Meal Delivery Service for Seniors: Business Model Analysis

Introduction

An opportunity has been identified in a growing niche that has been largely untapped to date. The opportunity can be described as existing at a crossroads where many factors converge — an intersection in which significant social changes are underway. The business model proposed in this report consists of developing 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 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 have difficulty maintaining a proper diet. The demand for such a service has quietly built a niche industry that is still developing.

There are many social factors that support the long-term growth and sustainability of this industry. The growing epidemic of obesity has disproportionately affected vulnerable populations such as the elderly, who often rely on cheap prepackaged foods of poor nutritional value. Obesity can play a significant role in overall health outcomes, and many doctors advocate to their patients the importance of a proper diet. Furthermore, these issues reside within a broader context in which the entire food service industry is rapidly evolving toward 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 stakeholders involved.

Background: Sustainability in Food Service

One telling development is illustrated by the National Restaurant Association's top ten trends, in which five out of ten deal with local sourcing and sustainability. "Green" values are becoming a permanent fixture in our culture, and successful restaurants are finding ways to source locally and sustainably (McGuire, 2012). The implications of previous generations' operating styles in 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 at all levels of public awareness. One of the more striking examples of a counter-movement is the organization known as "Slow Food", formed as a direct 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 moderate movements have called for the United States 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 across the entire cycle of production, consumption, and disposal. For example, food and beverage waste is becoming an increasingly salient issue as food packaging fills up landfills, while ethical questions also arise regarding the waste of edible materials when so many in the US go hungry. As one industry report states:

"Most foodservice operations throw out a massive amount of garbage, most of which could be diverted. 75% of material in today's landfills 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 bins, but accounts for around 70% of the volume of foodservice trash. A foodservice operation without recycling, composting, or any waste reduction program can reduce its disposal costs by at least half by implementing simple, structured practices: Rethink. Reduce. Reuse. Recycle. (Sustainable Foodservice)"

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

Not only does adopting sustainable practices relative to food production make sense from an ethical perspective, but it can also add value to 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. A food service provider that has developed an innovative and sustainable business model can 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 as having significant market value and as one of the fastest-growing trends in the industry.

Health and Diet Issues

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

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

The World Health Organization has stated that the key to maintaining a healthy weight is an affordable supply of fresh, nutrient-rich foods — access that could be facilitated through a combination of agricultural subsidies, pricing policies, regulatory action, and consumer education. Such approaches require cooperation among governments, academia, and the food industry (Drewnoski & Darmon, 2005). As one report summarizes: "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).

Conclusion

This analysis makes a case for an opportunity identified at the intersection of several major social trends. In the United States, the population is aging, this population has a high rate of obesity, there is growing demand for healthy and sustainably sourced foods, and seniors are excellent candidates as potential customers who cannot — or simply do not want to — prepare their own healthy meals. Furthermore, many members of this population require special diets that can make food preparation even more burdensome. Therefore, delivering high-quality, easy-to-prepare, sustainably sourced meals to these potential customers will not only represent an innovative operating model, but will also offer investors and other stakeholders sustainable and growing revenue streams.

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