For a while, grocers, restaurateurs and investors may have overlooked the meal kit trend. After all, they only account for less than 1 percent of overall food and beverage sales in the U.S., Analysis company Morningstar pointed out. However, it is clear that consumers are changing the way they view purchases of all kinds in today's ever-connected world.
Morningstar went on to point out that, though a fraction of a percent is a miniscule amount, meal kit services attract some of the most influential customers of traditional grocery stores. As the market evolves, key players like Blue Apron and HelloFresh can more closely align with their target demographics' needs and become even more relevant and profitable. Given this very probable reality, now is the time for investors to get involved with this sector, and for retailers to make their move to claim stake in this fast-evolving market.
Beloved grocery stores take a chance
HelloFresh and Blue Apron have the advantages of being industry leaders and innovators. However, grocery stores like Kroger and Publix have a different and valuable edge in this market: an established supply chain, recognizable branding, dedicated consumers, and access to and knowledge of food suppliers.
"Now is the time for retailers to make their move to claim stake in this fast-evolving market."
Given all of these readily available resources, it was only a matter of time before major grocers took the meal kit model and made it their own – and at a more affordable price point. Business Insider reported that Kroger's meal kits, Prep + Pared, comes at only $14 per meal, compared to Blue Apron's boxes priced at $20. Both have the ingredients to create a two-person meal.
Additionally, Kroger seems to have the space, workforce and know-how to give consumers one more advantage: pre-cut veggies, fruits and other ingredients. Because of this time-saving step, Kroger's meals take less time for busy, hungry consumers to go from unboxing to plating.
Publix, a much-loved store in the southeastern U.S., recently rolled out its own version of meal kits from two of its popular locations in Tampa and Orlando, Florida, according to Tampa Bay Business Journal.
"[Publix was] actively watching the [meal-kit] market to understand the ever-evolving needs of our customers," a spokesperson for the grocer told Tampa Bay Business Journal.
The fresh meals at Publix can serve between two and four people, and come in different levels of difficulty: Simple (a six-step meal), Simpler (a four-step meal) and Simplest (you only have to heat it up). Prices range from just around $10 – such as a bratwurst dinner for four – to $38 – such as shrimp tacos for four.
The right packaging can help increase consumer convenience
Kroger and Publix are both currently in the testing phases of their new segment. Kroger, a chain that enjoys a consumer base of 8.5 million shoppers across close to 2,800 locations per day, according to Chief Marketer, only offers Prep + Pared in four Cincinnati locations. Of the 1,100 locations Publix has, only two currently provide the grocer's new meal kit offerings.
Testing out meal kit performance before sizing it up is smart. This time will allow Kroger and Publix to determine the best way to scale up, how consumers react to their offerings and other important information. However, Forbes contributor Bryan Pearson noted that, without the delivery capabilities, these models lack a level of convenience that Blue Apron, HelloFresh and similar models based their business around.
As Kroger, Publix and other grocers make efforts to compete with leading industry players, it's important that they quickly learn how to deliver meal kits at the same quality which they are available in the store. A few important considerations must be made to accomplish this. For example, it would behoove these stores to have a delivery plan or a relationship with local shippers.
Perhaps more important, though, is the right packaging materials that can keep food fresh for the time gap between when the food is delivered to when the consumer brings the box indoors. For example, foil packaging, such as the Penguin Pack from Pregis, offers excellent reflective properties that can control the temperature when shipping sensitive foods like fish or dairy fresh. Plus, the foil is combined with sturdy yet lightweight bubble cushioning, which keeps delicate ingredients like herbs or fruits from bruising or damage during the delivery process. Finally, the materials used to make Penguin Pack are approved by the U.S. Food and Drug Administration for indirect food contact, which makes these options ideal for meal kit deliveries.
As more consumers turn to convenient online channels to make everyday purchases, it's important that retailers push their online offerings. For grocers, this will take some ingenuity and careful planning. However, with the right plan, delicious ingredients and the best packaging, grocers have the capability to disrupt the ever-growing meal kit delivery space. To learn more about how temperature controlled packaging offerings can benefit your business, contact the packaging experts at Pregis.