Brief

Publix and Kroger latest to enter crowded meal kit space

Dive Brief:

  • Publix Super Markets will offer its own meal kits at Florida-based stores in Tampa and Orlando, according to Progressive GrocerPublix spokesman Brian West told the publication "sales are doing very well" in the two-store test, but the company doesn't have any immediate plans to expand the products to other locations.
  • Kroger also is getting into the meal kit game, saying it would offer Prep + Pared meal kits at four of its Cincinnati stores, according to a separate story in Progressive Grocer. The meal kits come with the ingredients necessary to prepare a meal —  Moroccan inspired spring vegetables and creamy chicken with bacon alfredo —for two in about 20 minutes. 
  • Kroger meal kits start around at around $14, while prices at one Publix store in Tampa ranged from $9.99 to $37.99 for meals feeding four people, depending on ingredients.

Dive Insight:

Hello Fresh and Blue Apron have both seen success with their meal kit services but now find increasing competition from grocery retailers who are trying to capitalize on the growing market.

Publix and Kroger both waited a little longer than others to enter into the fray, but it could be a savvy move as it allowed them to gather intel on what was working and not working for others. And by starting slowly with just a few stores, each retailer can collect data on what makes sense for their customers. Both grocers are wise to enter the market for the popular service, or risk losing business to other meal kit operations who are giving consumers the convenience they demand. It won't supplant core grocer operations at Publix or Kroger, even if they do expand the service, but it gives the consumer another choice when they visit. Maybe the shopper can make their own dinner some days using fresh items they picked out or open the meal kits on others when they have less time.

A recent Harris Poll revealed 25% of adults purchased a meal kit in 2016 and 70% of meal kit purchasers have continued to buy them, so it only makes sense that retailers would want to get in on the action.

It’s no secret that today’s consumers are looking for convenience at every turn, and picking up a retailer-branded meal kit at the end of a shopping trip is an easy way for shoppers to quickly get dinner on the table. Not only are meal kits often healthier than take-out options, but both in-store and delivery service kits offer the premium, unusual flavor profiles that consumers demand. One challenge could be the price. Compared to an average home-cooked meal, which comes in at around $4, meal kits tend to be more expensive. Their price tags trend closer to the cost of eating out at a restaurant rather than buying groceries to cook a meal at home.

Grocers can designate a store department for meal kit creation, including consolidating ingredients and preparing kits before putting them on display. Larger retailers may hire companies to assemble the kits for them, but that can increase their bottom line and prices to consumers. Several food companies are entering this space as well, and many manufacturers are starting to partner with grocers on meal kits.

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Filed Under: Manufacturing Grocery Ingredients Corporate Marketing
Top image credit: Flickr user hyku