Bloomberg has a story about the tough road that meal kit companies continue to face, even as many of them have migrated from an exclusively subscription-based model to one that also includes a presence in bricks-and-mortar stores.
The story suggests that while meal kits are getting some trial in stores, they may not be getting repeat usage enough to gain any sort of real market traction. There remain a number of hindrances for shoppers - concerns about costs, excess packaging, and products that may not be particularly appealing to them.
“Companies are already second-guessing the brick-and-mortar model,” Bloomberg writes. “Costco dropped Blue Apron to make space for seasonal products, and Albertsons, which only started selling Plated meals at Safeway and Shaw’s last year, earlier this month scaled back the rollout and fired 10 percent of its New York staff.
“For meal-kit companies looking for a killer app, the answer may lie in picking niches rather than trying to be all things to all people. Sun Basket Inc., which is preparing for an IPO and recently sold a stake to Unilever, is targeting consumers looking for gluten-free, paleo-diet and vegetarian meals. It still operates as an online subscription. Marley Spoon, which has teamed up with Martha Stewart in the U.S., sells more affordable meal kits aimed at families who already cook rather than trying to persuade newbies to pick up a chef knife and spatula. The Berlin-based company recently rolled out a sub-brand called Dinnerly that sells for $4.99 per serving (plus $8.99 in shipping).”
The story suggests that while meal kits are getting some trial in stores, they may not be getting repeat usage enough to gain any sort of real market traction. There remain a number of hindrances for shoppers - concerns about costs, excess packaging, and products that may not be particularly appealing to them.
“Companies are already second-guessing the brick-and-mortar model,” Bloomberg writes. “Costco dropped Blue Apron to make space for seasonal products, and Albertsons, which only started selling Plated meals at Safeway and Shaw’s last year, earlier this month scaled back the rollout and fired 10 percent of its New York staff.
“For meal-kit companies looking for a killer app, the answer may lie in picking niches rather than trying to be all things to all people. Sun Basket Inc., which is preparing for an IPO and recently sold a stake to Unilever, is targeting consumers looking for gluten-free, paleo-diet and vegetarian meals. It still operates as an online subscription. Marley Spoon, which has teamed up with Martha Stewart in the U.S., sells more affordable meal kits aimed at families who already cook rather than trying to persuade newbies to pick up a chef knife and spatula. The Berlin-based company recently rolled out a sub-brand called Dinnerly that sells for $4.99 per serving (plus $8.99 in shipping).”
- KC's View:
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I think there is an underlying premise in the meal kit business that appeals to shoppers, and while the national subscription model in this case may not be the killer app that some expected it to be, there are other ways to slice and dice the concept that will make sense to consumers and build business for retailers.
