Meal Prep Business Overview

A meal prep business provides pre-made meals that customers can eat throughout the week. These meals are typically prepared in bulk, portioned out, and packaged for easy storage and reheating. These businesses require proper licensing, health department certifications, and food handler permits to operate.

The most common business models in the meal prep industry include:

• Direct-to-Consumer Subscription: Prepared meals delivered weekly to customers’ homes through recurring subscription plans
• Storefront Retail: Physical locations where customers purchase pre-made meals for the week
• Wholesale Distribution: Preparing meals in bulk for sale through grocery stores, fitness centers, or other retail partners
• Corporate Catering: Providing meal prep services to businesses for their employees

Related: Checklist To Start A Business

How Do Meal Prep Businesses Make Money?

Meal prep businesses generate their primary income by batch-cooking meals and selling them at a markup over ingredient and production costs. Customers typically purchase multiple meals at once, paying between $8 and $15 per portion.

Many meal prep businesses operate on a membership or subscription basis. These memberships provide stability because they ensure regular income and help the business account for how many customers they will serve each month by better forecasting ingredient and labor costs.

Industry Statistics

The meal preparation industry falls under NAICS code 311991: Perishable Prepared Food. This classification covers businesses that prepare and package meals and specialty foods for individual, commercial, and institutional customers.

Here are some highlights about the meal prep industry:

Meal Prep Industry Size & Growth: The meal preparation industry generated $1.5 billion in revenue during the last year. The industry has shown steady growth, with a projected annual increase of 11.6% through the next five years, reaching $2.7 billion. This growth stems from increasing consumer demand for convenient, healthy eating options and busy professionals seeking time-saving meal solutions. (Meal Prep Mavericks)

Number of Meal Prep Businesses: Currently, 1,200 meal prep companies operate across various regions. The market remains relatively open, with no single company controlling more than 15% of the total market share. Most businesses are independently owned and operated, with a small percentage operating as franchises. The industry continues to attract new entrepreneurs due to its relatively low barriers to entry. (Meal Prep Mavericks)

Meal Prep Business Profit Margin: Meal prep businesses typically maintain gross profit margins between 35% and 45%, with net profit margins averaging 10%. These margins vary based on factors such as ingredient costs, operational efficiency, and local market competition. (Meal Prep Mavericks)

Costs To Start a Meal Prep Business

Starting a meal prep business can cost between $10,000 and $125,000. The lower end represents starting with a shared kitchen space, while the higher end covers a full commercial kitchen setup.

There are many expenses involved in starting a meal prep business, but here are some of the larger costs to consider:

Commercial Kitchen Equipment: For a shared kitchen startup, initial equipment costs can be as low as $3,000 to $7,000 for basic supplies like cooking utensils, storage containers, and small appliances. For a dedicated facility, costs increase from $15,000 to $45,000 for full commercial-grade equipment.

Kitchen Space: Shared kitchen rental typically starts at $15 to $35 per hour, with monthly minimums around $500. For a dedicated space, monthly rent runs between $1,500 and $5,000, with initial deposits and renovations adding another $10,000 to $25,000.

Food Storage and Delivery Equipment: Depending on scale, initial storage and transportation equipment costs range from $2,000 to $20,000. Small operations might start with basic coolers and a personal vehicle, while larger operations need commercial refrigeration units and dedicated delivery vehicles.

Food Safety Certifications and Permits: Health department permits, food handler certifications, and business licenses typically cost between $1,500 and $3,500. These are required before the business can legally operate and handle food.

These estimates represent general ranges, and actual costs will vary based on location, business size, and operating model.