Dive Brief:
- Chef’d, in partnership with Smithfield Foods, has expanded its in-store meal kit offerings to several additional retailers, including Costco, Harris Teeter, Hy-Vee, and Weis Markets, according to a news release. This extends the company's footprint to more than a dozen retailers in 27 states.
- The company’s meal kit varieties include 20 Clove Garlic Chicken with Mashed Purple Potatoes and Spinach; Weeknight Chicken Pad Thai with Carrots and Sugar Snap Peas; and Black Truffle Butter Sirloin Steaks with Roasted Garlic Potatoes and Asparagus. The kits serve two or more and start at $14.99.
- Chef'd features meal kits in stores as well as online, including offerings that incorporate ingredients from leading manufacturers like Quaker Oats. Smithfield Foods invested $25 million in the company last year, while Campbell invested $10 million.
Dive Insight:
By expanding aggressively in brick-and-mortar grocery, Chef’d is adding even more intensity to the increasingly competitive meal kit space.
Bain & Co. estimates meal kit sales are $1.5 billion annually, while Nielsen states that meal-kit spending is growing more than three times as fast as other channels. Subscription meal kits are growing increasingly popular, but many consumers have balked at this model, and retailers have recently stepped in to offer their own take on the trend. According to Nielsen, grocers sold $154.6 million worth of meal kits in stores last year,
Kits offered in store don’t require the week-to-week commitment that online options do, and they tend to be cheaper. There is also added potential for spontaneous in-store purchases, as consumers shop for day-to-day necessities. Some retailers have chosen to partner with well-known brands — Albertsons, most notably, bought Plated last fall — while others, like Kroger and Publix, have elected to develop their own meal kit lines.
Competition is fierce, but where Chef’d may have an advantage is with its full roster of foodservice partners, including The Coca-Cola Company, Beyond Meat, Wolfgang Puck and KC Masterpiece. These strategic partnerships allow the big food companies to expand their footprints in a growing category, while allowing Chef’d to leverage their food innovation expertise. Culinary innovation has become increasingly important in high-margin prepared foods as grocers blur the lines between supermarket and restaurant.
Though internal research by Albertsons reveals that 80% of its customers say they want meal kits in stores, the jury is still out as to whether or not they want a bevy of competing meal kits to choose from. A main driver of the meal-kit trend is convenience and ease, and a crowded shelf with an abundance of choices may run counter to these objectives.
Chef’d will also face an uphill battle as grocers continue to roll out their own branded meal kits. Consumers are increasingly demanding private label selections. According to Nielsen, store brands posted growth of more than three times the rate of branded products at the end of 2017.
Still, this extensive deal will expose Chef’d’s to shoppers across the country. That the company is not bound to just one retailer could be a significant competitive advantage.