The Covid-19 Crisis has impacted many aspects of our lives. The meal kit industry is one that came of age, as confirmed by the sharp increase in value of the publicly traded meal kit companies over the past quarter. This article provides an overview of the packaging and regulatory overview of the meal kit industry from the packaging engineering point of view. As a conclusion, it suggests a holistic framework to optimize packaging strategy of home delivered meal kits.
Inc. Magazine, in March 2017 identified 150 meal kit companies in the U.S.1, and Time Magazine as of July 2017 put the global market at $2.2B2. The change in consumer habits brought on by the pandemic and the growth of other perishable food subscription businesses (e.g., wine, juice, cheese, ice cream, pet food, to name a few) confirm the continued rapid growth of temperature sensitive packaging for home delivery.
The challenge to get meal kits to the customer has been viewed as critical to the success of the industry. In an article in the Wall Street Journal published July 27, 2018 titled: “The Messy Business of Selling Meal Kits”, authors Haddon and Smith pointed out:
- “Companies that sprang up in garages or test kitchens are getting a close look at just how expensive and complicated it can be to deliver millions of boxes a month to customers’ homes or to supermarkets.”
- “Building a perishable-food business is not something you do quickly or lightly.” This is a quote from that same article by Don Barnett, Sun Basket Inc.’s chief operating officer.3
We believe that establishing a framework to collect more data on a holistic basis, in collaboration with suppliers, will facilitate continual improvements of cost effective and safe packaging practices.
Meal Kit Packaging 101
When innovators create successful new products and distribution practices, issues such as packaging and logistics costs, product and brand integrity and the regulatory framework remain foremost on the minds of packaging engineers. As one of the suppliers to this market (Cryopak provides gel packs, inner and outer packaging, and temperature monitoring solutions) we felt it would be helpful to review basic packaging requirements.
Requirements are packages of approximately 30 lb., including weight of packaging and refrigerants, for deliveries taking up to two days, (although more often next day) sent mostly to urban and suburban customers. Many customers receive several packages a month, therefore the perceived environment impact and ability to recycle through a local recycling program (blue box) are important. We recommend the attached consumer review which has insightful comments about consumer perception of various packaging solutions used by meal kit companies. Our understanding is that consumers do not seem to attach a relationship between freshness and packaging/logistics methods. As a result, packaging cost and ease of assembly are critical considerations.
- Packaging selection – A movement away from EPS (a.k.a., Styrofoam) is desired by many companies. Alternative liners like denim (Cryopak offers a version called Solversa) are popular – IF they provide the same performance as EPS. Addressing the sustainability issue is a primary concern, as the customers of these meal kit companies expect progressive solutions.
- Refrigerant – Maintaining temperature of your shipment is imperative. The most popular way to do this is in the form of gel packs. With sustainability, a primary concern is that the gel pack should be disposed of properly once used.
- Packaging Logistics – Getting the customer’s order from Point A (processing facility) to Point D (customer’s residence) requires Points B (component suppliers) and Point C (cold chain storage) to be able to scale up to meet the demands of a growing company.
- Cold Storage Logistics – Gels typically require three weeks to freeze. Other issues include impact on ambient humidity on gel packs, causing them to wick moisture, and when put into cold storage they may freeze together. Gel packs also need to freeze flat. Substantial dimensional variations can affect the ability to pack the box correctly.
Common Packaging Practices
Packaging becomes an important part of the brand identity of a perishable food brand delivered directly to the consumer. Deploying an effective packaging strategy requires balancing cost, performance, sustainability, marketing and branding, technology and quality systems, and regulatory elements. Let’s look at each of these:
Total Cost vs. Packaging Cost
Operating and updating a packaging supply chain involves a deep dive into understanding the costs that extend beyond the food cost and preparation. The total cost includes an accounting for, at a minimum, packaging materials, freezing, ergonomics (packing time), quality audits, waste, and customer complaints.
Packaging performance is better defined, in light of, the overall product delivery and operational strategies. More evolved packaging can include accounting for seasonality (packing for winter or summer months) or be universal (year-round use) will offer similar performance at lower costs. More importantly, segmenting packaging solutions to optimize total delivery costs by shipping lanes or product assortment may give substantial competitive advantages.
The focus now is on end of life. Broader sustainability strategy includes carbon footprint, reduction of material by design and waste reduction. There is a trade-off between recyclable, reusable, and the efficiency of local municipal “blue box” recycling programs.
Marketing & Brand Image – related to packaging
- Does the public have a perception that you are a leader on regulatory issues?
- Management of the internal components, if there is perceived waste.
- Product presentation can be impacted by internal condensation or leakage of refrigerant.
Issues such as packaging and logistics costs, product and brand integrity and the regulatory framework remain foremost on the minds of packaging engineers.
Digital technology is available to track shipments and can advise of excursions via phone apps (Cryopak offers many solutions, i.e., CTL – Contactless Temperature Logger) and may be used.
Regulatory Compliance and Quality Systems
A guidance document for Mail Order Food Companies (April 2018)4 prepared by the Mail Order Foods Committee 2016-2018 Conference for Food Protection provides a regulatory framework. This document contains additional references to relevant documents addressing temperature control requirements; pathogen growth risk; and sanitary transportation. This document indicates the need for “risk control plan or validation studies” and recommends an “external test lab to simulate worst case scenarios”. To the writers’ knowledge, the document does not document standards for testing, validation studies and responsibilities in the chain of custody between the manufacturer and the consumer. It does state that “when validation is not available, temperature checks are required on receipt”.
The Pharma industry has provided an important framework for thermal packaging development and qualification5. Several elements can be of value:
- Mapping of routes to characterize required packaging performance. This can be based on quantitative assessment of routes, and consideration for seasons and shipping methods.
- Test methods
- Quality systems used by the packaging manufacturer to ensure repeatable performance.
- Quality agreements for the various players in the chain of custody.
Below are links to Regulatory articles specific to the meal kit industry. One interesting note is that regulation on imports is quite strict, which should offer some protection for the industry.
Mail Order Food Safety – guidelines produced by the USDA6
The USDA Releases Guidelines for Meal Kits Containing Meat or Poultry7
Packaging Strategy: Food for Thought (pardon the pun)
It is our opinion, that the practice of using data analytics and lab testing is a good foundation to demonstrate robustness of packaging and shipping practices and shape the development of standards acceptable by regulators. The food distribution regulatory framework has been developed for in store pick up, i.e. regulating the chain of custody within the premises operated by industry practitioners. Suppliers of home delivered meals face the burden of maintaining product safety to the consumer’s kitchens.
Shape the safety debate with data. The industry has come of age and would greatly benefit from collecting more field and test data on logistics and packaging performance and its impact on product safety and freshness. Sound Product Integrity Practices are critical in protecting the value of a business to consumer brand. When done strategically, data collection and testing can often pay for itself in helping reduce waste, overpackaging and mitigate the risks to the integrity of your product and brand.
Shape the sustainability debate. Start a dialog with packaging material suppliers and municipalities to see how you can move the industry to a low cost, low carbon footprint. Advancements in packaging and performance data can improve the sustainability and cost benefits of solutions and can provide customized solutions optimized for different products and shipping lanes.
Control of total logistics and packaging cost as a percent of sales. The American consumer has an everwidening access to ready to cook options, as powerful players realize the value of this market. Mastering packaging and logistics costs while improving sustainability, freshness and safety attributes will enhance competitive advantages of meal kits and food subscription industry.
The development of standards is usually driven by industry leaders who believe that shaping standards allows them to gain the required flexibility to innovate. As the home delivered meal kit becomes an established consumer habit, we believe that establishing a framework to collect more data on a holistic basis, in collaboration with suppliers, will facilitate continual improvements of cost effective and safe packaging practices. Experience has shown that such a framework will become an important foundation for a long-term competitive advantage and a more stable regulatory environment.
Cryopak, a subsidiary of Integreon Global, is a cold chain solutions provider for the pharmaceutical, life sciences, biotech, and food industries. The company manufactures items for temperature-sensitive shipping needs, including insulated shipping containers, gel packs, phase change materials and temperature monitoring devices, and offers package design and testing services in its ISTA certified lab. Cryopak delivers superior products and service from an industry-leading team of experts whose primary goal is to ensure and protect product integrity. For more information visit www.cryopak.com.
About Integreon Global
The four companies that make up the pillars of Integreon Global are Cryopak, DDL, LaunchWorks and NexKemia. Each company alone offers a unique set of services that are critical components in our customer’s supply chain (cold chain packaging and temperature monitoring solutions, packaging, product and materials testing, contract manufacturing, and EPS resin manufacturing). Together, they provide complete end-to-end protection ensuring that the integrity of our clients’ products is maintained. For more information visit: www.integreonglobal.com.
- Martha Stewart New Meal Kit Partnership With Amazon Gives Users More Than Just Convenience https://www.inc.com/emilycanal/can-martha-stewart-and-amazonfresh-meal-kit-partnership-survive.html
- Why Meal Kits Haven’t Delivered a Cooking Revolution – Yet https://time.com/4863064/amazon-meal-kits-blueapron-cooking/
- The Messy Business of Selling Meal Kits https://www.wsj.com/articles/meal-kit-companies-scramble-to-dodgedisaster-1532700025
- Guidance document for Mail Order Food Companies http://www.foodprotect.org/media/site/cfp-mail-ordercommittee-draft-document-per-2018-iii-004.pdf
- PDA Technical Report No. 39, Revised 2007, (TR 39) Guidance for Temperature-Controlled Medicinal Products: Maintaining the Quality of Temperature-Sensitive Medicinal Products Through the Transportation Environment https://www.pda.org/bookstore/product-detail/4350-tr-39-guidance-for-temperature-controlled-medicina
- Mail Order Food Safety – guidelines produced by the USDA6 https://www.fsis.usda.gov/wps/portal/fsis/topics/foodsafety-education/get-answers/food-safety-fact-sheets/safe-food-handling/mail-order-food-safety/ct_index
- The USDA Releases Guidelines for Meal Kits Containing Meat or Poultry https://www.lexology.com/library/detail.aspx?g=9d4ddabb-5c47-44a7-a604-2a0798e4669a