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  • Writer's pictureGina Peck

Brick and Mortar Meal Kits

Hello Fresh in-store at Ahold

Kroger’s acquisition of Home Chef has me thinking about the ever-evolving trend of fresh meal kits for at-home preparation. Long before I heard about Blue Apron, meal kits were a trend I followed. So this morning's update by Progressive Grocer on the Home Chef purchase has it on my mind again.

Kroger is just one of a really long line of retailers to recently amp up their meal kit program. Today the question is no longer what is the longevity of this trend. The question is who will be the leaders and losers?

The first time I became aware of this meal kit idea was during a market visit to Publix stores in Georgia. It was a weird trip, right after I became a Brand Manager, where I flew on a corporate jet (very cool) with a bunch of executives and kind of followed them around asking questions and taking a lot of pictures. I was on the trip to check out rotisserie chicken but ended up excited about these new meal kits that were front and center when I walked into each store.

The Publix program was simple. In-store chefs demonstrated the meal of the week and I remember thinking, “Wow, this is brilliant” and "I'd buy that". Today, Publix still has a great program with multi-tiered products centered on convenience, ease of preparation and restaurant quality in their Aprons product selection. I doubt Publix was the first to introduce a meal kit, but they were a major retailer that introduced these kits well before the key on-line delivery companies; Hello Fresh (est. 2011) and Blue Apron (est. 2012). Photo source:

In July of 2017, Field Agent released a study, Food for Thought: Americans Share Attitudes Toward Meal Kits. As I read through this document last summer, it was pretty clear that changes needed to happen for meal kits to remain a strong growth sector in the food industry. Evolving to include a manufacturer or retailer could give these companies an edge on cost while expanding to a mainstream audience.

Field Agent reported that consumers of on-line meal kits were looking for variety and convenience. However, 71% said the key drawback of on-line meal kits was expense. This makes sense to me. With a $12 serving/$24 meal price tag, for two people, and I have to cook it myself. No thanks. Lucky for Blue Apron, I'm not their target market. However, 76% of the study respondents were interested in purchasing a meal kit from a retail store. If variety and convenience are the drivers of meal kit purchases and cost is the key inhibitor, what better way to expand than by putting kits into grocery stores? Click to read the Field Agent Study.

Fast forward to 2018. We began to see the explosion of meal kit brands onto the shelves at local stores. Nielsen reports that the meal kit category is $154.6M in retail grocery stores and grew 26% in 2017.

In-store meal kits began with retailers testing their own versions of programs. Key brands of on-line programs are just now beginning to enter physical store locations. Albertson's led that initiative with the purchase of Plated in late 2017. Since that time, they have rolled out products to a limited number of Safeway and Jewel stores and other retailers are following their lead with similar programs.

In the first six months of 2018, the meal kit trend has exploded again:

· Albertsons expanded Plated meal kits and launched items in their Instacart Delivery program as part of same day delivery service. Meal kit prices range from $15 - $19 for a two-person serving. (Source:

· Walmart has expanded Marketside meal kits to more than 2,000 stores nationally. These kits are portioned in-store and require no chopping and minimal prep. Walmart meal kits are available to order on-line for curbside pickup as well as available in-store. (I found these in the meat department priced at $12.97.)

· Walmart Rotisserie Hero kits pair with deli rotisserie chicken and are available in three flavors. At $8.00 plus the price of a rotisserie chicken, these are in-line with price of the Marketside meal kits above

· Publix continues to expand Meal Kits by Aprons which consists of three-tiers of easy prep; Simple prep (six steps), Simpler prep (four steps) and Simplest Prep

· Blue Apron, the brand leading in share of on-line meal kit sales, announced that it would begin looking at selling products in brick and mortar stores as reported by Wall Street Journal in March of this year. Blue Apron has physical placement in 17 CostCo stores for two wholesale products and are expected to continue expansion with the right retail partner. The Blue Apron decision was driven by slumping sales and declines of nearly 25% vs. prior year.

· Hello Fresh, the #2 brand of on-line meal kits, launched at Ahold stores

Ahold now has Hello Fresh in store sets

· Bashas and Costco carry the True Chef brand

Retailers are making big financial moves in this category. A new story about meal kits is in major publications each week, if not daily. Every syndicated data service is following the trend. But what I am not seeing is the answer to the question, what type of program will work long-term?

I want to know:

Which brands have longevity? Are in-store shoppers the same target market as on-line? Do you take meal kits mainstream? Or do you focus on Foodies? What is the ideal product type? Do you pair with fully cooked items from the deli and focus on quick and easy meals? What is the ideal price point for in-store kits? Will retailers be able to manage in stocks with existing labor? Where do you merchandise and how?

I'm sure there are lots of category managers, product development, marketing teams and merchandising experts with many of these same questions. Or maybe they already know the answers. I know where I would start, with about a thousand Spectra reports and then a lot of market research.

As this trend evolves, it will be interesting to see where it goes. If my opinion matters, my vote is to go mainstream and to build convenient meals for your core demographic on a case-by-case basis. I'm not sure these items belong in the deli. I like where Walmart is headed. But I like the Publix program too. I'm not sure the answer is consistency across retailers. What I am sure of, the answers are somewhere in the numbers.



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