The jury is still out on whether meal kit delivery startups are lucrative, but Big Food is already trying to wrestle its way into the market. As the Wall Street Journal reports, major food manufacturers including Tyson, Campbell’s, and Hershey’s are working with online couriers to develop their own mail-order services.
Startup meal kits and e-commerce in general are beginning to gobble up some of big food’s profit margins. “We don’t want meal kits to continue to cut into sales,” Cheryl Bersin, a representative for ConAgra Foods tells the Journal.
Whereas startups like Blue Apron and Purple Carrot often circumvent big distributors and source ingredients directly from farms, these big-brand kits feature the typical ingredients you might find packaged at your grocery store, pre-measured and packaged with recipes. Tyson, for example, began offering kits through Amazon Fresh in September with recipes for tacos, stews, and roasts.
The companies are, of course, banking on convenience being the driving factor behind consumers’ meal kit purchases. But is that the only thing people want from their meal kit experience? Do customers really want something they could easily buy at the grocery store and measure themselves?
A Tyson Tastemakers Irish Stout Beef Stew, for example, retails for $19, which seems a bit hefty for “pre-seasoned” Tyson meat, vegetables, and pre-made sauce with Yukon Gold potatoes and herb butter. Hershey’s dessert kit produced in collaboration with Chef’d was also particularly expensive, priced between $18 and $30 for a mundane collection of pre-measured ingredients like sugar, flour, and vanilla extract with an excessive amount of packaging.
Dominik Richter, CEO of meal kit company Hello Fresh, isn’t afraid of copycat kits from Big Food. “It’s always the best product that wins. We’re not scared of anyone else coming into this market,” he says.
And as brands typically in found grocery stores move into e-commerce, delivery companies like the Mark Bittman-backed Purple Carrot are making a similar leap: The plant-based mail order company announced in October that it would begin offering the kits at Whole Foods stores.
• Big Food Battles Meal-Kit Startups for Dinner-in-a-Box [WSJ]
• Dessert Meal Kits Are Here and They’re Absolutely Terrible [E]
• Meal Kit Services Are Hugely Popular — But Are They Profitable? [E]