Key Takeaways: Offering a variety of menu choices and catering to dietary concerns can help to attract a larger clientele. Forming ties with neighborhood farmers and vendors may help you find high-quality, fresh products for your meal packages. An easy-to-use ordering system available on your website and mobile app will help you draw in and keep clients. You may set your business apart from rivals by offering flexible delivery alternatives like same-day or next-day delivery. Starting a new meal prep business is not only limited to serving hot food to its localities, but it could help you double your income as well. That’s right because the revenue of the meal kit industry is projected to reach 20.65 billion U.S. dollars by 2029. But what about food buyers? They too would become a part of entire meal prep businesses due to these factors: To order a hot-served meal from favorite cuisine Not having much time to buy extra groceries To refrain from cooking food at home Now, you may wonder, how will you operate a meal delivery business? Would you handle multiple order deliveries at the same time? Will you be able to manage food delivery drivers? For answers, let us understand how to start meal kit delivery business, its challenges, and solutions. Forget Spaghetti Routes, Optimize Routes for Your Entire Team with Upper Start a 7-Day Free Trial Table of Contents What is a Meal Kit? How to Start a Meal Prep Business? Business Model: Meal Kit Delivery What is the Cost of Starting a Meal Kit Delivery Service Business? Challenges in Meal Kit Business Benefits of Meal Kit Business How Upper Route Planner Helps Your Meal Kit Delivery Business? FAQs Choose Upper to Boost Your Meal Prep Food Deliveries What is a Meal Kit? A meal kit is a subscription basis service where a company sends their customers a small box consisting of half-cooked food, pre-prepared ingredients, and pre-portioned ingredients along with the recipe card attached to the top of it. Also, you may get fresh ingredients like pieces of vegetables and fruits to assemble and prepare a hot meal. Ordering meal kits from an online meal prep business will save your kitchen time and help you prepare hot food with fewer ingredients. Meal kit delivery is usually preferred by young consumers working away from home in order to eat delicious home-cooked meals. And so they order meal kits from an online meal prep company instead of going out to stores for grocery shopping. How does a meal kit delivery business work? Nowadays, every food delivery business offers meal kit subscriptions for customers to avail of weekly or monthly online meal kit delivery at discounted prices. While ordering the food, you can select any feasible option from the menus and pay accordingly to confirm your order. Now, let us study a real-life example of HelloFresh. HelloFresh is one of the leading online meal kit delivery service providers that lures new customers by launching new offers and loyalty programs. However, it charges extra for delivery, up to $8, which could impact the customer experience. If you are a new user, it will give you a discount of -$22, plus five recipes for two people. Then, you can select your choice from the menu, such as veggies or low-calorie options, before confirming an order. Ultimately, it may cost you about $68 for your first online order—definitely a smart business move to attract new customers. How to Start a Meal Prep Business? Let us understand how to launch a meal delivery service in 8 easy and effective steps. Step 1: Create a business plan Before starting any service business, it is mandatory to curate a detailed business plan. Creating a business plan enables you to schedule tasks at different time intervals. From surveying your competitors and tracking food delivery trends to managing your revenue, you can plan every action. Here is the list of tasks you must include in your meal kit business plan: Study your competitors Create a weekly menu Decide your target market Create a budget Adopting marketing strategy Hire staff Buy equipment and rent a workspace Step 2: Arrange finances and make investments Opening a business isn’t possible without making necessary investments. Firstly, you will need sufficient funding to make basic investments to establish and successfully run a meal kit business. Investments made in a proper way and smartly managing the resources can turn your business highly profitable. Here’s a list of some investments you must consider while establishing a meal prep business: Buying cutlery and utensils Rent of workplace or commercial kitchen Ingredient inventory cost Food service license cost Packaging cost Employees’ salary Supplies’ cost Transportation cost Vehicle maintenance Advertising costs Other business operation costs Step 3: Apply for a food service license First of all, you need to apply for a business license and a food handler’s license, both of which are essential for operating within the food industry. You can get a catering license from the online web portal. Thereafter, local officials will visit your meal prep workspace. Step 4: Know your competitors Competitors are the ones who may inspire you to develop a business idea for launching a meal kit business. So, you should closely watch how they are performing in the meal kit delivery services market. Such techniques will help you to create a business model and find out business requirements. So, knowing your competitors is important to stay on top in the meal kit delivery market. Step 5: Set up SOP Once you are ready to explore a meal plan, set up business structures by creating a standard working procedure (SOP). By doing so, it will be easier to manage the shift timings of drivers and customer service teams. This step will help you to perform timely deliveries. Also, you can get the right delivery management software to improve delivery efficiency. Step 6: Contact the meal packaging supplier In the next step, you should reach out to convenience services operators and those who provide meal packaging supplies for smooth food service operations. And so, you should get in touch with portion packaging suppliers to get containers in bulk demand. Step 7: Introduce your own food delivery app To become a customer’s first pick for meal kit delivery service, as a business owner, you should come up with a well-developed demand delivery app or meal prep website. It will help mobile users quickly browse your weekly menu to place an order. Therefore, you should assemble the development team to build a feature-rich delivery app. Step 8: Use marketing strategies Launching a mobile application is not enough, as you will need the best minds for marketing. So, you can hire an SEO executive or business analyst to create a content marketing plan. SEO executives guide you to create future-focused content that can push your website to the top of the Google search results. To enhance your marketing efforts further, consider reading our marketing ideas for food delivery businesses for additional strategies. Otherwise, do offline marketing by posting an advertisement in the newspaper. The offline and digital marketing team would help you attract desired customers and carry out a successful business operation. Streamline Your Meal Kit Delivery Business Using Upper Perform mealkit deliveries using Upper-made best routes to reach your destination on time, minimizing food waste. Let Upper be your smart companion throughout the delivery process. Join Upper Business Model: Meal Kit Delivery Nowadays, you can find every service online, and the meal kit delivery service business has joined the drill. Meal kit delivery is a significant business model because it allows you to deliver partially prepared food directly to customers. Meal kit businesses are becoming an increasingly popular way for consumers to enjoy gourmet foods at home. Meal kits are sold by companies that specialize in meal preparation and delivery, including Blue Apron and Hello Fresh. These companies offer monthly subscriptions for home cooking ingredients, which include recipes and instructions for preparing the food. For example, Blue Apron sells its subscribers a box of ingredients that includes recipes for lasagna, steak fajitas and chicken pesto pasta. The company provides detailed instructions on how to prepare each dish, along with serving suggestions for each recipe. Meal kit services help improve restaurant sales by making meal preparation easier than ever before. Consumers can order their favorite meals from their favorite restaurants without having to leave home or visit the grocery store. What is the Cost of Starting a Meal Kit Delivery Service Business? The starting cost for a meal prep delivery business will be anywhere between $20,000 and $30,000. However, it depends on factors like business scale, owning a ghost kitchen, office space lease, and delivery team size. At the start of your new business venture, you will need to have an operational budget in place so that you can begin making money as soon as possible. This means that you need to know your monthly costs and how much money you are going to make from each venture. The following are some of the most important things that you need to take into account when creating your budget: Mortgage or rent payments: You will need to pay off any debts or mortgages that may be holding you back from starting up a successful business. If you own property or have any other financial obligations, such as student loans or credit card debt, then paying them off before starting up your new venture is essential. Paying salaries to teams: You will have a number of employees working for you. So, as meal kit business owners, you are liable to pay them on time. So, you must count salaries, as it holds a major significance for the initial costs. Challenges in Meal Kit Business Below are the main challenges you may come across as a new owner of a meal kit business. 1. Customers using service for 1-2 weeks Since you are new to the meal kit delivery market, there are strong chances that meal kit buyers may order food online and never come to avail of your service again. Most people may buy a meal kit subscription plan and might not use it for a long time. 2. To convert new customers into repeat buyers Discounted offers for online meal prep service may only work for first-time customers who may not appear again on your platform. This could be possible due to meal prices, expensive subscription plans, a lack of essential features, or late deliveries. Therefore, you must figure out how to increase customer retention rate. 3. Inefficiency due to poorly planned routes The food delivery business may take a hit if your delivery team is wasting more time on the road rather than delivering food quickly. And for that, you may have poorly planned routes to blame. Such issues may adversely affect delivery efficiency and financial plans. However, refer to our extensive guide for more information on streamlining your food delivery process and resolving these challenges. Benefits of Meal Kit Business There are a number of benefits to starting a meal kit business. Below we have listed and described a few benefits of starting up a meal prep business. 1. Obtain more customers Meal kits allow you to target specific customers with your product. For example, if you’re selling healthy meals, you might have a unique product that appeals to that particular demographic. This can help you gain new customers who may not have tried your food meals before. 2. Save time and money If you’re able to market your meal kits effectively and deliver them on time, it’s likely that you’ll be able to save both time and money by not having to prepare meals from scratch every day or week. You’ll also be able to save on food costs since most of your ingredients will already be packaged in prepackaged containers ready for consumption straight out of the box! 3. Build brand recognition and loyalty You could establish your brand identity among consumers who appreciate eating healthier foods without sacrificing taste or quality. Meal kits allow consumers to eat better without feeling deprived because they can buy their favorite foods in pre-portioned portions that look appealing and taste delicious! TIP: Are you curious about launching a food delivery business? Check out our detailed guide on how to start a food delivery business to get valuable insights and tips. How Upper Route Planner Help Your Meal Kit Delivery Business? Using an Upper route optimizer for food delivery is like putting a cherry on top of the cake. The reason why it is said is that an online route planner brings you multiple benefits for your meal prep business. Here is how the online route generator assists you in performing meal kit delivery service. Upper makes sure you don’t waste more time planning routes and lets you create the most cost-effective routes in a few clicks with meal kit delivery route planning software. With Upper, you are most likely to deliver the hot-served meal in less than the expected time. Upper route planner optimizes all the stops and curates an optimized route, and following it will make you deliver more food orders in busy work hours also. Upper allows you to fetch the exact address of the location along with a detailed street view. With Upper, you can add up to 500 stops at once. So, you don’t need to figure out a route after every delivery. Upper keeps customers informed with personalized automated updates. After the successful meal delivery, Upper allows the delivery person to capture proof of delivery. Upper Route Planner A simple-to-use route planner that every one is talking about Start Your Free Trial FAQ What are the necessary points to set up a meal kit business plan? Below are the points to be considered for developing a meal prep delivery business plan. An affordable working space Necessary certificates from the local administration A valid license from the food & drug control department Collaboration with popular restaurants Delivery management software Is the meal prep business profitable? Yes, the global meal kit delivery service is valued at over USD $10 billion. And therefore, meal kit companies’ share of the market is likely to increase. Hence, you may achieve desired business profits. Who is the target audience for the meal kit delivery industry? Young consumers, especially college students or working professionals, are the main target of the meal prep industry. What is a meal kit delivery service? It is the process to deliver meal kits from a food delivery company to the buyer’s location. Meal kit delivery services offer fully meal-prepared dishes to be delivered at the customer’s doorstep. Choose Upper to Boost Your Meal Prep Food Deliveries Once your meal prep business is up and running, optimizing your delivery operations becomes crucial. Upper Route Planner is here to streamline your process, allowing you to plan, optimize, and dispatch routes with just a click. With Upper, you ensure your drivers maximize their efficiency, avoiding delays that could compromise food quality and customer satisfaction. Sign up for a free trial of Upper today and see how it can transform your meal prep business. Author Bio Rakesh Patel Rakesh Patel, author of two defining books on reverse geotagging, is a trusted authority in routing and logistics. His innovative solutions at Upper Route Planner have simplified logistics for businesses across the board. A thought leader in the field, Rakesh's insights are shaping the future of modern-day logistics, making him your go-to expert for all things route optimization. Read more. Share this post: Tired of Manual Routing?Automate routing, cut down on planning time, dispatch drivers, collect proof of delivery, send customer notifications and elevate your team’s productivity.Unlock Simpler Routing