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 fresh look was fading away, and things became somewhat smelly. 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, disposal of the box, leaves a negative impression, this would count only once if all the family eats at the same time. But with one person eating for six days, the problem comes back on a daily basis.

Whilst on Monday all the other value points are achieved (1), during the next days the value impression is slowly neutralized point-by-point (0). Worse, over time more and more negative impressions come up (-1), and by the end of the week the overall value has been totally destroyed and turned negative.

The meal kit maker, instead of getting the maximum of 29 (or 30-1) value points for the six meal kits, accumulates so much value destruction that the result is an overall negative value.
If the meal kit maker looks at 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 a new plant to harvest the fruits one day, we only can report the death of the overall transaction. It becomes a negative investment.

A small glitch in logistics can lead to a situation that the value evolvement gets completely out of control and the original value potential turns against its own source.

This may be a reason why so many of the meal kit suppliers have gone out of business.

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