Dive Brief:
- American Foods Group, in collaboration with the beef checkoff program and its "Beef. It’s What’s For Dinner" campaign, is offering fresh beef meal kits in retail grocery stores across the country, according to a news release. The so-called Steak Bowl meal kits rolled out in select stores in February and have expanded to more than 1,500 stores.
- The kits provide a complete beef meal featuring flavors such as Korean-style bulgogi beef, steak burrito, steak and tzatziki, steak and mash. Shoppers are encouraged to customize the bowls by adding their own vegetables.
- The bowls are priced between $12.48 and $17.99, feed four to six people and can be ready within 30 minutes using just one pan.
Dive Insight:
According to Nielsen, nearly one in 10 U.S. consumers have tried a meal kit, and one-fourth of the U.S. population would consider trying one. Clearly, Americans want to eat home-cooked meals but also want the convenience that comes with meals that are already partially prepared. Nielsen notes that in-store meal kits generated $154.6 million in 2017 year-over-year sales, with growth of more than 26% year-over-year.
Still, traditional grocery stores, like those selling the new American Foods beef products, have reason for concern considering out of the 9% of people who tried meal kits, 6% purchased them exclusively online.
At the same time, there are indications consumers are turning to grocery store meal kits as selections improve. They tend to be cheaper, require less packaging, and don’t require a subscription. Internal research by Albertsons shows that 80% of its customers say they want meal kits in stores. Albertsons bought meal kit pioneer Plated last fall and is currently rolling the line out to stores nationwide.
As competition picks up, meal kit producers, such as American Foods Group, are establishing points of differentiation in order to stand out. Some have forged celebrity endorsements, while others have introduced reusable packaging. Others stand out with their food offerings: Peachdish serves up Southern cuisine; Green Chef (which was recently acquired by HelloFresh) specializes in seasonal, organic-only ingredients; and Diet To Go targets consumers interested in losing weight. Some kit companies have whittled down prep time to as little as 15 minutes.
Creating another niche, the American Foods partnership could be launching at a perfect time, as the U.S. appetite for beef continues to grow. Although consumers are more willing than ever to try meat and burger alternatives, their appetite for red meat continues to grow. The USDA expects annual red-meat consumption in the U.S. to reach 110.9 pounds per person this year, up from 108.2 pounds in 2017. Meat production on U.S. farms has grown by nearly 66% in the past three decades, keeping prices low for hungry consumers.
There seems to be a lot going for the new, beef-centric meal kits, including the American public’s love for convenience in cooking, growth in grocery store meal kits and the popularity of beef. Still, the beef bowls are coming at a time when fickle consumers may feel overwhelmed by choice, and the kits could get lost in the crowd.