Blue Apron

For radio broadcasters hungry for new ad dollars, a fast-growing food business could deliver the perfect portion. Online meal kit companies, which assemble and ship ready-to-cook portions to subscribers, use terrestrial radio, digital audio and podcasting to build brand awareness and generate business. These services, including Blue Apron, Hello Fresh and Sun Basket, are now a new audio advertising category.

The meal kit industry has taken off in recent years, hitting an estimated $1.5 billion in sales last year, according to estimates by Packaged Fact. One in four American adults have purchased a meal kit for delivery or in-store in the last year, Nielsen reports, with 70% continuing on after making their first purchase. According to a recent Harris Poll, 25% of adults purchased a meal kit online or in-store last December, but only 12% of those were online orders. Meal kits were most popular among younger consumers, with 26% of Millennials 18-34 reporting they ordered a meal kit online, while 22% of adults 35-44 ordered kits online.

“Meal kits are hitting a mark with consumers and delivering on key convenience and health trends in the marketplace today,” the Harris Poll notes. Out of the three leading services, market leader Blue Apron has about 71% market share, followed by Hello Fresh with 23% and Plated with about 6%, according to 1010data.

To grow its brand, Blue Apron has aggressively advertised across radio, TV, digital and out-of-home media. Blue Apron spent $33.45 million on total measured media last year, including $2.41 million on radio advertising, according to Kantar Media, a considerable rise from $9.5 million on total media in 2015 and just $293,900 on radio. Its nearest competitor, Hello Fresh, is increasing its radio spend, while its overall marketing outlay is flat. In 2016, Hello Fresh spent $446,000 on radio spots, compared to 2015, when it did not spend any marketing dollars on radio. In contrast, last year, Hello Fresh lowered its marketing outlays slightly, spending $19.1 million on total advertising, down fractionally from $19.2 million in 2015, Kantar Media reports.

As arguably the best-known brand in the meal kit industry, Blue Apron uses a wide variety of audio platforms, including over-the-air spots, digital streaming and podcasting, to reach potential home chefs. Blue Apron was an early adopter of podcast sponsorship, being an initial sponsor of several hit podcasts, including public radio hit “Serial,” and WBUR and The New York Times’ “Modern Love” podcast. Blue Apron currently advertises on more than a dozen popular podcasts, often using the hosts to read its messages and including a special promotion offer for listeners.

“We’ve been able to scale as the number [of podcasts] grows,” Greg Fitzgerald, director of acquisition marketing at Blue Apron, said at Social Media Week last March, drum.com reported. “When they started Blue Apron, Serial hadn’t started yet and they didn’t have these refined networks of Bill Simmons and Ringer [and] Crooked Media and Pod Save America, which have become huge.”

Fitzgerald said Blue Apron tailors its message for the podcast audience, such as offering messages about the food system on NPR programs. Some podcast hosts that read Blue Apron ads talk about their own experiences cooking with the kits at home and even post their results on social media. “It’s allowing [hosts] freedom and flexibility and not being precious about your brand as opposed to jamming a message down their throats,” Fitzgerald said.

Similarly, Hello Fresh and Sun Basket have jumped into podcast sponsorships. Like Blue Apron, Hello Fresh advertises on Gimlet Media podcasts, while Sun Basket is an initial sponsor for NPR’s new morning news podcast “Up First.” With each company, the podcast ads often include an offer code, which can help the meal kit companies keep track of what users come to their sites via podcasts and monitor conversions.

As broadcasters look to monetize their podcasts, meal kit advertisers are an example of emerging categories that can be matched with podcasts. Hosts are often enthusiastic to try the services and then read ads or post about their experience. And with podcast production in overdrive, additional advertisers will be looking to jump in, industry execs contend, which helps the overall podcast industry.

“We love more and more publishers getting on board. It validates the space as a great place for content,” Jason Hoch, chief content officer for popular podcast series “HowStuffWorks” noted at a recent NAB panel. “Big brands and advertisers care about some semblance of scale. We’re starting to see bigger numbers and an audience that converts really well to direct response.”

Expect to hear more spots for meal kits, as the industry does not appear to be a passing flavor. According to the Harris poll, seven in 10 meal kit purchasers are still actively buying them, including 77% of 18-34-year-olds and 81% of 35-44-year-olds. The services can use audio ads to distinguish themselves from competitors and plug any new products they may add, such as deserts.

“Consumers wanting convenience is here to stay, and providing a full-meal solution clearly meets a need for consumers. There is ample opportunity for both delivery and in-store options to capitalize on that need,” said Meagan Nelson, associate client director of Nielsen’s Fresh Growth & Strategy team.