Direct-to-consumer eCommerce subscription services have been on the rise. Even before Covid-19 changed the everyday shopping experience, consumers had been signing up to receive automatic deliveries of everything from pet toys to wine. With new buying habits now firmly in place, eCommerce subscriptions are only growing in popularity. In fact, the Subscription Trade Association (SUBTA) predicts that by 2023, 75% of DTC eCommerce brands will offer subscription services.
Food delivery subscription services in particular saw growth in 2020 with a 25% increase in new subscriptions. These DTC subscription services offered an easy and reliable alternative to in-person grocery shopping during pandemic-related lockdowns. Also, as consumers became more health-conscious during the pandemic, pre-prepared meal kits offered people a healthier alternative to ordering out.
Along with convenience and safety, consumers are increasingly conscientious of their carbon footprints and seek to do business with eco-friendly brands and companies. Food and meal eCommerce subscription services fit this bill by helping to reduce the growing problem of food waste.
The Rotten Facts About U.S. Food Waste
Each year, 108 billion pounds of food is wasted in the United States. That equates to more than $161 billion worth of food thrown away each year. Food waste makes up the majority of waste that ends up in a landfill. There is more food waste in landfills than plastic or paper waste. Nearly 40% of all food in America is wasted, the majority coming from spoilage in homes and restaurants. The contrast between such a large percentage of wasted food and the fact that 42 million Americans may experience hunger in 2021 is stark.
On a broader ecological scale, food waste packs a huge environmental punch. When food rots in a landfill, it produces methane — a greenhouse gas — that is at least 28 times as potent as carbon dioxide. In fact, wasted food is responsible for 6% of global greenhouse gas emissions.
In addition, the resources used in food production also have an impact on the environment. Growing food that goes to waste currently uses 21% of America’s fresh water, 19% of fertilizer and takes up 18% of cropland.
The DTC eCommerce Subscription Solution
The alarming impact of food waste on the planet draws many consumers to subscription services that claim environmental responsibility as a core principle. The two most popular types of automatic food delivery services are meal kits and “ugly” food box subscriptions.
Meal kits come in two varieties – cook-and-eat or heat-and-eat. Cook-and-eat companies like Hello Fresh, Blue Apron and Home Chef let customers select meals they want to eat and how many people will be eating. The company then sends pre-portioned raw ingredients and a recipe card and the customer cooks the meals at home.
Heat-and-eat companies like Freshly let customers select pre-cooked meals that are shipped to the customer’s home. Customers then heat the meals in the microwave – no chopping or sauteing required.
The Eco-Benefits of DTC Meal Subscription Service
Besides being convenient, reliable and healthy, DTC meal kit services are eco-friendly. By delivering exactly proportioned meals, subscription services help reduce food waste by ensuring only minimal amounts of leftover food or ingredients go bad or get thrown away. In fact, a 2017 University of Texas Austin study found that meal kit services used 20% less energy and generated 4% less emissions than grocery store meals. Critics point out that energy and emissions savings may be offset by the increased plastic waste generated from ingredients and kit packaging.
The Dirt About “Ugly” Foods
In addition to meal kits, consumers can subscribe to receive shipments of produce and other food that otherwise would be thrown away. Between 11 and 16% of all U.S. food waste comes from “imperfect” or “ugly” foods. These are foods that don’t meet buyer and retail specifications, usually because of how the food looks. In fact, 20% of farm-fresh produce gets thrown out annually. Imperfect foods are considered unsellable for three main reasons:
- They have external cosmetic damage
- They represent excess inventory
- They are lacking in demand or are undervalued
But the fact that they are considered damaged goods does not mean they are not edible. Misshapen or discolored produce may not be sellable in retail grocery stores, but the food tastes the same and has the same nutrition as its more uniform, attractive counterparts.
DTC Subscription Services Step up to Stop Food Waste
A number of DTC eCommerce subscription services help reduce food waste by focusing specifically on selling ugly food. Online subscription services like Imperfect Foods, Misfits Market and Hungry Harvest deliver seasonal, cosmetically imperfect, surplus produce at affordable prices.
The concept behind imperfect food subscription services is simple. The company sources unsellable produce from farmers and sells it directly to consumers. Farmers and producers benefit from having an additional sales channel for products that grocers might otherwise reject. The subscription services take care of fulfilling, shipping and delivering the ugly food to customers’ doors.
The environmental results speak for themselves. Imperfect Foods claims to have saved 50 million pounds of food and 900 million gallons of water from being wasted since 2016.
Unlikely sources like Swedish furniture giant IKEA are also doing their part to reduce food waste. The company recently released a free downloadable “Scrapsbook Cookbook” that features recipes using food ingredients that might normally be thrown away.
DTC Doubles Down on Sustainability
Perhaps as a response to growing expectations from eco-conscious consumers, DTC eCommerce brands across industries are jumping on the sustainability bandwagon. This is especially true of major eCommerce players like Whole Foods, Walmart and Amazon who deal in groceries and consumables. DTC health, wellness and beauty brands in particular are leading the way in enacting stringent eco-friendly practises and guidelines.
The Future of Food Subscription Services
As the world slowly returns to pre-pandemic routines, revenues for food subscription services have dipped slightly from the boom numbers of 2020. Plus, issues around subscriber services’s use of plastic and cardboard packaging persist. Still, consumers are finding subscriptions to be more sustainable and convenient than grocery stores. All of this means meal kits and food subscriptions are here to stay.