healthy meals delivered to elderly

An opportunity has been identified in a growing niche that has been largely untapped to date. The opportunity further can be described as being at a crossroads that exists where many factors come together in an intersection in which many social changes are present. The business model that is being proposed in this report consists of developing prepped meal service for seniors, where prepared, nutritionally-balanced meals are delivered to seniors who have trouble cooking for themselves, at a cost-effective price. The need for a sustainable food service model that focuses on meals that are easy to prepare, nutritionally-balanced, consistent with dietary requirements, and affordable is especially relevant to a vulnerable population like the elderly who, in many cases, has difficulty in maintaining a proper diet. The demand for such a service has quietly build a niche industry that is still developing.

There are many social factors that have been identified that also support the long-term growth and sustainability of this industry. The effects of a growing epidemic of obesity has disproportionately affected vulnerable populations such as the elderly who often rely cheap prepackaged foods that are of poor nutritional value. Obesity can play a significant role in the pursuit of many health objectives and many doctors advocate to their patients the importance of proper diet. Furthermore, these issues also reside in a background in which the entire food service industry is rapidly trying to evolve to practice more sustainable operations. This report frames the opportunity to target this niche by considering many factors from different perspectives and concludes that both the operating model and the business model could create a sustainable and profitable opportunity for all the stakeholders involved.

Background

One interesting development can be illustrated by the NRA's top 10 trends is that 5 out of 10 deal with local sourcing and sustainability; "green" values are becoming a permanent fixture in our culture, and successful restaurants are figuring out ways to make their operations source locally and sustainably (McGuire, 2012). The implications of the operating styles of previous generations of the food and beverage industry are becoming apparent and many factors have coalesced to create a foundation in which the sustainable supply of food is becoming more salient to all levels of the public. One of the more extreme examples of a counter movement can be represented by an organization known as "Slow Food" as a counter to the "Fast Food" obsession that has existed in the population for generations (Slow Food USA, N.d.). However, as pressure continues to mount, even more conservative or moderate movements have also called for the US to rethink its food systems.

The problems related to the current food production system are not exclusive to health considerations alone. There are many inefficiencies in the way food and beverages are consumed in the entire cycle of food production, consumption, and disposal. For example, food and beverage waste is becoming an increasingly salient issue as food packaging is filling up landfills; while there are also the ethical issues related to the waste of edible materials when so many in this US go hungry. As one industry report states:

"Most foodservice operation throw out a massive amount of garbage, most of which could be diverted. 75% of material in today's landfill is recyclable or compostable, while 50-70% of the weight of a foodservice operation's garbage consists of compostable food items. Food packaging makes up most of the remaining weight of the garbage's bins, but account for around 70% of the volume of foodservice trash. A foodservice operation without recycling, composting or any waste reduction program can reduce their disposal cost by at least half by implementing simple, structured practices. Rethink. Reduce. Reuse. Recycle (Sustainable Foodservice)."

As a result of the current inefficiencies in food production, coupled with new opportunities for distribution that have been developed by companies like Amazon for example, there are many emerging opportunities to innovate food production and distribution practices. For example, by preparing bulk individually prepared meals, it can reduce food waste by managing supplies effectively, while also reduce waste and spoilage. By contrast, when an individual prepares their own meals, there is often a significant amount of food that is either not used in production, or goes uneaten afterwards. While many people enjoy cooking for themselves and would unlikely give up this practice, not everyone has the time, desire, or ability to prepare healthy meals on their own; the elderly population is a prime example of a market which is likely to open to easier food options.

Not only does adopting sustainable practices relative to food production make sense from an ethical perspective on many levels, but it can also add value to the products that the products being marketed in this industry segment. The restaurant industry for example has become increasingly competitive and requires differentiation in many markets to build a loyal customer base and a food service provider that has developed an innovative business model that is also sustainable can serve as a way to differentiate itself and build consumer and investor value. By managing production, distribution, and waste responsibly, a business can incorporate the same green practices that have already been identified to have significant market value and be one of the fastest growing trends in the industry in general.

Beyond the production, distribution, and waste management aspects to sustainability, there is also the health component that is a critical consideration. The effects of improper diets can best be illustrated by the obesity epidemic, which is becoming an increasingly salient problem in much of the Western world. It represents a trend that has been growing in the United States and at a pace that is considered in epidemic proportion by a consensus among most health professionals. There many factors that are involved with the emergence of this trend, and diet is not the only issue involved, but it is one of the fundamental aspects that best explains this growing concern.

The health filed has identified many associated outcomes such as the negative mental and social effects of obesity, such as low self-esteem, depression, negative body image, stigma, teasing, discrimination, and social marginalization. Furthermore, excess sugar associated with modern diets, can make it more difficult for the body to produce insulin to process these chemicals. Furthermore, these conditions can also lead to other conditions such as blindness, neuropathy (nerve damage), and even kidney failure in some extreme cases (Mokdad, et al., 2001). There are also many interventions which healthcare providers can implement to help reverse these trends, all of which typically center on diet, in conjunction with exercise. However, particularly for elderly patients, many individuals might have trouble maintaining their dietary requirements that are a necessary component to improving their health.

The World Health Organization stated that the key to maintaining healthy weight was an affordable supply of fresh nutrient-rich foods; such access could be facilitated through a combination of agricultural subsidies, pricing policies, regulatory action, and consumer education. Such approaches involve a cooperation between governments, academia, and the food industry (Drewnoski & Darmon, 2005). "The United States is experiencing substantial increases in overweight and obesity that cut across ages, racial and ethnic groups, and both genders, has been increasing in every State in the Nation [and] has reached epidemic proportions. . . left unabated, overweight and obesity may soon cause as much preventable disease and death as cigarette smoking. (Benloulou, 2005)".

The industry has existed for a number of years, and as of 2013 was estimated to be worth $1 billion annually (McDill, 2013). This is a niche market, catering primarily to seniors with ample disposable income, but without either the ability or inclination to prepare their own food. Some simply have never prepared much of their own food, while others are more in a position where they can no longer regularly and reliably cook for themselves. The industry is divided into several niches, of which the seniors market is one of the biggest. This market has high demand and loyalty among seniors with specific dietary requirements (dieting and diabetes are a couple of the bigger ones). This is a niche market, albeit a large and growing one, but it without much information. There have been a couple of reports published that describe the industry, its size, and its growth prospects, but this business has grown quietly, and the key players are not written about much in the business press.

There are a few different types of players in the industry, including those that already produce these types of meals but then find a way to deliver them to their customers. There are also relatively small companies that have opened specifically to target this niche. There are some challenges, such as marketing, but there are places like assisted-living facilities where word-of-mouth marketing can be conducted. Further, smaller companies must often provide food samples so that seniors can judge if the company's offering is superior to the other options available in that market (Jensen, 2017). Markets with a high concentration of seniors will typically already see competitors, but there are some markets with lower concentrations, but enough to be economically viable, where greenfield opportunity still exists.

There is also evidence that the use of online applications has spurred new growth in the food delivery business in general. Such apps make it easier for customers to order their food, and to switch between providers as they would between restaurants. There is evidence that some companies in the business are starting to grow to a scale where the cost of producing the food is significantly lowered, and such companies are locking in competitive advantages of scale (Hirshcberg et al., 2016). Many seniors are now adopting smartphones and tablets to communicate with their families, or to access applications relevant to their health, and these seniors are using their devices to access food services, lowering the cost of marketing to these individuals.

Product

The business is a prepped meal service for seniors, where prepared, nutritionally-balanced meals are delivered to seniors who have trouble cooking for themselves, at a cost-effective price. The benefits to the consumers are that they no longer need to worry about the hassle of buying groceries and preparing meals -- they pay for the convenience of removing themselves and their energy from the food preparation process (Business Wire, 2015). The difference in this route and other institutional service providers, is that this model targeting seniors who live on their own, which represents largely a new market.

Place

There are a few different types of players in the industry, including those that already produce these types of meals but then find a way to deliver them to their customers. The obvious target markets are going to be where there are large concentrations of elderly people such as senior living centers, assisted-living facilities, and any elderly clubs or organizations. Furthermore, markets with a high concentration of seniors will typically already see competitors, but there are some markets with lower concentrations, but enough to be economically viable, where greenfield opportunity still exists.

There is also evidence that the use of online applications has spurred new growth in the food delivery business in general. Such apps make it easier for customers to order their food, and to switch between providers as they would between restaurants. There is evidence that some companies in the business are starting to grow to a scale where the cost of producing the food is significantly lowered, and such companies are locking in competitive advantages of scale (Hirshcberg et al., 2016). Many seniors are now adopting smartphones and tablets to communicate with their families, or to access applications relevant to their health, and these seniors are using their devices to access food services, lowering the cost of marketing to these individuals.

Spaeder (2014) notes that senior food delivery is one of the best growth markets because the senior population is growing, many are adopting modern technology, and because there is strong need among seniors with medical conditions or who have limited access to cooking facilities. With the growth in the market comes opportunity both for entrepreneurs, for existing restaurants, and for large institutional players. Uber, Lyft, and other transportation companies are also lowering the cost associated with delivering food to seniors in an efficient manner. This industry thus benefits from a confluence of demographic and technological factors that make it high-growth, potentially quite profitable, and with upside in both areas.

Spaeder (2014) notes that senior food delivery is one of the best growth markets because the senior population is growing, many are adopting modern technology, and because there is strong need among seniors with medical conditions or who have limited access to cooking facilities. With the growth in the market comes opportunity both for entrepreneurs, for existing restaurants, and for large institutional players. Uber, Lyft, and other transportation companies are also lowering the cost associated with delivering food to seniors in an efficient manner. This industry thus benefits from a confluence of demographic and technological factors that make it high-growth, potentially quite profitable, and with upside in both areas. Therefore, there can both be a local market, as well as a regional market with such logistical networks already in place.

Price

The price will be competitive with other organizations that are already in the industry. The service should focus more on value than price in terms of innovation and quality. However, from a value perspective, the meals will be provided at an exceptional value that is made possible through efficiently designing the supply chains and distribution networks.

Promotion

The promotion of these products will likely be one of the most important considerations for the entire business model given the fact that there will have to be a certain quantities of scale that will have to be reached before such an operation is able to build profitable revenue streams. Although there is growing numbers of elderly users who are adopting new technologies, such as smart phones, it is reasonable to suspect that a more traditional sales pipeline would be more effective and direct sales to communities of concentrated populations of elderly individuals would represent the low hanging fruit for sales targets. Since the operations will largely be scalable as demand increases, the company will be able to grow steadily as new promotion opportunities are identified.