With the recent news that Blue Apron has begun selling its meal kits in Costco, it’s perhaps unsurprising that competitors are also taking the plunge.
Chef’d has today announced that it has entered into distribution deals with Costco, Harris Teeter, Tops, Hy-vee, Weis and Gelson’s Markets. The push comes via a partnership with Smithfield Foods — a brand best known for its meat processing — which has invested $25 million into the meal kit startup. Campbell and online grocer FreshDirect are also investors in the firm.
Smithfield Foods is the brand behind Nathan’s Famous and Farmer John. The pair-up, noted analysts, brings together Chef'd and Smithfield’s knowledge of product development, in-store marketing, sourcing capabilities and distribution networks. Chef’d also brings its eCommerce insights, culinary and product development expertise and manufacturing assembly to the table.
“Meal kits are the fastest-growing channel across the entire food industry,” Sean Butler, SVP of retail at Chef’d, said in a statement. “The expansion of Chef’d into retail enables us to serve the large group of shoppers who have never tried a meal kit but are eager for non-subscription solutions. Our goal is to give more shoppers more meals in more places to help them eat better, save time and explore new flavors.”
Will it work?
Meal kits have proven to be a difficult business when it comes to profitability. It’s fairly easy to get customers to sign on — particularly if there is a free trial month involved — but keeping them loyal to the platform has been an issue for many firms. Customers tend to stay on a platform for less than six months before jumping ship to a new meal-in-a-box service or just going back to their old grocery shopping habits. Chef’d isn’t the first meal kit to think about dipping back into the grocery stores, but the company seems to be particularly focused on expanding with numerous partners.
The meal kit firm has something of a reputation for thinking big: Chef’d CEO Kyle Ransford told Karen Webster in a recent conversation that his firm wants to change how customers think about food, not upend their lifestyle entirely.
“It doesn’t mean you’re not going to go cook on your own or go to a farmer’s market,” he told Webster. “This is just a piece of your food lifestyle. You’re still going to dine out; you’re still going to get takeout. Chef’d just becomes the convenient way to get a couple of really nice meals that you know you can make quickly and easily … wherever it fits in your personal kitchen.”