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Why Meal Kits Are Going Offline

Companies like Blue Apron and Plated are invading grocery stores in search of new customers

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Meal kits are the paint-by-numbers of the cooking world. For anyone who’s been too busy cooking from scratch to notice the meal-kit phenomenon, they’re typically mailed once a week to subscribers via boxes containing pre-portioned (and sometimes pre-cut) ingredients, basic instructions on how to turn them into different meals, and huge chunks of ice to keep it all cold. After they’re done, subscribers can simply recycle the box, or nail it to the wall to show off their cooking conquests.

As of 2017, Blue Apron dominated the $4.65 billion meal-kit market, with over 40 percent of the market share (if one were to picture the space as an actual meal kit, Blue Apron would be the biggest container in the box, with all the other players in little Ziploc bags — at least in terms of brand familiarity).

And there are plenty of competitors, including Sun Basket (Blue Apron but with all organic ingredients), Purple Carrot (Blue Apron but plant-based and endorsed by five-time Super Bowl champion Tom Brady), and Plated (Blue Apron but with additional meal-plan options, not to mention labels that tell you which ingredients go with which meal — an occasional complaint from Blue Apron customers unable to find specific ingredients in a box). For anyone who prefers meal-kit companies endorsed by sports dynasties, but are more of a Warriors fan, there’s Homemade, designed by empire builder Ayesha Curry. More recently, online retail giant Amazon experimented with its own delivery meal kit, just one month after acquiring Whole Foods last year.

Yet with an IPO that fell short of expectations, Blue Apron needed to think outside its very cold meal-kit boxes. So last month, Blue Apron began hawking its meal kits somewhere unexpected: in retail stores. They’re now sold in more than 60 Costco locations, with recipes rotating monthly. Blue Apron’s Costco kits are offered at a 30 percent discount from what subscribers pay ($24.99 or about $6.25 per serving, versus the usual $8.75). The initial month featured One-Pan Beef Stir-Fry and Southwestern Chicken Tacos, each in four-person servings, though one can assume plenty of lonely singles will buy them, too.

Blue Apron is not the only brand looking to retail stores — in fact, they’re a bit late to the game. Last summer, grocery chain Albertsons acquired Plated (which holds just under 6 percent of the meal-kit market) for $300 million; some Plated kits are already available in Safeway and Albertsons stores, with a full rollout planned for later this year. In March, Walmart announced it would roll out its in-store meal kits nationwide. And last week alone, HelloFresh announced a partnership with Giant Food and Stop & Shop stores, bringing its kits to grocery stores; meanwhile, Kroger announced its intention to buy Home Chef. It’s seemingly only a matter of time before you’ll be able to order a meal-kit combo at McDonald’s, not that that would make any sense.

But why hit grocery stores? Before announcing its Home Chef acquisition earlier this week, Kroger already had an in-house meal kit, called Prep+Pared, which it started expanding in December 2017. “It’s dinner in 20 minutes because all the chopping, dicing, and measuring is done for you,” says Russ Richardson, Kroger’s vice president of deli and bakery, of Prep+Pared’s presence in the grocery stores. “Yet you still receive the fun experience of cooking.” (The brand plans to continue selling both lines of meal kits: In a press release, Kroger wrote that Home Chef’s kits “complement” those of Kroger’s Prep+Pared.)

Blue Apron also calls its grocery kits an accompaniment to its original product. “Our view is that our in-store meal kits will complement and introduce our brand to our direct-to-consumer products,” says Nisha Devarajan, senior director of communications at Blue Apron. “That being said, there are a number of consumers who want quick, on-the-go access to meal solutions.”

At Kroger and other groceries, meal kits are often stocked front and center in the deli section, hoping to attract a customer who doesn’t want to make dinner from scratch, but who still wants to feel involved in the process. “We really think that the customer looking for a meal solution of this nature is looking for it in the deli,” Richardson says. “Because that’s where they’re looking for total solution ideas.”

While meal-kit packaging somewhat resembles another “total solution” option — the classic TV dinner — meal kits also have a bit of a high-gloss, “foodie” sheen to them. Marketing copy from meal-kit companies falls back on common buzzwords that would stiffen the ridges of any wannabe chef’s hat: Recipes are “thoughtfully crafted” with “seasonal ingredients” from “partnerships with farmers,” and so on. The idea, it seems, is to reach those inside the grocery store who are seeking something quick, but who might also turn up their semi-homemade nose at the nearby hot bar (itself a growing market).

Here, these kits are attempting to branch out: Many of these brands, whether explicitly or not, initially marketed themselves as tech companies, designed for the busy professional who wanted to feel like a cook without all that pesky grocery shopping. A 2017 survey conducted by Morning Consult for Money revealed the audience naturally attracted to that “tech-company” luster: Not surprisingly, 29 percent of millennials and 26 percent of Gen-Xers reported trying a meal kit; one in four of those who tried a meal kit identified as “urban dwellers.”

But meal-kit companies need more than an online presence to survive. According to data collected in 2017, Blue Apron held onto just 15 percent of its customers within a year of their first purchase. Its next-largest competitor, HelloFresh, maintained 11 percent of those customers, while more-niche rivals Gobble and Sun Basket boasted retention percentages in the 20s. The somewhat fickle nature and attention span that might push someone to meal kits in the first place also tends to accompany a lack of commitment. They sometimes even go back to — get this — buying regular groceries.

In placing its kits in Albertsons stores, Plated sees possibility in reaching additional demographics. “The first customer we’re thinking about is one who’s been thinking about trying Plated for awhile,” says co-founder and CEO Josh Hix. “The next customer is one who already uses our subscription, but wants to add an extra night or two at the last minute... And last but not least is the customer who hasn’t yet heard of Plated, or meal kits at all.” Hix points to research indicating that only 20 percent of consumers have tried meal kits. Devarajan of Blue Apron, in shifting some of its focus to retail, similarly notes that “we are focused on meeting customers on their terms.”

In other words, meal-kit companies are betting on the notion that getting their products into grocery stores will help them reach a new demographic: one that’s willing to bypass everything else, toss a meal kit in their basket, and spend 20 minutes at home learning a little about cooking. But not too much, of course.

Chason Gordon is a writer whose work has appeared in Vice, the Globe and Mail, and Paste Magazine, among others. He currently lives in Seattle, but is on a month-to-month lease.
Editor: Erin DeJesus

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