Exploring the reorganization of the global food supply
Dr. Katherine Reilly and Adjua Akinwumi
There is no meal kit revolution happening just yet, but these services are already reshaping the food commodity chain. By acting as the middle man, these services are undermining a more profitable direct relationship between farmers and end-users.
In their marketing strategies, meal kit companies create a gloss of social justice to mask the larger reality of an unjust food system. It allows individual consumers to be self-congratulatory about their choices even as it distances consumers from food producers.
Using meal kit services as a point of entry, this article examines who has control over food algorithms in the data-led economy, and what the ramifications of a lack of control might be.
"Choose your meals. Unpack your box. Create magic."
So reads Blue Apron's website, a popular American meal kit company. Like many other similar services, Blue Apron is part of the rapidly growing subscription-based home food delivery model. These services deliver a recipe to your door, along with the pre-portioned ingredients needed to produce it, right down to tiny packages of herbs and tiny jars of sauce. All the recipient needs to do is assemble, cook and serve.
Wealthy urban individuals and families with busy schedules are the targeted consumers. The typical meal kit user is aged 18-44, lives in urban areas, and is wealthy. Men are slightly more likely than women to use a service of this kind. Marketing, therefore, attempts to charm consumers with the allure of health, family, convenience and sustainability. They offer young two-career families an idealistic return to cooking and eating together. And to the busy individual, meal kits present the opportunity to cook diverse, healthy, celebrity-inspired meals using local ingredients without ever making a trip to the grocery store.
Meal kit services micro-commodify everyday tasks, like shopping and meal planning
The meal kit industry was valued at $2.73 billion dollars in 2017 and has been projected to grow to about $8 billion by 2025. Despite global adoption of the model - with services ranging from DaGusto in Argentina and Daily Dish in South Africa, to Burgundy Box in India - the industry has its greatest presence in the United States. As early as 2016, one out of every four Americans had used a meal kit service (packaged facts, 2016). And North America accounts for about 45 percent of the global market.
Given all the hype surrounding the “meal kit revolution” you’d be forgiven for thinking that these companies are already successful. This has not necessarily been the case. For example, Blue Apron’s 2017 IPO was a complete flop that brought to mind turkeys rather than unicorns! Services like these put the livelihoods of small-scale agricultural producers at risk. So we need to examine what lies behind the rhetoric, and ask just how revolutionary this meal kit trend is. How is it reshaping the food industry, and what are the implications for social justice?
In the case of meal kits, recipes become both a marketing tool that organizes grocery acquisition, and also an algorithm (coded policy) that sets up the relationship between food producers, food sellers, and ultimate consumers.
A Food Revolution?
From TV dinners to taco kits to bake-at-home pizzas and pre-made salads, convenience foods have stocked European and North American grocery store shelves since the 1950s. Grocery stores also offer a range of partially prepared foods from pre-shredded carrots to pre-marinated meats. Organic farm-to-table vegetable delivery services are long-standing institutions in urban centres. Meanwhile, services like Rapi and Uber-Eats allow users to order meals from a range of local restaurants straight to their door. This has generated a new wave of delivery-only restaurant store-fronts that capitalize on small retail spaces to launch higher-end eateries. Against this backdrop, meal kit services seem to be more buzz than honey.
And yet, clearly, meal kit services see an opportunity to add value to the existing food service industry, perhaps in part by disrupting the existing commodity chain. They capitalize on micro-moments of commodification by privatizing the process of deciding what to make for dinner, and the work of chopping vegetables or measuring quantities. They also seek to create a new market segment that is more expensive and less time consuming than going to the grocery store, but cheaper, healthier and less burdensome than eating out.
This new market segment is emerging through an intensely competitive process. The clear market leader is German-based Hello Fresh, which controls over 30 percent of the US market and is projected to control 60 percent of the Canadian market by the end of 2019. But Hello Fresh faces grassroots competition from ethnic, organic or health-conscious local niche services, as well as direct, global competition from the likes of Blue Apron.
And there is the emergent competition from supermarkets, which are buying out smaller meal kit companies in a bid to maintain their dominance. This has triggered a race for market share characterized by aggressive marketing and promotional campaigns. Most meal-kit services offer a week’s worth of meals at cost or for free with no obligation as a way to promote their services.
It is also foreseeable that meal kit companies might extrapolate their current trajectory of platform innovation. Once the right infrastructure is in place, they could, for example, provide an online recipe builder that automatically generates a parcel of pre-portioned, pre-prepared ingredients, delivered straight to your door, ready to be prepared. Such a move is years away, but it could potentially position meal kit operators as key brokers along the last mile of the food commodity chain. (See this article for further discussion of possible trends in market consolidation.)
How Meal Kit Marketing Reorganizes Food Systems
It is difficult to predict the future of meal kit services, and how they will affect food commodity chains and logistics systems, but in this section we suggest some possible areas for attention (if not concern). In a hyper-competitive marketplace, identifying these concerns often requires peeling back the marketing and hype that shroud business practices.
In the meal-kit world, recipes are the ordering principle for how people buy their food. Of course, the food distribution system has long used recipes as a promotional tool. By showing home cooks how they might use a product, they make it more saleable. But in the case of meal kits, recipes become both a marketing tool that organizes grocery acquisition, and also an algorithm (coded policy) that sets up the relationship between food producers, food sellers, and ultimate consumers.
In the current highly competitive marketplace, meal kit services must work hard to produce eye-catching and flavorful recipes, at a profitable price point, that satisfy the demands of a very exacting culinary public. A common strategy is to highlight star ingredients that are exotic, come from local farmers, are organic, or reflect food trends. The meal-kit websites can then feature stories about food partners, and the specific products that they provide, which are positioned as (take your pick!) more wholesome, more exciting or more ethical than supermarket or fast food brands.
This is one of the main ways meal kits are reshaping the food commodity chain. Because they highlight specific ingredients each week, they must secure a source for enormous quantities of that ingredient at a specific time. They may contract to buy an entire crop from local farmers, who are asked to accept a lower price in exchange for a secure sale.
But by acting as a middle-man, meal kits undermine a more profitable direct relationship between farmers and end-users. As Barth writes, “Blue Apron and its ilk typically pay midway between wholesale and retail prices, which can seem like a king's ransom to anyone accustomed to dealing with wholesale distributors, yet very little to those who sell directly to consumers through farmers markets and CSAs [community supported agriculture initiatives].”
The farmer becomes vulnerable to the profit motives of meal-kit companies; once meal kit companies become more concerned with margins than with market share, they are liable to reduce their standards as well as their purchasing budgets.
Meanwhile, every special ingredient must be balanced out with cheaper fare, which might be tainted by factory farming or unfair labor practices . Such ingredients are obviously not the focus of marketing campaigns, but they should be the focus of food justice work.
The farmer becomes vulnerable to the profit motives of meal-kit companies; once meal kit companies become more concerned with margins than with market share, they are liable to reduce their standards as well as their purchasing budgets
All together, meal kit marketing creates a gloss of social justice to mask the larger reality of an unjust food system. This allows individual consumers to be self-congratulatory about their choices. But in truth, pre-preparation moves consumers one step further away from food producers. Where we once lamented the fact that inner-city children didn’t know where milk or apples came from, we will soon be lamenting the fact that they don’t know what an apple looks like, nor how to peel it!
Datafying Food Production
This situation is complicated by the drive, by international entities such as the World Economic Forum, to datafy the global food production and distribution system. The stated goal of datafication is to make food production more traceable. In practice, this means using sensors to control production processes, and attaching unique identifiers to products, so that they can be tracked as they move along the commodity chain from producer to end-user.
Datafication is billed as a means to optimize the food supply chain in order to reduce food waste and optimize distribution. This push is particularly oriented towards developing countries. More than 75 percent of agriculture and food technology investments happen in developed countries, despite the fact that 70 percent of global food production happens in developing countries.
This project is especially interesting in relation to processes of micro-commodification; datafication and tracking can make it cheaper and easier for factories to pre-prepare ingredients in amounts that service the meal-kit model. When we situate this in the context of meal kit services, we can see how datafication can facilitate micro-targeting of last-mile food sales.
Computerized fridges are becoming the intermediaries of food algorithms.
The meal kit company Plated has a machine learning team that scrutinizes the interaction between customers and the content on their website. The goal is an individual-level recommendation model that can present meal choices in ways that most appeal to individual consumers. We are but a few steps away from systems that can also predict our flavour preferences.
Since fridges that automatically order groceries are already a reality, meal kit companies will be well positioned to stock them with pre-prepared ingredients, ready to be used in pre-selected recipes. A three-meal a week subscription plan could then become a weekly grocery subscription, all delivered in pre-prepared, and pre-portioned components. Those components each incorporate the micro-commodification of knowledge and labor, so they command a higher margin than their less-processed analogues.
Global Implications for Local Farmers
At the global level, these transformations, geared to the busy, urban, upper middle class, are billed as welcome innovations that will make our lives better while better managing the natural environment. But in truth, they have important implications for local farmers and food processors, who are often located in rural communities in the global south. They set the stage for new forms of digital inequality and exclusion and raise significant new questions about digital rights.
In particular, the predictive power of the emerging model threatens new forms of determinism for agricultural practices. Once companies ascertain demand for certain products or produce, and the format they would like it in, this will shape their contracts with farmers, who will be beholden to certain standards for production. Meanwhile, the entire industry is shaped by global investment patterns and regulations, which allow factors like ‘investor confidence’ or overconfident valuations to condition the livelihoods of small producers.
More than 75 percent of agriculture and food technology investments happen in developed countries, despite the fact that 70 percent of global food production happens in developing countries.
The global adoption of these technologies and investment strategies raises concerns about control. Who has control over food algorithms, and what are the ramifications for those who do not? What do these new systemic rules of food production, distribution and consumption mean for access to nutrition, cultures around food preparation and eating, and techniques for farming or cooking?
Whatever the answers to these questions, one thing is sure: for those on the global edges of the food supply system, the future of empowerment lies in controlling how their product is datafied, and how it is represented in the recipes that shape home cooking, food consumption and future production processes. It also lies in new regulations around investment financing at the global level which recalibrate risk to incentivize more responsible large-scale investing, and better protect small-scale producers.