Fresh Prep Foods Inc. co-founders (from left to right) Becky Brauer, Dhruv Sood and Husein Rahemtulla.Handout
Fresh Prep Foods Inc. has been rapidly expanding while many of its meal-kit delivery competitors are struggling, partly because of something as seemingly simple as changing its packaging. Vancouver-based Fresh Prep says it’s the only company in the industry to offer zero-waste kits for its customers.
The innovation didn’t happen overnight. It took years, and many failed attempts to do away with single-use plastic and come up with the reusable kits Fresh Prep uses today. One involved fish sauce leaking all over the meal kits. It also took months for the company to figure out how to sustainably package a single egg. Its zero-waste kits, including reusable dishes and cooler bags, set it apart from its competitors.
“When we look at packaging, we think waste first. We don’t think ‘marketing.’ We don’t think ‘experience.’ We just think, ‘That’s waste,’” says Dhruv Sood, Fresh Prep’s co-chief executive officer who co-founded the company in 2014 with his friends Becky Brauer and Husein Rahemtulla.
“From the very start, we tried to reduce the amount of packaging that we would have to put into the product,” says Mr. Sood, recalling the different iterations over the years.
“We even had this program where we did mason jars for a few months for all our customers. That didn’t go over too well,” he says with a laugh. “The customers loved it, though. But we just couldn’t keep up, so we had to find something else.”
Managing growth through innovation
Meal-kit companies such as Fresh Prep were a pandemic purchase for many people stuck at home, giving the whole market a big boost. Fresh Prep’s revenue grew 540 per cent from 2018 to 2021. Since then, many companies, such as Montreal-based Goodfood Market Corp., have seen their revenues drop. Too much growth, too fast during those pandemic years was also the death knell for some in the meal kit industry. For example, New York-based Freshly Inc. went from delivering one million meals weekly across the U.S. in 2020 to announcing its closure in 2023.
Mr. Sood says that while growth was certainly part of the conversation with his co-founders, it was never the main objective.
“In those first few years, we thought, whether the business grows or collapses or whatever happens, we need to be able to be proud of the product,” he says. “We didn’t have the pressures of growth at the outset outside of just our own need to show success for ourselves.”
But the company did grow. Fresh Prep’s first market outside of B.C. was Alberta in 2021, targeting Calgary, Edmonton and Red Deer. Then, in 2023 and 2024, the company acquired two businesses – Vancouver’s Peko Produce and Montreal’s Cook It – to further expand, bringing its staff count to 620 across Canada, more than double from 2020.
Mr. Sood believes Fresh Prep’s expansion has been successful because of its focus on innovation and value.
“When we bought Cook It, we slashed the prices by 10 per cent to match our prices because, even though we took a loss in terms of being able to fulfill those orders, we knew that we were going to get to our standards and it was going to work out, which it is now,” he says.
On the innovation side, the company not only went through several iterations of its packaging but also faced a few logistical challenges. The company had to get pulp manufacturers and other industries involved to make each aspect of the kit right, even the storage bins, so they fit in the warehouse. Mr. Sood says Fresh Prep is working with another company to try and make pulp trays specifically for their kits.
Tapping into the growing meal-kit market
Fresh Prep says it's the only company in the industry to offer zero-waste kits for its customers.Handout
Data show the number of Canadians who use meal kit delivery services is expected to grow to 3.4-million users by 2029, or a value of nearly US$3-billion up from roughly US$2-billion in 2025. Demand is due to the convenience and time-saving benefits these companies offer households.
For companies to thrive in the sector, experts say they need to offer customers products and services they can’t get elsewhere.
Much of Fresh Prep’s success comes from not trying to be “all things to all people,” choosing instead to focus on more niche offerings such as sustainable packaging, says Daniel Clark, an associate professor of entrepreneurship at Western University’s Ivey Business School.
“Fresh Prep has said, ‘We’re going to focus on providing meal prep in a different way that hopefully will engender loyalty,’ because the biggest cost in this business is loyalty,” Mr. Clark says. “For instance, the churn rate at HelloFresh is enormous. It spends an absolute fortune attracting these people as customers. You go through the trial period and a massive percentage of people don’t stay or they don’t stay beyond another box or two.”
What Fresh Prep has done differently to get past the initial consumer interest phase, he explains, is offer something customers have said was a priority for them, sustainable meal kits.
“So, yes, they still have consumer cost of acquisition and, yes, they do discounted orders for your first few, but people are staying and that is the real crux of success in this field,” Mr. Clark says. “It’s finding a way to deliver a product that makes people resubscribe.”
Doug Irwin, chair of Fresh Prep’s board, says the company’s culture has allowed it to keep its customers and expand without compromising its product.
“There’s a culture, in Fresh Prep, of just providing a better-quality product and a better-quality experience. They really believe that,” says Mr. Irwin, who’s also founding partner at Vancouver-based mergers and acquisitions advisory firm Capital West Partners. “There is a risk of losing that culture with expansion, but the management team worked really hard to make sure that didn’t happen.”
“They don’t overpromise,” he adds. “They don’t underdeliver.”