Supermarket Perimeter - March 2019 - 26

Deli

Meal kits 2.0
BY RYAN ATKINSON

Why the supermarket can succeed
What makes the supermarket perhaps the ideal provider
of meal kits? For starters, their versatility.
"Stores are multi-purpose, they serve as a place to
shop as well as inventory for delivery to consumers,"
Jones says. "The progress that grocery has made now in
a very short period of time will activate their stores in a
new way of shopping and delivery for consumers."
David Kamen, assistant director of consulting for the
Culinary Institute of America, based in Hyde Park, New
York, says retailers already have the shopper's attention
and they provide a much more reasonable delivery option than the meal kit companies generally offer.
"I think it was a great introductory business model
to say 'Hey you can do this and we can provide it,'" he
says. "There are some challenges in ordering online, in
advance, and having things shipped to you via UPS and
dealing with all kinds of Styrofoam packaging. And what
happens if you're not there on a summer day and the
package has to sit out all day in the heat?"

Just 5% of
shoppers
ordered or
subscribed
to a meal
kit delivery
service
(FMI)

While consumers have
cooled on subscriptionbased meal kit services,
there is still a growing
need for meal kits
at the retail level.

26 - MARCH 2019

www.supermarketperimeter.com

What challenges retailers face
While supermarkets may be the perfect medium for today's meal kits, it's not something most chains can jump
into quickly and easily, especially if they try to take on
production themselves.
For one, producing meal kits requires a lot of labor
and a lot of space, especially when it comes to smaller,
regional chains.
"They don't really have the infrastructure," Kamen
says. "Just foodservice at retail in general is a lot of work.
They're expanding the deli counters, but they don't
really have the infrastructure to offer the wide range of
prepared foods that some of the other more upscales
markets do. With the exception of some of the larger,
slightly more upscale retailers, the challenge has really
been just availability and variety."
But even when retailers do find an option that works
with them - either in producing their own or partnering
with a supplier - another giant hurdle presents itself -
one that has proven difficult to clear.
"Retailers were all experiencing good sales but due
to short shelf life were experiencing 30%-plus in spoils,"
Jones says. "This amount of spoils could not be priced
into the product as it would make the price of meal kits
in retail not affordable or commercially viable."

TRUE FOOD INNOVATIONS

THE DAY OF THE MEAL KIT IS NOT GONE, and it likely won't be for a long
time. It just looks a bit different now.
Direct-to-consumer meal kits are being answered, in varying forms of
success, by retailers offering their own take on the product.
"Meal Kits 1.0 were a pioneering product that has already evolved," says
Robert Jones, president of Newport Beach, California-based True Food
Innovations. "Grocery stores are finally addressing eCommerce and last
mile delivery options, and there is no closer more efficient last mile option
than the grocery store down the street."

Supermarket Perimeter - March 2019

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