Sometimes the success of one company leads to multiple copycat brands, which ruins the entire category.
Call it the craft brewery principle. A city might flock to a new craft brewery if it’s bringing something to the market that it didn’t have before.
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If that success, however, leads to more craft breweries opening in the same area, it does not necessarily lead to enough increased demand to support multiple operations. People have just as much interest in craft beer — maybe even a little more — but they’re spreading that interest between multiple establishments.
That can lead to a slow death where the overall sales in the category may increase, but multiple players may go bankrupt because the business gets too diluted between competitors.
The same phenomenon has been a drag on multiple businesses. Rideshare companies, for example, cannot raise prices to the levels required to make their businesses consistently profitable because Lyft and Uber both exist.
People like and use rideshare services, but prices remain artificially low because two nearly identical companies are competing for the same customers. It’s a similar situation in the food delivery business and in countless other areas.
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The success of craft breweries has actually led to the death of some craft breweries.
Image source: Shutterstock
Meal delivery services have become too common
The idea of having pre-made meals delivered to your home at a reasonable price seems like a good one. On one level, that has proven out as people are using these services.
Unfortunately, at least for the companies trying to win share in this space, a lot of players have entered the market. Anyone who wants to have ready-made meals delivered to their homes — whether they want ones that have to prepare or meals they just have to heat up — has a lot of choices.
In addition, every major supermarket chain offers its own variation of the service. That has led some companies to try to find a niche in the ready-made meal space as a way to differentiate their brand.
That’s the approach of Diet-to-Go, a meal prep service that targets people looking to lose weight.
“Diet-to-Go is a meal delivery company focused on making healthy eating both easy and affordable. Our goal is to change perceptions of what it means to eat healthy and help our customers achieve and maintain a healthy weight for life. We want to help people establish a common sense approach to healthy eating, an approach that can be sustained so that making smart food choices becomes a way of life,” the company shared on its website.
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Diet-to-Go filed Chapter 11 bankruptcy
New Century Food Corporation, which does business as Diet-to-Go, filed for Chapter 11 bankruptcy protection on August 6 in the Eastern District of Virginia. The company reported that it had between $0 and $50,000 in assets and between $1 million and $10 million in debt.
The company makes no mention of the bankruptcy filing on its website which appears to still be taking orders. In the filing, Diet-to-Go shared that it has between 50 and 99 creditors.
More bankruptcy:
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Diet-to-Go operates in a niche of the meal delivery service space where it competes with a giant in Jenny Craig. The company has tried to differentiate itself.
“Working with some of the best chefs in the business and cooking in our USDA-certified kitchen, we provide our customers fresh, delicious, low-calorie, nutritionally balanced meals to help them lose weight or simply support an already healthy weight and lifestyle. We are constantly working to improve our products and service, in our aim to provide the best tasting, healthiest, low-calorie meals possible. And to do that, we need your input,” it shared on its website.
Diet-to-Go has not filed any sort of plan for financing or how it plans to reorganize during its Chapter 11 bankruptcy.
