey Breast Roast. For consumers looking to have the meat-carving experience, however, it makes sense that these piecemeal offerings may not meet the holiday needs of many hosts.

Additionally, there is another opportunity for D2C brands to gain share of stomach this holiday season: capturing sales that would otherwise have gone to restaurants. Meal kits may be more costly than getting those same items piecemeal from the grocery store, but they are less expensive for their quality than dining out, offering them the chance to attract consumers who would like meaningful culinary experiences but who are wary of their spending.

Indeed, research from PYMNTS’ study “New Reality Check: The Paycheck-to-Paycheck Report — The Holiday Shopping Edition,” created in collaboration with LendingClub, found that dining out is the indulgence that consumers are most ready to cut back on. Specifically, 29% of consumers will spend less on restaurant purchases this season than they did last year, a greater share than said the same of any other kind of purchase.

For holiday-specific meals, however, home cooking remains the norm. With many home cooks looking to simplify the process of preparing food for large gatherings, meal kit providers and other meal solutions can leverage their promise of convenience to drive sales, partially offsetting the softness that these companies often see during the season.

“Times when customers are traveling or maybe have traditions with their family, you actually see sales in meal kit subscriptions pull back slightly,” Fisher said. “The best times for our business are really the beginning of the year, and then that back-to-school period that we just finished up in Q3, but seasonality dictates that Thanksgiving, Christmas and New Year’s are, generally speaking, a slower time for the subscription meal kit business.”