Retail

The Meal Kit Survival Guide

Gazing into the pantry, the kids whine that there is nothing to eat — and they’re partially right. There’s no ready food, only ingredients. To eat them, first someone would have to prepare them.

Grocery stores can feel just like that pantry: empty of “food,” full of ingredients (although most now have prepared food sections, and some even have their own cafés). But even easier than picking up a ready-made meal at the store is having one delivered to your home.

That’s one reason consumers love meal kit subscriptions. Many are also fans of the fresh, wholesome ingredients they receive each week, neatly packaged with easy prep and cooking instructions. There’s no need to look up a recipe or take a shopping trip to buy that one weird ingredient you will never use up — because, seriously, how many recipes can you make with water chestnuts?

It’s easy to see why so many people love their meal kit delivery service. It’s the best of both worlds: the healthy, fresh ingredients they’d normally have to individually select and buy from the produce section, mixed with the convenience of a prepared (yet often less nutritious) meal.

To compete, grocery stores are compromising to give customers what they want: meal kits. In-store. As easy to grab as that prepared lasagna, with all the benefits of a home-cooked dinner. Like they say, if you can’t beat ’em, join ’em. So, who’s joined ’em so far, and who may be thinking about it? Read on.

Gelson’s and Chef’d

The Gelson’s Markets in Valley Village/North Hollywood, California, has stocked 12 recipes by the delivery meal kit startup Chef’d. The meals feed two people and start at $24.99.

Gelson’s has 25 SoCal locations and plans to expand its meal kit offerings to other locations if the rollout at the Valley Village store is successful, according to Supermarket News. The grocer reportedly liked Chef’d for its additive- and preservative-free recipes and its compatibility with trusted chefs and brands, including the Atkins diet, the James Beard Foundation and Robert Irvine.

“This is a brand-resonant partnership for Gelson’s,” said President and CEO Rob McDougall.

This is Chef’d’s first foray into physical retail, and the company is optimistic. CEO Kyle Ransford said that, despite the explosive popularity of meal kits online, they’re missing most of the market if they ignore brick-and-mortar grocers, where most people still do the majority of their shopping.

Kroger and Prep + Pared

Kroger will be selling its own Prep + Pared meal kits in 37 of its 2,792 stores by the end of this month, including five Ohio stores, where it has been selling the kits already and five that just started stocking them in August, reported Business Journals.

Kroger has seven meal kit recipes featuring fresh, pre-measured ingredients, which customers can cook in around 20 minutes. These include crispy fish tacos, chimichurri steak and Vietnamese-inspired spicy lemongrass pork.

On top of that, Kroger and Walmart have become the first food retailers to offer curbside pickup of eMeals’ choose-your-food-style kits, which let customers build their own meal kits. Customers can buy their eMeals online and pick them up in-store or have the custom kits delivered by Instacart.

Kroger isn’t the only grocery chain making its own meal kits. Publix, Giant Eagle, and Whole Foods (pre-Amazon acquisition) have all seen success with their proprietary meal kit offerings.

Mulling?

According to news from CNBC, Albertsons Companies (the owner of the Safeway grocery chain) has discussed purchasing the meal kit startup Plated, although merger talks have not been confirmed. Green Chef and Home Chef are reportedly open to offers to purchase the company.

If Blue Apron isn’t mulling a sale, it maybe should be. Many believe that Amazon’s acquisition of Whole Foods Market will spell disaster for the San Francisco startup after its IPO crashed and burned this summer.

Of course, the threat is real for all meal kit startups: Gobble, Hello Fresh, Purple Carrot and Fresh Direct, just to name a few.

Amazon started selling meal kits online almost as soon as word got out about the Whole Foods deal, quickly trademarking the phrase, “We do the prep. You be the chef.” Seeking Alpha suggested that the eCommerce giant has more scaling power than all these little startups combined, with the ability to offer flexible portion sizing and just-in-time delivery (as opposed to the locked-in delivery schedule of a subscription).

Yes, all meal kit startups have reason to worry, but Blue Apron is particularly vulnerable, with plunging stock values, top-level layoffs and a hiring freeze piled on top of threats from competitors. However, Food Dive noted that the right retail partnership could stabilize Blue Apron’s situation.

Plus, Blue Apron has one thing going for it that almost no one else in the space does: name recognition. That could make it a more valuable target for grocers looking to acquire, Food Dive said. Because otherwise, why wouldn’t grocers just develop their own meal kit service like Kroger and Publix have done? Without brand recognition, it’s all the same to the customer.

Alone, grocers and meal kit startups are both in a precarious position against the new Whole Foods, and that’s in an environment that is already being referred to as “the grocery wars.” Together, maybe they can put up a fight.

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