Can Meal Kits Keep Us Connected to Restaurants, and Each Other?

COVID-19 , Industry News , Technology & Innovation ,

Source: Grub Street

Once a year, Cathleen Nguyen books a flight from Dallas to New York City to eat her way through a checklist of her favorite restaurants. High on the itinerary is Xi’an Famous Foods, the small chain that specializes in fresh, chewy noodles, hand-ripped before customers’ eyes, slathered in a spicy, tingly sauce of soy, garlic, vinegar, and chili oil, and then finally tossed over a heap of tender meat, with scallions, celery, and cabbage. When the pandemic hit, her 2020 trip was canceled.

But Xi’an is one of many restaurants that are adapting their businesses by offering at-home “meal kits,” effectively carving out a new corner in the restaurant market. In doing so, they help their fans stay connected to the food of their favorite restaurants. And, surprisingly, help to foster social-media communities of like-minded cooks, all attempting to re-create amazing restaurant meals at home.

Meal kits are not a new concept, but with a history of waning sales and low customer retention, they are a dubious one. However, now, some of the same people who previously unsubscribed from traditional meal-kit services — citing “boring” recipes, environmental “waste,” and overall “inconvenience” — have comparatively more positive things to say about their restaurant meal-kit experiences.

“It was actually really fun to pull the noodles,” says Nguyen, who ordered Xi’an’s kit online for delivery to Texas. The process of making the noodles was trial and error at first: “I took the two ends of the dough, and stretched it out really hard, and the whole thing just broke in half.” But she eventually mastered the technique, and the final dish “tasted just like the noodles in the restaurant.” She hasn’t reordered the meal kit yet, but she thinks it would be great for small get-togethers with friends.

At a time when it feels like everyone is collectively holding their breath, restaurant meal kits provide diners with some semblance of life as it used to be. For restaurant owners, chefs, and workers, however, meal kits are less an optimistic prediction for the future and more like the latest evidence of an industry that’s hanging on for dear life.

“We’ve tried approximately 400 different things during [the pandemic],” entrepreneur and Champagne expert Ariel Arce admits to me with a dry laugh when I ask her how the decision to offer caviar-sandwich kits through her restaurant Niche Niche came about.

In addition to sandwiches, her other ventures Tokyo Record Bar and Air’s Champagne Parlor have offered omakase bento boxes, wine boxes, sake pairings, and multiple combinations of caviar-and-snack kits with fun themes like “Keep it Sexy” and “Feeling Fancy.” The diverse array of offerings highlight Arce’s ability to keep the curated spirit of her businesses alive in spite of quarantine. But, as she points out: “When you’re a creative person, and you’re doing everything you can to make it from one day to the next, you’re not doing it for pleasure. You’re doing it for survival.”

The creativity of the restaurant industry has been arguably the only redeeming feature of the pandemic. But nine months ago, most chefs and business owners said meal kits were the furthest things from their minds. “If it wasn’t for this pandemic, I don’t think we would’ve ever considered offering meal kits,” says Hooni Kim, whose Korean restaurant Hanjan offers “heat and serve” meal kits in lieu of indoor dining or takeout. “It’s the ego of the chef where the food that we create, we design — it’s best when we finish it. The seasoning, the temperature, the texture — all of that. We want to be in control.”

The day-to-day operations of running a restaurant leave little room for extracurricular ideation, but some are better positioned to pivot to meal kits than others. “You 100 percent have to acknowledge your privilege,” says the chef Marcus Samuelsson of Red Rooster in Harlem, referencing his restaurant’s built-in fanbase, which affords him the ability to send meal kits across the country. “The vast majority of restaurants cannot do that.”

Celebrity aside, the fixed costs of labor, storage, and shipping meal kits pose a massive hurdle, especially during a pandemic when money is already tight. In the case of Xi’an, the restaurant was already equipped with 20,000 square feet of storage space, including walk-in fridges, says the franchise’s CEO, James Wang, but he points out that most New York City restaurants don’t have that luxury. Shipping materials cost $8 to $10 per meal kit, he adds, not including the Next Day Air shipping fee, which is necessary to ensure food stays fresh. While a noodle dish at one of Xi’an’s brick-and-mortar locations costs around $7 per bowl, a noodle kit for four people costs $79. Xi’an has a “cheap eats” reputation, but meal-kit delivery necessitates a higher price point that ultimately caters to wealthier clientele.

It’s precisely these added costs that influenced William Garfield’s decision to keep meal-kit delivery in-house at his Brooklyn restaurant Mo’s Original. High commission rates, coupled with an increasingly “inundated” market, made a partnership with a nationwide operator like Goldbelly seem less viable. Garfield adds that other third-party services like Uber and Caviar introduce customer-relations problems, like drivers losing people’s food orders, which could do more harm than good.

The irony of meal kits is that the pandemic necessitated their uprise while also making it difficult to gauge their profitability. Big-name restaurants like Xi’an, Scarpetta, and Red Rooster estimate that meal-kit sales make up around 5 percent of their total revenue. Before indoor dining returned, William says that 70 percent of the revenue at Mo’s Original came from meal kits, which he credits to neighborhood locals who rallied to support the business. Meanwhile, Erkan Erme, the founder of Kotti The Berliner Döner Kebab told me meal-kit sales exceeded the store income by 110 percent for the first time. Russ & Daughters, which has 50 years of experience mailing brunch packages, has seen a 400 percent surge in shipping sales since the pandemic hit.

Although meal kits have become a recognizable fixture of the culinary landscape, they’re not the industry’s saving grace. “The reason I’m in Korea right now is because I haven’t gotten a paycheck from either of my restaurants since March,” says Kim, who’s filming a TV show abroad to make mortgage payments and ensure his staff is taken care of. He puts as much as $3,000 a week into his restaurants, and he knows other chefs who are funneling even more. “As a business owner, you think of growing your business,” Kim says. “You think of making more money. You think of making a better product. It’s never been about hanging on by your fingertips.”

If there’s one thing unanimously liked about meal kits it’s that they provide some measure of human connection that’s sorely lacking in the food world. “I have a whole collection of people’s videos of themselves pulling noodles, making the dishes at home, and enjoying it with their family,” Wang says. “It warms the heart to see that.” Xi’an even assembled the amateur videos into a hand-pulled-noodle supercut. Meanwhile, Eleven Madison Park chef Daniel Humm has recently been using his Instagram Stories to highlight home cooks recreating his restaurant’s foie-gras-stuffed roasted chicken, blasting their attempts out to his 400,000 followers.

To some degree, Kim says he has learned to enjoy relinquishing control, “passing on the baton to customers,” who enjoy making his dishes at home. What he misses even more than cooking is seeing and hearing from his customers beyond the digital divide of phone and computer screens.

“The growth in receiving food by mail will continue, but I also think people are starved to get back into restaurants, “ predicts Josh Russ Tupper, a co-owner of Russ & Daughters. The experience, the community, the interaction — it’s an important part of people’s lives.”

Read the article at Grub Street here.