There has been a lot of discussion recently about the meal kit business and what it could mean for the traditional grocery sector. From a competitive standpoint, meal kit providers package up all the ingredients for a home prepared meal and deliver them to your door at relatively low cost, presenting an opportunity for non-traditional players to get into the market of providing meals, just as grocers do, but with a lot more convenience.
In the U.S., Blue Apron has become one of the leaders but both Walmart and Kroger have been experimenting with the model. An online meal planning company, eMeals recently introduced the first meal kit service integrated with Walmart Grocery and Kroger ClickList, enabling one-click ordering for curbside pickup at the date and time of the user’s choice. eMeals also offers a delivery option through a separate partnership with Instacart. Many believe that Amazon’s next move could also be with meal kits.
In Canada, Chefs Plate, delivers pre-portioned, locally-sourced farm fresh ingredients and easy-to-follow recipes in refrigerated kits right to its customers’ homes at $10.95 per plate or less. The company was founded in 2014 and has grown to 125 employees. The company claims, “to deliver nationally on freshness three times faster than the grocery aisle” through its supply chain of Canadian growers, farmers and producers that allows for food to go to customers’ kitchens within three days. The company is already delivering over 100,000 meal-kits monthly and has extended of delivery outside of Ontario to B.C., Alberta and Manitoba. Clearly, Metro is considering its options in this area with its recent purchase of food delivery service MissFresh.
Grocers indeed are well positioned to dominate in this burgeoning new industry by leveraging their existing business. After all, they have been in the business of home meal replacement for years now, have the supply chain in place and the necessary infrastructure, including prep areas and trained labour. Meal kits could even incorporate branded products, providing an opportunity for suppliers to enhance their brand equity in the business.
The only major challenge will be the delivery component. For retailers who can solve that problem, a new profit centre will open and they will be able to distinguish themselves from their competitors.