Will Unilever’s investment in an organic meal kit maker pay off?
Sun Basket, the meal kit service that delivers weekly recipes with organic ingredients, has just picked up a $9.2 million investment from Unilever’s venture capital business and other investors, according to a press release put out by the two companies.
The meal kit service has hired Bank of America and Jefferies Group to lead an initial public offering that could value the company at $1 billion, Bloomberg reports.
“We have been really impressed by Sun Basket’s extremely fast growth and category leading customer retention rates,” said Olivier Garel, head of Unilever Ventures, in a statement. “Over a relatively short period of time, Sun Basket has built a clear leadership position as the best healthy, organic meals service platform, addressing consumers’ growing demand for healthy, tasty, diet-specific but convenient solutions.”
Sun Basket intends to use the latest round of funding to help scale its business nationally. The service operates facilities on both coasts and in the Midwest and claims to have “the largest distribution footprint of any direct-to-consumer organic food distributor in the United States.”
Management is counting on Sun Basket’s unique positioning to differentiate from an increasingly crowded field that not only includes Blue Apron, HelloFresh and Home Chef, but newcomer services from Kroger, Publix and others. Market Force Information puts the number of companies now involved in meal kits at 150.
Blue Apron is the most popular service in Market Force’s report, tried by 39 percent of those surveyed. HelloFresh at 30 percent was second and Home Chef ranked third at 10 percent.
While more consumers are trying meal kit services, 76 percent that have tried them have stopped.
People attracted to these services point to added variety (51 percent), fun experience (47 percent), trying new ingredients (43 percent) and saving time (40 percent) as the four biggest factors in their decisions.
Those that stop cite poor value, portion size and prep time as the factors in their decisions to quit. Home Chef has the highest satisfaction rating and lowest amount of customer turnover, according to Market Force’s findings.
- Sun Basket
- Unilever Ventures Backs Sun Basket, Leading Series C-2 Funding – Sun Basket Inc./Unilever Ventures/PR Newswire
- Unilever Takes Stake in IPO-Bound Meal Kit Maker Sun Basket – Bloomberg
- New Market Force Information Study Finds Publix and Wegmans are America’s Favorite Grocery Stores – Market Force Information
DISCUSSION QUESTIONS: Do you think meal kits are a fad or are they here to stay? Do you think Unilever’s investment in Sun Basket will pay off?