Restaurant meal kits are still flourishing, even out of lockdown

Jack Stein, chef-director of Rick Stein Restaurants, says the meal kits helped the company ultimately achieve pre-tax profits of almost £1m for the year to 3 January 2021 and have accounted for around one-third of revenue over the past year, which goes to prove meal kits are not just for lockdowns.

As with all food businesses in early 2020, the Rick Stein restaurants were closed, its chefs on furlough, and there was a growing need to use the business's available resources and generate much-needed revenues. The initial take-up of the kits came as a surprise to Stein.

"We never, ever thought it would work, but we had great feedback and reviews. We tested what price points would work and had a £100 lobster box for two and hake box at £40." Did customers want premium or value for money? "It was premium mostly, which was a problem as we needed so many lobsters. We were using 500kg a week at one point," he recalls.

Such take-up has undoubtedly given confidence to the likes of Michel Roux Jr, who recently launched two meal kits for the winter period, comprising a £100 ‘Gourmand' menu option for two alongside a ‘Classique' menu at £70.

The orders continue to flood in for Stein, who says at the peak of demand 10,000 to 12,000 boxes went out in one week, whereas this has now settled down to an equivalent of a still noteworthy 1,600 to 1,800 kits.

"We're 100% happy with that number as the restaurants have reopened. We've built the brand and we'll probably see spikes around occasions. We're also very seasonal in Cornwall, so when we are very quiet in winter this [low point] could dovetail with the meal kits," says Stein.

Key elements for meal kit success for the business included a new website developed pre-pandemic and prior experience of delivering large numbers of meals. Alongside this it was able to handle the logistics of kits – involving collating the various elements and packaging the goods ahead of delivery – and secondly a cuisine that is suited to meal kits.

"For our fish and chip shop we have a big [warehouse] unit holding bulk dry goods for servicing our high-volume sites. We rejigged an area of this for meal kits and used some of the kitchens for the preparation processes, such as handling the lobsters," Stein explains.

Curry in a hurry

It's a similar scenario for Kavi Thakrar, co-founder of Dishoom, which has also developed a dedicated facility for its meal kits, which have also been an incredible success. The unit, located in West London, has a team of chefs specifically focused on creating meal kits that include the company's iconic bacon naan roll, which was the – largely accidental – starting point for the kits.

"During lockdown I asked one of our chefs to send me some flour for making a naan at home. He instead sent me the dough. I had some bacon in the fridge and [what I created] I thought, it's amazing. It's a special way to have a special product at home and it's as close to the restaurant's breakfast as you can get," he says.

One of the pioneers of the meal kit also developed its initial offer from amateur-like experimentation. Thom Elliot, co-founder of Pizza Pilgrims, says: "We wanted a fun additional income stream on top of Deliveroo and my brother suggested we could send pizza ingredients through the post – and then host a video on Instagram to show people how to make the pizza. He sent me the first one through the post and it was a disaster – but after that we worked hard at it."

It clearly worked. "We were bowled over by the response – we hoped to sell 50 in the first week and we sold 1,200. It was quickly clear it was the perfect product for bringing a bit of joy to people cooking at home," says Elliot.

For Dishoom the range has certainly been very much expanded from the bacon naan, and the ‘Dishoom at Home' proposition now encompasses evening meal kits and family feasts along with a drinks range and the very successful chai sets. This has created a revenue stream that is sufficiently large to require a dedicated space. Keeping it in-house has also enabled the company to retain control over all aspects of the operation now that its restaurants have reopened.

"We could not do it out of our restaurant kitchens. We built a kitchen for this purpose with stores of ice packs and boxes for packaging. It takes a lot of room and time, but for us we wanted to do it in a high-quality way and to not do it away from our ‘world'. We want to control our Dishoom world," explains Thakrar. Elliot had the same thinking, saying the decision was made early on to do meal kits in-house: "We were learning everything we could about the product and the customer and so we felt owning the entire process end-to-end was the best way to go. There is a dedicated production kitchen for all the kits in south-east London. Pizza Pilgrims still does every element of the business in-house – from processing orders through to hand-making the dough and packaging the kits for delivery."

Business is booming

There is an alternative though, and it involves a third-party platform. This is the route Roux Jr has taken with his meal kits and also Gunpowder restaurants, with both partnering with Dishpatch, which handles the web hosting and all aspects of logistics for meal kit providers.

Harneet Baweja, owner of Gunpowder, says the arrangement works very well. "Since we reopened we can only do so much from our own infrastructure, so we work with Dishpatch. A percentage of the transaction goes to them, but we think it's a fair arrangement and we have no complaints."

With its modest resources Gunpowder keeps its meal kits at manageable volumes. The initial rack of lamb Baweja developed "caught us off guard" with demand. "For Christmas 2020, the January period and Valentine's we were doing lots of kits. For Christmas 2021 we did 100 festive stuffed chickens and they sold out in about 45 minutes."

The company has since launched Empire Biryani. Feedback via Dishpatch has prompted it to plan an alternative Sunday roast, comprising a whole stuffed Malabar chicken with sides. By having a very small offer the kitchen can handle the meal kit preparation alongside dealing with the restaurants' services: "We use our time appropriately. We do the prep early in the morning and when there are gaps in our restaurant service timings."

Gunpowder also benefits from the second important element critical to the success of meal kits – a suitable cuisine. Baweja says his menu is "not rocket science". For example, the rack of lamb kit simply involved customers marinating the meat and then grilling it. And he adds: "Don't forget chicken tikka masala is the second national dish [of the UK] so it's natural that our kits work!"

This simplicity is also evident in the meal kits at the Rick Stein business. "Our product is all about simplicity. We discovered this early on. People only want to do one or two things when they are cooking with the kits. It's like they are simply finishing the painting, and they are not having to buy the easel. Also, fish is difficult to source and people trust Rick in the same way people trust Hawksmoor with meat," says Stein.

Lobsters versus burgers

Meg Ellis, commercial director at Honest Burgers, agrees the proposition has to avoid any complexity for customers. She believes the market for meal kits has polarised to some extent, with very simple, affordable products working at one end – like Pizza Pilgrims and Dishoom – and the very occasional, fine dining kits – such as Hawksmoor and Rick Stein – appealing at the other end of the spectrum. "It's all about the type of cuisine, and its complexity along with travel-ability," she suggests.

Although Honest Burgers' meal kits was a break-even business – even on reduced volumes after lockdown ended and running out of a restaurant unit – Ellis says the need to redeploy employees around the restaurants for the full reopening in summer 2021 meant the kits operation was closed down.

"We knew we would make more money out of the core business than from the meal kits. It was not an easy decision, even if it was a financially good one," she says. However, the business still created burger kits for special occasions, such as a rosemary chip colcannon, a special patty and a can of Guinness for St Patrick's Day, which sold incredibly well.

"It was huge as it was so novel. It's therefore worth us looking at these sorts of offers. In a different time when the business is fully back on its feet, we'll be able to reconsider all options. We could run it out of our butchery business, but we don't need any distractions right now," she says.

Meal kits have not ticked all the boxes for Andrew Wong, owner of A Wong, either. He launched a meal kit for last year's Chinese New Year that included some of the chef's signature dishes and was priced at £165 for two on the StarChefs platform. However, the offer was discontinued after the initial launch as he has chosen to instead focus solely on the running of his two-Michelin-starred restaurant.

"So many people who focus on takeaway do it so well and to such a high standard. At A Wong we needed to focus on what's important to the restaurant and let the people who want to focus on takeaway shine," he explains.

In complete contrast, and at the more affordable end of the scale, is the experience of James Chant, founder of Matsudai Ramen. He says his proposition is incredibly well-suited to meal kits and he has built it up into a sustainable, standalone business.

After operating pop-ups in Cardiff he switched to using an unused kitchen to produce meal kits in lockdown and found an immediate audience. "Ramen travels badly and so does not work as a takeaway. It's a million times better as a kit. It's not as good as a restaurant, but a kit can be 95% of the way there in comparison," he suggests.

His management of the business has also been helped by the incredibly streamlined menu, which consists of only six dishes (with two vegan options) along with the occasional specials. "We know our limits," he says.

Assisting him with the financials is the fact Chant has created the business on a shoestring – using Shopify for the online storefront and only adding a third-party courier service when he took the decision to stop delivering himself locally and to go for nationwide coverage.

"I'd certainly not expected two years later to have a meal kits business," he says. "I did not think there would be any demand when restaurants reopened, but we now have more meals going out than even on a busy restaurant week previously. This January we've been busier than at Christmas."

Like Stein, he remains very surprised that meal kits have become a business in their own right. They would arguably never have appeared at all without the unwanted appearance of Covid-19 and the lockdowns it enforced upon the industry. A silver lining indeed.