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Order Up: Dinner-Kit Services Promise Instagram-Worthy Meals

Recipe-box services like Blue Apron ship to customers doorsteps not only detailed recipes, but all of the ingredients needed to make them.

Silicon Valley investors and customers alike are eating up the "recipe box," a dinner-kit service that delivers a box of recipes and all the pre-packaged ingredients needed to whip them up.

The idea is that even the most hapless non-chef can put together a hashtag-worthy ricotta and kale calzone in the time it takes to have pizza delivered. Recipe boxes have become a fast-growing and well-funded market, with scores of startups hoping to grab a piece of the homemade pie.

The American market leader Blue Apron closed $50 million in venture capital in April, and reports set the company's valuation at about $500 million. For venture capitalists like Stripes Group, which led the funding round, the appeal is clear: Everyone needs to eat.

"Food is a very large addressable market, and when done well it’s a huge value proposition," said Stripes Group managing partner Ken Fox.

For customers, experts say the recipe-box space is white-hot thanks to a combination of busy schedules, the rise of myriad on-demand services, and even a bit of "Top Chef" and Instagram influence.

"We're at this strange point where people want to be healthy, want to cook at home, and they feel guilty if they don't do it. Yet we just have less time," said Brita Rosenheim, principal of Rosenheim Advisors, a consulting firm for the food-tech industry.

Convenience and the on-demand economy

Blue Apron and its competitors generally offer rotating recipes weekly, and customers can order or skip that week's menu. Need three bay leaves for that mahogany beef stew? Exactly three leaves come plucked and ready to cook in an individually wrapped bag, tucked next to a tiny squirt bottle of hoisin sauce and three shrink-wrapped beef chuck roasts.

Food analysts say the market is fairly new, but the number of companies in the space is rising rapidly. They're in a unique space at the intersection of several trends in both food and tech startups, Rosenheim said.

"You look at car services like Uber and subscription boxes from beauty to food –- they're all different shades of this on-demand economy," Rosenheim said. "The root cause of this is the always-connected mobile consumer who is short on time, and willing to pay for convenience."

But while time-saving is a huge part of the appeal of these recipe boxes, Rosenheim notes they appeal to a very particular brand of user: folks who want to cook but perhaps don't have the time to stand on line at the market -- yet aren't so crunched that they'd opt for similarly-priced, restaurant-made takeout meals over spending 30 minutes in the kitchen. The meals tend to cost at least $10-$15 a plate.

"If you think about what goes into it, from the farmers to the assembly to the delivery, to get this box to you, it's actually quite cheap," Rosenheim said. "But not everyone will pay that much for a single plate, period."

Still, services like Blue Apron, HelloFresh and Plated have drawn enough interest to support a fast-growing industry. The early pioneer Middagsfrid kicked off the trend in 2007, and since then the market has expanded to all kinds of eaters: omnivores, pescetarians, children, gluten-free, paleo. Some cater to particular cuisines or calorie-counters, while others pride themselves on local or organic ingredients.

'Top Chef' effect

Though the recipe box contents may vary, the sense of excitement they create is part of "this slowly building, long-term trend of cooking as entertainment," said Elizabeth Friend, senior consumer food service analyst at Euromonitor International.

"People talk about 'plating' their food, which was never a part of non-chefs' lexicons until recently," Friend added. "We watch 'Top Chef' and read food blogs with beautiful photography -- but compare those expectations with the reality of home kitchens and busy schedules."

Social media also play a role, demanding that meals be not only delicious and nutritious, but beautiful too. A recent Blue Apron contest called on customers to submit their most "Instagram-worthy meals."

Will recipe boxes go the way of the cupcake?

Recipe boxes play into a current foodservice trend of "the constant need for new experiences and variety," Friend said. But Rosenheim, the food tech analyst, thinks that's what will bring down the market eventually. She estimates that companies have to spend approximately $40 to $80 in marketing to acquire each new user, a steep price.

"I don't think it will be around at a large scale in 10 to 20 years. It's a novelty," Rosenheim said. "The reality of the food industry is that there are a lot of passing trends –- think the cupcake craze –- and this trend cycle may be shorter than most."

Some recipe-box companies may evolve into marketing and product partnerships, Rosenheim said. They could sell, say, a Le Creuset pan that would be perfect for this week's poached fish recipe, or sign a deal with Jim Beam for the bread pudding's bourbon sauce.

"I do think this is a legitimate industry, but I think there will be consolidation. Just like daily deals or any area where there's a flurry, there will eventually be people who fall out," Rosenheim said. "It’s a landgrab situation at this point and companies need to stand out."

The super-niche approach: quinoa in Brooklyn

For some recipe box startups, the way to stand out is to think small.

Marisa Claire Smith founded Sweet Roots NYC in 2012 with a focus on organic and local healthy ingredients. The company delivers pre-cut ingredients for meals that cost $25 per plate to New York City's Manhattan and Brooklyn boroughs.

"I intentionally picked a very niche market, farm-to-table," Smith said. "I wanted to make it more joyful and less challenging to cook healthfully."

Sweet Roots also offers menu customization at a level that some bigger companies can't offer. "Whether you are gluten-free, vegan, want to go paleo, or just not a fan of cilantro, we'll take care of you," Sweet Roots' site reads.

Smith started the business a week after she graduated from New York University with only $3,000 of her own money. Sweet Roots has since raised a seed round of funding from investors including High Line Venture Partners and expanded to 18 employees.

"Thank God for the new terms like meal kits and recipe subscriptions, because I used to have to tell people, 'Um, we wash and cut your vegetables and it comes with a recipe and we deliver it...' The elevator pitch has gotten a lot shorter," Smith said.

Smith, who works with her team in an industrial kitchen in Brooklyn at a former Heinz Ketchup factory, said the success of Blue Apron helps sell customers on the idea of the recipe box.

"I'm not trying to feed the whole world," Smith said. "I just want to help my corner of the world eat better."