So How’d We Do? Pricing & Costs I
In the first installment of our "so how'd we do" series we took a hard look at how we’re doing so far on one of the key things that sets VT Dinners apart: local sourcing of ingredients. With the mission of making healthy local food available, affordable, and easy year-round, we also wanted to assess how well we’re doing at delivering on the second of our goals: making local food affordable.
To be a game-changing business, we want VT Dinners to be within reach for families of all incomes. Our original plan was to offer meals in 4-serving portions, minimizing the cost of packaging and the labor necessary to fill each meal tray. What we heard at our early taste tests last August was that potential customers wanted more flexibility. It wasn’t only parents of young children who were interested in VT Dinners – plenty of other folks were too, and they didn’t necessarily want to thaw a meal for one serving and then have three more servings worth of leftovers. As we experimented in the kitchen, we also realized that the time to reheat a frozen meal depends on both volume and surface area. That meant the larger the meal, the longer it took to heat each serving… and lengthy re-heat times didn’t deliver on the goal of making these meals easy. In the end, we decided on a compromise: a 2-serving meal size with discounted “family pack” pricing when customers bought two of the same meal.
With family pack pricing, the per-serving price of a VT Dinners meal is roughly in line with the cost of takeout. Roughly the same price for real food? We felt like we were on the right track. But VT Dinners aren’t hot and ready to eat the moment you pick them up. We also wanted to gauge our accessibility in comparison to other frozen meals available in local stores.
Looking at two of our menu items with the most competition, mac ‘n’ cheese and chicken pot pie, we benchmarked competitor prices in the local Brattleboro Food Co-op, Price Chopper, and Hannaford. Unsurprisingly, VT Dinners are considerably more expensive than some of the larger brands. Stouffer’s, a subsidiary of Nestlé, is one of the behemoths of the frozen meals market; there are efficiencies of scale at play that we couldn’t hope to capture with our initial production runs. There’s also some variation in what each company considers a serving: our pot pie is 10oz per serving compared to 8oz for both Amy’s and Blake’s All Natural.
While we want to make VT Dinners available to as many people as possible, there are also significant costs to our small-batch approach and to working with premium local ingredients. Our initial thought is that the price point isn’t unreasonable. That said, we want to hear from you! Does the family pack pricing make sense? Have VT Dinners replaced takeout or the purchase of other frozen meals in your weekly shopping? Is price still a barrier? Let us know.
Stay tuned for next week’s discussion of the thorny issue of costs.
VT Dinners Founder