Walmart is getting into the prepared meal market, gearing up to sell a variety of meal kits from different vendors.
Michael McDevitt, chief executive of meal kit company Terra’s Kitchen, told TheStreet the initiative is slated to happen by December. “This is a low-risk model for Walmart to see if their eCommerce shoppers will have an interest in meal kits and, if so, which ones are the most interesting to them,” McDevitt said in the news report. “There’s no infrastructure risk, no marketing risk.” According to the report, the meal kit companies will pay Walmart a referral fee for bringing customers their way.
The move on the part of Walmart comes as competition is kicking up in that area of the retail market. According to the report, the meal kit market is worth more than $2 billion, and has recently gotten the attention of the big players. As the report pointed out, Albertsons recently spent $200 million to acquire meal kit company Plated, and Amazon is already eyeing the market. Its multibillion-dollar deal to buy Whole Foods has gotten all sorts of food purveyors nervous. This past spring, Campbell Soup Company invested $10 million in Chef’d, and Peapod.com sells meal kits that are backed by Conagra Brands, reported TheStreet.com.
In July, Amazon filed for a patent with the tagline “We do the prep. You be the chef.” That patent filing weighed on Blue Apron, which had emerged as a leader in the marketplace. Not too long ago, the meal delivery startup was valued around $2 billion in the private market, earning it a place among unicorns. That was before its IPO in June, and also before Amazon’s blockbuster purchase of Whole Foods.
Now, between the eCommerce giant’s subsequent move into Blue Apron’s niche and Blue Apron’s own struggle to convert new customers, it’s clear that investors just aren’t feeling it. Blue Apron’s stock fell nearly 30 percent from June to July.