Home Chef is a meal box delivery service that prepares and packages ingredients and instructions to make specific dishes. You can choose the day you want to receive the meal set and how often you want to order one. I learned of Home Chef at a startup event and tried it – below is my analysis of how Home Chef can improve its product and business.
Blue Apron VS HomeChef
While Blue Apron signs you up with a “mysterious” menu based on your dietary profile, HomeChef presents their menu and let you choose what dish you want to order. Blue Apron divides cooking profile into “vegan” and “meat” while with HomeChef, it is tailored to low calories, low carbs and what ingredients you don’t want. This is just extra information, because if you can choose by meal then you can decide what you want to eat. With both Blue Apron or HomeChef, you have to order in the week before the one you actually plan to cook.
The HomeChef Experience
Home Chef does not claim to provide organic ingredients so I assume that the materials it sent me to cook were not “Whole Foods” quality. I paid $9.99 for each meal (per person). $10 meal is on par with fast casual dining. For example, that could be a Burrito bowl at Chipotle (claims to be organic), a build your own pizza at Blaze Pizza ($8), or a plate (one side + 2 entrees) at Panda Express (~$8). All of these options spare me – the customer – the time cost of cooking.
For some reasons I expected that the ingredients would be organized in 3 separate packages but they were not. For a moment I freaked out: “So what are the ingredients for the Risotto and what are ingredients for my Burrito?”. After some time, I was able to figure things out. One of the promises of the delivered meal box experience is convenience: I don’t have to measure the ingredients for a recipe and I don’t have to buy more than the amount I need (no food wasted). However, this mental process of identifying components took away the convenience promised. That would take 3 more bags, or 3 more strings to separate the ingredients.
I checked the ingredients and was not so happy to see 1) the mushrooms are … distorted and not clean (see photo); 2) 4 out of 6 potatoes have dark spots (rotten spots), 3) my okras are broken and damaged (see photo). The ingredients were put in an insulated box, and for these types, it is fairly hard for them to be damaged during transportation. I blame this on long time sitting in stocking houses waiting to be delivered. This surprises me because I had to order the delivery one week in advance; that should give them enough time to figure out its logistics for on-time delivery and fresh ingredients. Home Chef could improve by grouping orders to suppliers to avoid waiting time for goods. If this were a quality problem from suppliers, Home Chef would need to sit down with suppliers to establish quality control processes with them.
A typical Home Chef customer profile:
- He/she must like cooking and have pretty solid skills in the kitchen.
Home Chef markets its products to beginner cooks. However, my husband is a beginner cook and he would be unable to make any dishes under its instruction. I imagine if a beginner cook uses Home Chef and expects to make the delicious meal advertised and instructed to him, he will be very disappointed in the outcome. Hence, I doubt that he will be encouraged to order again. This introduces a bigger problem considering its marketing strategy – discussed below.
- He/she must be affluent. $9.99/meal/person is pretty expensive compared to other fast casual options discussed above. Not to mention, there are frozen foods that take 15 minutes to prepare and cost $5 such as frozen pizza, popcorn shrimp, and burgers.
- He/she does not have time to go buy ingredients.
When I talked to a Home Chef executive, he said its revenue is looking at 2-3 million in 2015 which translates into roughly 420 orders/day (2 people/order). Totally possible! My question is how many of those orders are repeat orders? I received $30 (50%) off my first order with free delivery and this could be a large barrier to profitability.
I like cooking and don’t mind spending time cooking quality food at home rather than eating out (at the same price levels). I thought of a couple of things that would make me love Home Chef more:
- Organic ingredients: this could be done by a partnership with Whole Food or local farmers. This will also justify the price. If I can eat organic food at the same price at a restaurant, why bother cooking something that is not?
- Faster orders: Home Chef is serving 60% (mainly for the East Coast) of the country from Chicago. I wonder if I can get same day or next day delivery if I live in, for example, Chicago. When I first heard of Home Chef and wanted to order for that night, I found out I would be unable to try it until the following week. This was lost conversion and a loss in momentum. It would be interesting to trial same day or next day deliveries to take advantage of customer flow.
- Order Plan: it is hard to argue with the default setup that repeats the order weekly. However, I want to feel like I am in control of what I am getting. I do not want to feel like I am being tricked into commitment. After I make the order, I would like to be asked how I want to schedule my next deliveries: weekly, monthly or customized. Instead, this lack of transparency makes me feel uncomfortable and suspicious of the scheduling.