The meal kit value chain

A friend lives alone and invited all his family as guests for his birthday. He ordered six meal kits for the night. Unfortunately, they arrived a day too late, when everybody had already left. Now he was stuck with six meal kits. He used the first one on Monday, when it finally arrived, and then one per day for the rest of the week.

Initially it was ok, but towards the end, the freshness was fading, and things became somewhat pungent. More and more of the ingredients could not be used any more. Although it generally tasted good, he felt rather forced to eat one kit every day.

Things happen, and it may be just everyday life. But let’s look at the value chain. Certainly, logistics has been the root of the problem, but let us look at the problem itself in terms of ‘value created’ (1), ‘value not created’ (0), ‘value destroyed’ (-1)

In fact the meal kit makers have done a good job in creating value potential on most levels. Although the last value point, ‘ease of disposal’, leaves a negative impression, it would only count once if all the family eats at the same time. But with one person eating for six days, the problem returns on a daily basis.

Whilst on Monday all the other value points are achieved (1), over the next days the value impression is slowly neutralized step by step (0). And what’s worse is that over time more and more negative impressions are generated (-1). By the end of the week overall value has been totally negated.

The meal kit maker, instead of getting the maximum of 29 value points (or 30 minus 1) for the six meal kits, creates so much value reduction that the result is an overall negative value.

If the meal kit maker looks at the financials, the deal is ok, the money has been cashed in. But if it looks at business growth, it has been a disaster. When also considering acquisition costs, sowing the seeds for new growth, then we can only report on the death of the overall transaction. It becomes a negative investment.

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