Marley Spoon (ASX:MMM) share price jumps 9% following $20b sector forecast

The global meal kit market has received a spicy new forecast…

Mitchell Lawler

Mitchell stumbled upon the concept of investing when in high school, devotedly urging his parents to put some money into a handful of technology companies with increasingly popular products among his demographic – many of which have gone on to great success. It wouldn’t be until 2017, some five years later, that Mitchell became an investor of his own money. Having studied and worked as a mechanical engineer in the building services industry, Mitchell takes a methodical and analytical approach to evaluating businesses. Rather than relying purely on numbers, Mitchell drills beyond a company’s metaphorical mantle to unearth obscure patterns or competitive advantages that would go otherwise unnoticed. His expertise resides within areas such as software, consumer goods, and building services equipment. However, his quest to find quality companies that set the industry standard and flex some degree of an impenetrable position has no limits – small cap to mega cap, cosmetics to healthcare – if it’s an exceptional business it’s on his radar.

Published June 9, 2021 5:07 pm AEST

The Marley Spoon AG (ASX: MMM) share price rallied today despite no announcements from the company. Potentially, investors might be absorbing a recent research report that forecasts a peachy future for the global meal kit delivery market.

The German-based meal kit company's shares finished the session 8.98% higher at $2.67.

meal preparation of healthy food in a family kitchen — Image source: Getty Images

Marley Spoon shares lift amid beefed-up estimates

Despite market research and consulting company Renub Research publishing its analysis of the meal kit market late last month, the forecasts have been widely shared across financial news over the past couple of days. The report, titled 'Meal Kit Market Global Forecast by Country, Type, Ordering Method (Online, Offline), Category (Vegetarian, Non-Vegetarian), Company Analysis', offered a deep dive into the industry.

The crux of Renub's analysis is that COVID-19 has provided a substantial tailwind for the meal kit industry. With restaurants and some supermarkets forced to close, consumers have been increasingly turning to delivered meal kits to satisfy their culinary desires.

In essence, the report outlines an expectation the convenience phenomena in meal preparation will continue to grow. It found the global meal kit market was estimated to be worth US$8.4 billion in 2020. However, this is forecast to reach US$20.1 billion by 2027.

Those estimates certainly look appealing for companies operating within the space. An expanding market means greater potential for revenue growth. This must be music to the ears of shareholders.

Meal kit roundup

Marley Spoon isn't the only company looking to take advantage of this potentially growing trend. Other dominant competitors in the industry include internationally listed companies HelloFresh and Blue Apron Holdings Inc.

HelloFresh recorded more than 1.3 million shoppers in the first few months of lockdowns. According to Similarweb, HelloFresh received a total of 9.81 million website visits in May. Marley Spoon, on the other hand, recorded 1.04 million visits.

For reference, the ASX-listed Marley Spoon has a market capitalisation that's roughly 3% of HelloFresh's. However, that hasn't stopped the Marley Spoon share price from soaring 147% in the past 12 months.

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